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Question
Chopra, Shah and Patel were partners sharing profits in the ratio of 3:2:1. On 31.3.2014 their firm was dissolved. The assets were realized and liabilities were paid off. The accountant prepared Realisation Account, Partner's Capital Accounts and Cash Account but forgot to post few amounts in these accounts.
You are required to complete the below give accounts by posting correct amounts
| Realisation Account | |||
| Dr. | Cr. | ||
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
| To Plant and Machinery | 1,60,000 | By Sundry Creditors | 1,50,000 |
| To Stock | 1,50,000 | By Mrs. Chopra Loan | 1,30,000 |
| To Sundry Debtors | 2,00,000 | By Repairs and Renewals Reserve | 12,000 |
| To Prepaid Insurance | 4,000 | By Provision for Bad debts | 10,000 |
| To Investment | 30,000 | By Cash A/c – (Assets sold) | |
| To Chopra’s Capital A/c (Mrs. Chopra’s Loan) |
1,30,000 | Plant 1,20,000 | |
| To Cash A/c (Dishonored Bill) | 50,000 | Stock 1,20,000 | |
| To Cash (Creditors) | 1,50,000 | Debtors 1,60,000 | 3,80,000 |
| To Cash (Expenses) | 8,000 | By Chopra’s Capital A/c (Investment) |
20,000 |
| ----------------- | ------- | ||
| 8,82,000 | 8,82,000 | ||
| Capital Account | |||||||
| Dr. | Cr. | ||||||
| Particulars |
Chopra Rs |
Shah Rs |
Patel Rs |
Particulars |
Chopra Rs |
Shah Rs |
Patel Rs |
| To Realisation | 20,000 | ----- | ------ | By bal b/d | |||
| -------- | -------- | -------- | -------- | By Realisation (Loan) |
1,30,000 | ||
| -------- | -------- | -------- | -------- | ------------- | -------- | -------- | -------- |
| 2,30,000 | 1,50,000 | 30,000 | 2,30,000 | 1,50,000 | 30,000 | ||
| Cash Account | |||
| Dr. | Cr. | ||
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
| --------------- | -------- | By Realisation A/c (Dishonored Bill) |
50,000 |
| --------------- | -------- | By Realisation (Sundry Creditors) | 1,50,000 |
| To Patel’s Capital A/c | 10,000 | --------------- | -------- |
| By Chopra’s Capital A/c | 1,20,000 | ||
| By Shah’s Capital A/c | 90,000 | ||
| 4,18,000 | 4,18,000 | ||
Solution
| Realisation Account | |||
| Dr. | Cr. | ||
| Particulars | Rs | Particulars | Rs |
| To Plant &Machinery A/c | 1,60,000 | By Sundry Creditors A/c | 1,50,000 |
| To Stock A/c | 1,50,000 | By Mrs. Chopra’s Loan A/c | 1,30,000 |
| To Sundry Debtors A/c | 2,00,000 |
By Repairs and Renewals Reserve A/c |
12,000 |
| To Prepaid Insurance A/c | 4,000 | By Provision for Bad debts A/c | 10,000 |
| To Investment A/c | 30,000 | By Cash A/c (assets sold) | |
| To Chopra’s Capital A/c (Mrs. Chopra ‘s Loan) | 1,30,000 | Plant 1,00,000 | |
| To Cash A/c (Dishonored Bill) | 50,000 | Stock 1,20,000 | |
| To Cash A/c (Creditors) | 1,50,000 | Debtors 1,60,000 | 3,80,000 |
| To Cash A/c (Expenses) | 8,000 | ||
| By Chopra’s Capital A/c (Investment) | 20,000 | ||
| By Loss transferred to | |||
| Chopra’s Capital A/c 90,000 | |||
| Shah’s Capital A/c 60,000 | |||
| Patel’s Capital A/c 30,000 | 1,80,000 | ||
| 8,82,000 | 8,82,000 | ||
| Partner’s Capital Account | |||||||
| Dr. | Cr. | ||||||
| Particulars | Chopra | Shah | Patel | Particulars | Chopra | Shah | Patel |
| To Realisation A/c (Investments) |
20,000 | By Balance b/d | 1,00,000 | 1,50,000 | 20,000 | ||
| To Realisation A/c (Loss) |
90,000 | 60,000 | 30,000 | By Realisation A/c (Loan) | 1,30,000 | ||
| To Cash A/c | 1,20,000 | 90,000 | By Cash A/c | 10,000 | |||
