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Question
A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. They decided to dissolve their firm on 31st March, 2019 when the Balance Sheet was:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
40,000 |
Cash |
40,000 |
||
| Bills Payable |
46,000 |
Debtors |
70,000 |
||
| Employees’ Provident Fund |
32,000 |
Less: Provision for Doubtful Debts |
6,000 |
64,000 |
|
| Mrs. A’s Loan |
38,000 |
Stock |
50,000 |
||
| C’s Loan |
30,000 |
Investments |
60,000 |
||
| Investments Fluctuation Reserve |
16,000 |
Furniture |
42,000 |
||
| Capitals A/cs: | Machinery |
1,36,000 |
|||
| A |
1,20,000 |
Land |
1,00,000 |
||
| B |
1,00,000 |
Goodwill |
30,000 |
||
| C |
1,00,000 |
3,20,000 |
|||
|
5,22,000 |
5,22,000 |
||||
Following transactions took place:
(a) A took over Stock at ₹ 36,000. He also took over his wife's loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value. Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.
Solution
Realisation Account
|
Dr. |
Cr. |
|||
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
Debtors |
70,000 |
Provision for Doubtful Debts |
6,000 |
|
|
Stock |
50,000 |
Creditors |
40,000 |
|
|
Investments |
60,000 |
Bills Payable |
46,000 |
|
|
Furniture |
42,000 |
Employee’s Provident Fund |
32,000 |
|
|
Machinery |
1,36,000 |
Investment Fluctuation Fund |
16,000 |
|
|
Land |
1,00,000 |
Mrs. A’s Loan |
38,000 |
|
|
Goodwill |
30,000 |
A’s Capital A/c (Stock) |
36,000 |
|
|
A’s Capital A/c (Mrs.A’s Loan) |
38,000 |
B’s Capital A/c (Debtors) |
28,000 |
|
|
C’s Capital A/c (Creditors) |
20,000 |
C’s Capital A/c (Investments) |
54,000 |
|
|
Cash A/c (Expenses) |
4,000 |
Cash A/c (Debtors) 60% × 35,000 |
21,000 |
|
|
Cash A/c (Creditors) |
20,000 |
Cash A/c (Furniture) |
30,000 |
|
|
Cash A/c (Bills Payable) |
46,000 |
Cash A/c (Machinery) |
82,000 |
|
|
Cash A/c (Employees’ Provident Fund) |
32,000 |
Cash A/c (Land) |
1,20,000 |
|
|
|
|
Cash A/c (Unrecorded Assets) |
22,000 |
|
|
|
|
Loss on Revaluation transferred to: |
|
|
|
|
|
A |
30,800 |
|
|
|
|
B |
30,800 |
|
|
|
|
C |
15,400 |
77,000 |
|
|
6,48,000 |
|
6,48,000 |
|
Partners’ Capital Account
|
Dr. |
Cr. |
||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
Realisation A/c (Stock) |
36,000 |
- |
- |
Balance b/d |
1,20,000 |
1,00,000 |
1,00,000 |
|
Realisation A/c (Debtors) |
- |
28,000 |
- |
Realisation A/c (Mrs.A’s Loan) |
38,000 |
- |
- |
|
Realisation A/c (Investments) |
- |
- |
54,000 |
Realisation A/c (Creditors) |
- |
- |
20,000 |
|
Realisation A/c (Loss) |
30,800 |
30,800 |
15,400 |
|
|
|
|
|
Cash A/c |
91,200 |
41,200 |
50,600 |
|
|
|
|
|
|
1,58,000 |
1,00,000 |
1,20,000 |
|
1,58,000 |
1,00,000 |
1,20,000 |
C’s Loan A/c
|
Dr. |
Cr. |
||
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Cash A/c |
30,000 |
Balance b/d |
30,000 |
|
|
30,000 |
|
30,000 |
Cash A/c
|
Dr. |
Cr. |
||
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
Balance b/d |
40,000 |
Realisation A/c (Creditors) |
20,000 |
|
Realisation A/c (Debtors) |
21,000 |
Realisation A/c (Expenses) |
4,000 |
|
Realisation A/c (Furniture) |
30,000 |
Realisation A/c (Bills Payable) |
46,000 |
|
Realisation A/c (Machinery) |
82,000 |
Realisation A/c (Employees’ |
32,000 |
|
Realisation A/c (Land) |
1,20,000 |
C’s Loan A/c |
30,000 |
|
Realisation A/c |
22,000 |
A’s Capital A/c |
91,200 |
|
|
|
B’s Capital A/c |
41,200 |
|
|
|
C’s Capital A/c |
50,600 |
|
|
3,15,000 |
|
3,15,000 |
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Amount |
Assets | Amount (Rs.) |
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Balance Sheet of Ashu and Harish as on December 31, 2017
| Liabilities | Amt (Rs.) | Amt (Rs.) | Assets | Amt (Rs.) |
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Creditors | 10,000 | Stock | 5,500 | |||||
| Bills Payable | 3,700 | Investments | 15,000 | |||||
| Investments Fluctuation Reserve | 4,500 | Debtors | 7,100 | |||||
