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Question
A, B and C were in partnership sharing profits in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm as at 31st March, 2019 was:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Building | 20,000 | ||
| A | 12,410 | Plant | 31,220 | |
| B | 8,650 | Goodwill | 10,000 | |
| C | 80,620 | 1,01,680 | 100 Shares in X Ltd. (At cost) | 2,400 |
| Creditors | 11,210 | 1,000 Shares in Y Ltd. (At cost) | 10,000 | |
| Reserve for Depreciation on Plant | 20,000 | Stock | 11,240 | |
| Debtors | 8,740 | |||
| Bank | 1,210 | |||
| Patents | 38,080 | |||
| 1,32,890 | 1,32,890 | |||
It was agreed to dissolve the partnership as on 31st March, 2019 and the terms of dissolution were−
(a) A to take over the Building at an agreed amount of ₹ 31,500.
(b) B, who was to carry on the business, to take over the Goodwill, Stock and Debtors at book value, the Patents at ₹ 30,000 and Plant at ₹ 5,000. He was also to pay the Creditors.
(c) C to take over shares in X Ltd. at ₹ 15 each.
(d) The shares in Y Ltd. to be divided in the profit-sharing ratio.
Show Ledger Accounts recording the dissolution in the books of the firm.
Solution
Realisation Account
|
Dr. |
|
Cr. |
||||||
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|||||
|
Building |
20,000 |
Creditors |
11,210 |
|||||
|
Plant |
31,220 |
Reserve for Depreciation on Plant |
20,000 |
|||||
|
Good will |
10,000 |
A’s Capital A/c: |
|
|||||
|
100 Shares in X Ltd. |
2,400 |
Building |
31,500 |
|
||||
|
1,000 Shares in Y Ltd. |
10,000 |
Shares of Y Ltd. |
7,000 |
38,500 |
||||
|
Stock |
11,240 |
B’s Capital A/c: |
|
|||||
|
Debtors |
8,740 |
Good will |
10,000 |
|
||||
|
Patents |
38,080 |
Stock |
11,240 |
|
||||
|
B’s Capital A/c (Creditors) |
11,210 |
Debtors |
8,740 |
|
||||
|
|
|
Patents |
30,000 |
|
||||
|
|
|
Plant |
5,000 |
|
||||
|
|
|
Shares of Y Ltd. |
2,000 |
66,980 |
||||
|
|
|
C’s Capital: |
|
|||||
|
|
|
Shares of X Ltd. |
1,500 |
|
||||
|
|
|
Shares of Y Ltd. |
1,000 |
2,500 |
||||
|
|
|
Loss transferred to: |
|
|||||
|
|
|
A’s Capital A/c |
2,590 |
|
||||
|
|
|
B’s Capital A/c |
740 |
|
||||
|
|
|
C’s Capital A/c |
370 |
3,700 |
||||
|
|
1,42,890 |
|
1,42,890 |
|||||
Partners’ Capital Accounts
|
Dr. |
|
Cr. |
||||||
|
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
|
Realisation A/c (Assets) |
38,500 |
66,980 |
2,500 |
Balance b/d |
12,410 |
8,650 |
80,620 |
|
|
Realisation A/c (Loss) |
2,590 |
740 |
370 |
Realisation A/c (Creditors) |
– |
11,210 |
– |
|
|
Bank A/c |
– |
– |
77,750 |
Bank A/c |
28,680 |
47,860 |
|
|
|
|
41,090 |
67,720 |
80,620 |
|
41,090 |
67,720 |
80,620 |
|
Bank Account
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
Balance b/d |
1,210 |
C’s Capital A/c |
77,750 |
||
|
A’s Capital A/c |
28,680 |
|
|
||
|
B’s Capital A/c |
47,860 |
|
|
||
|
|
77,750 |
|
77,750 |
||
Working Notes:
Distribution of Shares in Y Ltd.
`"Distribution of shares in Y Ltd. among the partners:"`
`"A's Share" = 10,000 xx 7/10 = Rs 7,000`
`"B's Share" = 10,000 xx 2/10 = Rs 2,000`
`"C's Share" = 10,000 xx 1/10 = Rs 1,000`
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| BALANCE SHEET as at 31st March, 2019 | ||||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Creditors | 38,000 | Cash at Bank | 11,500 | |
| Mrs. A's Loan | 10,000 | Stock | 6,000 | |
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
17,000 |
Bank | 3,500 | ||
| Bills Payable | 12,000 | Stock | 19,800 | ||
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|
|
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|
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|
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|
84,300 |
84,300 |
||||
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(b)
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Capital A/cs: | Building | 80,000 | ||||||
| Ashu | 1,08,000 | Machinery | 70,000 | |||||
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| Cash in Hand | 8,000 | |||||||
| 3,00,000 | 3,00,000 | |||||||
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capitals: | Capital: Manan | 10,000 | ||
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| 5,00,000 | 5,00,000 | |||
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(b)
| Assets were realised as follows: | ₹ |
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| Stock | 33,000 |
| Debtors | 47,000 |
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