Question

Sharmila, Urmila and Leela are partners in the firm ‘Jeevan Stores’ sharing profits and losses in the ratio of 2 : 2 : 1 respectively. On 31st March 2020, they decided to dissolve the firm when their Balance Sheet was as under.

Balance Sheets as on 31st March 2020
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Account:		Goodwill	45,600
Sharmila	2,27,160	Machinery	73,000
Urmila	1,44,000	Motor Car	1,67,600
Leela	1,08,000	Building	1,02,000
Creditors	28,800	Investment	62,400
Bills Payable	21,600	Debtors	30,600
		Stock	45,000
		Bank	3,360
	5,29,560		5,29,560

The firm was dissolved on the above date and the assets were realised as under:

1. Sharmila agreed to take over the building at ₹ 1,23,600.
2. Urmila took over goodwill, stock, and debtors at book values and agreed to pay creditors and bills payable.
3. Motor car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively.
4. Investments were taken by Leela at an agreed value of ₹ 55,440.
5. Realisation expenses amounted to ₹ 6,800.

Prepare:

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

Answer 1

In the books of Sharmila, Urmila and Leela
Dr.	Realisation Account						Cr.
Particulars		Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c			5,26,200	By Sundry Liabilities A/c		50,400
Building A/c		1,02,000		Creditors	28,800
Machinery A/c		73,000		Bills Payable	21,600
Motor car A/c		1,67,600		By Sharmila’s Capital A/c (Buliding taken over)		1,23,600
Goodwill A/c		45,600		By Urmila’s Capital A/c		1,21,200
Investments A/c		62,400		Goodwill	45,600
Debtors A/c		30,600		Stock	45,000
Stock A/c		45,000		Debtors	30,600
To Urmila’s Capital A/c			50,400	By Bank A/c		1,82,760
Creditors		28,800		Motor car	1,51,080
Bills Payable		21,600		Machinery	31,680
To Bank A/c (Being realisation expenses paid)			6,800	By Leela’s Capital A/c (Investment taken over)		55,440
				By Loss on Realisation transferred to Partner’s Capital A/c		50,000
				Urmila	20,000
				Sharmila	20,000
				Leela	10,000
			5,83,400			5,83,400

 

Dr.	Partner's Capital Accounts						Cr.
Particulars	Sharmila (₹)	Urmila (₹)	Leela (₹)	Particulars	Sharmila (₹)	Urmila (₹)	Leela (₹)
To Realisation A/c (Building)	1,23,600	-	-	By Balance b/d	2,27,160	1,44,000	1,08,000
To Realisation A/c	-	1,21,200	-	By Realisation A/c	-	50,400	-
To Realisation A/c	-	-	55,440
To Realisation A/c (Loss)	20,000	20,000	10,000
To Bank A/c	83,560	53,200	42,560
	2,27,160	1,94,400	1,08,000		2,27,160	1,94,400	1,08,000

 

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	3,360	By Realisation Expense A/c	6,800
To Realisation A/c	1,82,760	By Sharmila's Capital A/c	83,560
		By Urmila's Capital A/c	53,200
		By Leela's Capital A/c	42,560
	1,86,120		1,86,120