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| 70,750 | 70,750 | |||||||
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Capital A/cs: | Building | 80,000 | ||||||
| Ashu | 1,08,000 | Machinery | 70,000 | |||||
| Harish | 54,000 | 1,62,000 | Furniture | 14,000 | ||||
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| 3,00,000 | 3,00,000 | |||||||
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Sundry Creditors | 41,500 | Cash at Bank | 22,500 | |||||
| Bills Payable | 20,000 | Stock | 80,000 | |||||
| Bank Loan | 40,000 | Debtors | 50,000 | |||||
| General Reserve | 50,000 | Less: Provision for Doubtful Debts | 2,500 | 47,500 | ||||
| Investments Fluctuation Reserve | 40,000 | Investments | 55,000 | |||||
| Capital A/cs: | Premises | 1,51,500 | ||||||
| X | 75,000 | |||||||
| Y | 75,000 | |||||||
| Z | 15,000 | 1,65,000 | ||||||
| 3,56,500 | 3,56,500 | |||||||
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Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
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BALANCE SHEET OF SRIJAN, RAMAN AND MANAN as on 31st March, 2017
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capitals: | Capital: Manan | 10,000 | ||
| Srijan | 2,00,000 | Plant | 2,20,000 | |
| Raman | 1,50,000 | 3,50,000 | Investments | 70,000 |
| Creditors | 75,000 | Stock | 50,000 | |
| Bills Payable | 40,000 | Debtors | 60,000 | |
| Outstanding Salary | 35,000 | Bank | 10,000 | |
| Profit and Loss Account | 80,000 | |||
| 5,00,000 | 5,00,000 | |||
On the above date they decided to dissolve the firm.
(a) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.
(b)
| Assets were realised as follows: | ₹ |
| Plant | 85,000 |
| Stock | 33,000 |
| Debtors | 47,000 |
(c) Investments were realised at 95% of the book value.
(d) The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
(e) A contingent liabillity in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for ₹ 15,000.
(f) Expenses of realisation amounting to ₹ 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decide to dissolve the firm on 31st March, 2019 at which date their Balance Sheet stood as:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Bank Loan |
1,500 |
Trademarks |
1,200 |
||
|
Creditors for Goods |
8,000 |
Machinery |
12,000 |
||
|
Bills Payable |
500 |
Furniture |
400 |
||
|
Capital A/cs: |
Stock |
6,000 |
|||
|
Krishna |
16,000 |
Debtors |
9,000 |
||
|
Arjun |
6,000 |
22,000 |
Less: Provision for Bad Debts |
400 |
8,600 |
|
Cash at Bank |
2,800 |
||||
|
Advertisement Suspense |
1,000 |
||||
|
32,000 |
32,000 |
||||
The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks realised ₹ 800.
(d) Machinery and Stock-in-Trade were taken by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ₹ 5,000) amounted to ₹ 88,000, assets realised ₹ 80,000 (including an unrecorded asset which realised ₹ 4,000). A contingent liability on account of bills discounted ₹ 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ₹ 20,000 each.
Prepare Realisation Account, Partners' Capital Accounts and Cash Account.
X, Y and Z entered into partnership on 1st April, 2016. They contributed capital ₹ 40,000, ₹ 30,000 and ₹ 20,000 respectively and agreed to share profits in the ratio of 3 : 2 : 1. Interest on capital was to be allowed @ 15% p.a. and interest on drawings was to be charged at an average rate of 5%. During the two years ended 31st March, 2018, the firm made profit of ₹ 21,600 and ₹ 25,140 respectively before allowing or charging interest on capital and drawings. The drawings of each partner were ₹ 6,000 per year.
On 31st March, 2018, the partners decided to dissolve the partnership due to difference of opinion. On that date, the creditors amounted to ₹ 20,000. The assets, other than cash ₹ 2,000, realised ₹ 1,21,000. Expenses of dissolution amounted to ₹ 760.
Draw up necessary Ledger Accounts to close the books of the firm.
