Question

Hema, Manisha and Limsy were in partnership firm sharing profits and losses in the ratio of 5:3:2. They decided to dissolve their partnership firm on 31^st March 2019 and their Balance sheet as on that date stood as:

Balance sheet as on 31st March,2019
Liabilities	Amount ₹	Assets	Amount ₹
Capital Account:		Machinery	1,00,000
Hema	1,50,000	Debtors	50,000
Manisha	80,000	Stock	70,000
Reserve Fund	10,000	Cash at Bank	30,000
Sundry Creditors	20,000	Limsy Capital A/c	20,000
Bills payable	10,000
	2,70,000		2,70,000

The firm was dissolved on 31^st March, 2019 and assets were realised as under:

1. Machinery realised 60% of its book value.
2. Out of debtors, Mr. Jagdish, our customer for ₹ 20,000 was declared insolvent and nothing could be recovered from him. Other debtors are good and recovered and realised.
3. Hema took stock at an agreed value of ₹ 50,000.
4. Creditors and Bills payable were paid at 10% discount.
5. Limsy became insolvent and nothing was recovered from her estate.

Prepare:

1. Realisation Account
2. Partners’ Capital Account
3. Bank Account

Answer 1

Dr.	In the books of Hema, Manisha & Limsy Realisation A/c				Cr.
Particulars		Amount ₹	Particulars		Amount ₹
To Sundry Assets			By Sundry Liabilities
Machinery	1,00,000	2,20,000	Sundry Creditors	20,000	30,000
Debtors	50,000		Bills Payable	10,000
Stock	70,000		By Bank A/c
To Bank A/c			Machinery A/c	60,000	90,000
Sundry Creditors	18,000	27,000	Debtors	30,000
Bills Payable	9,000		By Hema's Capital A/c (stock taken over)		50,000
			Hema	38,500	77,000
			Manisha	23,100
			Limsy	15,400
		2,47,000			2,47,000

 

Dr.	Partner's Capital A/c						Cr.
Particulars	Hema	Manisha	Limsy	Particulars	Hema	Manisha	Limsy
To Balance b/d	-	-	20,000	By Balance b/d	1,50,000	80,000	-
To Realisation A/c	50,000	-	-	By Reserve fund (5 : 3 :2 )	5,000	3,000	2,000
To Realisation A/c (Loss)	38,500	23,100	15,400	By Hema's Capital A/c	-	-	20,875
To Limsy's Capital A/c	20,875	12,525	-	By Manisha's Capital A/c	-	-	12,525
To Bank A/c	45,625	47,375	-
	1,55,000	83,000	35,400		1,55,000	83,000	35,400

 

Dr.	Bank A/c		Cr.
Particulars	Amount ₹	Particulars	Amount ₹
To Balance b/d	30,000	By Realisation A/c	27,000
To Realisation A/c	90,000	By Hema's Capital A/c	45,625
		By Manisha's Capital A/c	47,375
	1,20,000		1,20,000

Working Note :

1. Hema's Capital A/c (stock taken over) - 

Hema = `77,000xx 5/10`= 38,500

Manisha = `77,000 xx 3/10 = 23,100`

Limsy = `77,000xx 2/10 = 15,400`

2. Limsy capital a/c

Hema = `33,400 xx5/8 = 20,875`

Manisha = `33,400xx3/8 = 12,525`