comparison between partnership and company
TRANSCRIPT
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8/12/2019 Comparison Between Partnership and Company
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Dissolution of firm Amalgamation of firm Conversion of firm Absorption ofcompanies
Amalgamation ofcompanies
1. Realization Accounta. Closing asset a/c (6points) b. Closing liabilities a/c (3
points)c. Realization on asset a/c (2
points)d. Payment of liabilities a/c
(2 points)e. Payment of realization
expenses a/c (4 points)f. Closing of realization a/c
(2)2. Capital account ( balance
of P & L a/c, reserve &fund, profit & loss onrealization )
3. Distribution of balancecapital
Solvent Solvent and insolvent Insolvent (three
methods)4. Cash a/c: distribution
of cash
Other points Goodwill account Profit or loss on
sale of assets Profit or loss in
payment ofliabilities
Distribution of
A. In the books ofamalgamating firms1. Revaluation
account2. Closure of the old
accounts book3. Transfer of the
accumulated reserves,profits and losses
4. Unrecorded assets5. Unrecorded liabilities6. Close the accounts of
assets & liabilitiestaken over by the newfirm
7. Close the accounts ofpartners capitalaccount and new firmsaccount
B. In the books of new firma. For closing the
accounts of assets andliabilities taken away by the new firm
A. In the books of firm1. Realization Account
a. Closing asset account (3) b. Closing liabilities a/cc. Purchase price due to
vendord. Realization of asset a/c (2
points)e. Unrecorded assets a/c (2)f. Payment of liabilities a/c
(2)g. Unrecorded liabilities (2)h. Payment of realization
expenses (firm)i. Closing of realization a/c
(2)2. Capital account ( balance
of P & L a/c, reserve & fund,profit & loss on realization )
3. Payment of thepurchase price
4. Distribution of sharesand debentures
5. Balance of cash a/c
B. In the book of purchasing company
1. Taking over the assets andliabilities by thepurchasing company
2. Payment of the purchaseprice
A. In the books of firm
1. Realization a/ca. Closing asset a/c
(4) b. Closing liabilities
a/cc. Purchase price
due to vendord. Asset not taken
over (3)e. Liabilities not
taken over (3)f. Redemption of
debentures &preferenceshares (4)
g. Payment of windup expenses (5)
h. Provision of badand doubtfuldebts
i. Closing ofrealizationaccounts (2)
2. Shareholderaccount
3. Payment ofpurchase price
4. Distribution ofshares of thepurchasingcompany
5. Transfer of
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8/12/2019 Comparison Between Partnership and Company
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assets realizedgradually
Proportionate capitalmethod
Maximumloss method
capital6. Balance of cash
a/c
B. In the books of purchasingcompany
a. For purchasing the business
b. Giving away theassets andliabilities by the vendor company(3)
c. Payment of thepurchase price to vendor company
d. Payment of windup expenses by thepurchasingcompany
e. Adjustment ofgoodwill tosecurity premiuma/c