Question

Amul and Anand are partners in the firm sharing profits and losses in the ratio of 4 : 1. They decided to dissolve the partnership on 31st March, 2023 on which date their Balance Sheet stood as follows:

Balance Sheet as on 31st March, 2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital:			Furniture		19,600
Amul	1,26,000	1,82,000	Plant		91,000
Anand	56,000		Trademark		11,200
Sundry Creditors		49,000	Sundry Debtors	67,200
Bank Loan		21 ,000	Less: R.D.D.	4,200	63,000
			Stock		42,000
			Cash in Hand		14,000
			Advertisement Suspense		11,200
		2,52,000			2,52,000

Additional Information:

(1) Plant and Stock taken over by Amul at ₹ 1,09,200 and ₹ 30,800 respectively.

(2) Debtors realised 90% of the book value and Trademark at ₹ 7,000 and Goodwill was realised for ₹ 37,800.

(3) Unrecorded assets estimated ₹ 6,300 was sold for ₹ 2,100.

( 4) ₹ 1,400 Discount were allowed by creditors while paying their claim.

(5) The Realisation expenses amounted to ₹ 4,900.

You are required to prepare Realisation A/c, Cash A/c and Partner's Capital A/cs.

Answer 1

Dr.	In the books of Amul and Anand Realisation Account						Cr.
Particulars		Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c				By Sundry Liabilities A/c
Furniture		19,600	2,31,000	Bank Loan	21,000	70,000
Plant		91,000		Sundry Creditors	49,000
Trademark		11,200		By R.D.D. A/c (Transfer)		4,200
Sundry Debtors		67,200		By Amul’s Capital A/c
Stock		42,000		Plant	1,09,200	1,40,000
To Cash A/c				Stock	30,800
Bank Loan		21,000	73,500	By Cash A/c
Sundry Creditors		47,600		Debtors	60,480	1,07,380
Realisation Expenses		4,900		Trademark	7,000
To Partner'Amuls Capital A/cs (Profit)				Goodwill	37,800
Amul		13,664	17,080	Unrecorded Assets	2,100
Anand		3,416
			3,21,580			3,21,580

 

Dr.	Partner's Capital Accounts						Cr.
Particulars		Amul (₹)	Anand (₹)	Particulars	Amul (₹)	Anand (₹)
To Advertisement Suspense A/c (Deferred Expense/Loss)		8,960	2,240	By Balance b/d	1,26,000	56,000
To Realisation A/c (Assets taken over)		1,40,000	-	By Realisation A/c (Profit)	13,664	3,416
To Cash A/c (Final payment)		-	57,176	By Cash A/c (Amount contributed)	9,296	-
		1,48,960	59,416		1,48,960	59,416

 

Dr.	Cash Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	14,000	By Realisation A/c	73,500
To Realisation A/c	1,07,380	By Anand’s Capital A/c	57,176
To Amul’s Capital A/c	9,296
	1,30,676		1,30,676

Working Notes:

(1) Bank Loan is an external liability of the firm and therefore it is transferred to Realisation A/c.

(2) Amount recovered from Debtors = 90 % of Gross Debtors = `90/100 xx 67.200` = ₹ 60.480

(3) Amount paid to Creditors = Value of Creditors – Discount given = 49,000 – 1,400 = ₹ 47,600.

(4) Sale of unrecorded assets for ₹ 2,100 is recorded on the credit side of Realisation A/c and debit side of Cash A/c.

(5) It is presumed that Furniture realised nothing.