| 2,30,000 | 1,50,000 | 30,000 | 2,30,000 | 1,50,000 | 30,000 | ||
| Cash Account | |||
| Dr. | Cr. | ||
| Particulars | Rs | Particulars | Rs |
| To Balance b/d | 28,000 | By Realisation A/c (Dishonored Bill) | 50,000 |
| To Realisation A/c (Assets sold) | 3,80,000 | By Realisation A/c (Sundry Creditors) |
1,50,000 |
| To Patel’s Capital A/c | 10,000 | By Realisation A/c (Expenses) | 8,000 |
| By Chopra’s Capital A/c | 1,20,000 | ||
| By Shah’s Capital A/c | 90,000 | ||
| 4,18,000 | 4,18,000 | ||
RELATED QUESTIONS
Shanti and Satya were partners in firm in a sharing profit in the ratio of 4:1. On 31st march ,2013 their Balance Sheet was as follows:
Balance Sheet of Shanti and Satya as on 31st March, 2013
| Liabilities | Amount(Rs.) | Assets | Amount(Rs.) |
|
Creditors Workman Compention Fund Satya’s Current Account Capital’s: Shanti Satya
|
45,000 40,000 65,000
2,00,000 1,00,000
|
Bank Debtors Stock Furniture Machinery Shanti’s Current Account
|
55,000 60,000 85,000 1,00,000 1,30,000 20,000
|
| 4,50,000 | 4,50,000 |
On the above date the firm was dissolved:
1. Shanti took over 40% of the stock at 10% less than its book value and the remaining stock was sold for Rs.40,000. Furniture realized Rs.80,000.
2. An unrecorded investment was sold for Rs.20,000. Machinery was sold at a loss of Rs.60,000.
3. Debtors realized Rs.55,000.
4. There was an outstanding bill for repairs for which Rs.19,000 were paid.
Prepare Realisation Account.
Mala, Neela and Kala were partners sharing profits in the ratio of 3: 2: 1. On 1.3.2015 their firm was dissolved. The assets were realized and liabilities were paid off. The accountant prepared Realisation Account, Partners' Capital Accounts and Cash Account, but forgot to post few amounts in these accounts.
You are required to complete these below-given accounts by posting correct amounts.
| Realisation Account | |||
| Dr. | Cr. | ||
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
To Sundry Assets : Machinery 10,000 Stock 21,000 Debtors 20,000 Prepaid Insurance 400 Investment 3,000 To Mala’s Capital A/c Sheela Loan To Cash – Creditors paid To Cash – Dishonored bill paid To Cash Expenses |
54,400 13,000
15,000 5,000 800 |
By Provision for bad debts By Sundry Creditors By Sheela’s Loan By Repairs and Renewals Reserve By Cash – Assets sold Machinery 8,000 Stock 14,000 Debtors 16,000 By Mala’s Capital Investments By ___________
|
1,000 15,000 13,000 1,200
38,000 2,000 ______
|
|
|
88,200 |
|
88,200 |
| Capital Account | |||||||
| Dr. | Cr. | ||||||
| Particulars |
Mala Rs |
Neela Rs |
Kala Rs |
Particulars |
Mala Rs |
Neela Rs |
Kala Rs |
|
---------- ---------- To Cash |
----- ----- 12,000 |
----- ----- 9,000 |
----- -----
|
--------- --------- To Cash |
----- -----
|
----- -----
|
----- ----- 1000 |
| 23,000 | 15,000 | 3,000 | 23,000 | 15,000 | 3,000 | ||
| Cash Account | |||
| Dr. | Cr. | ||
| Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
To Balance b/d To Realisation A/c Sale of Assets To Kala’s Capital A/c
|
2,800 38,000
1,000
|
By Realisation A/c Creditors paid By Dishonoured bill _____________ By Mala’s Capital A/c By Neela’s Capital A/c |
15,000
5,000
12,000 9,000 |
|
|
41,800 |
|
41,800 |
Jayant and Ramakant were partners in the firm. On 31st March 2013 their Balance Sheet was as follows:
| Balance Sheet of Jayant and Ramakant as on 31st March 2013 | |||
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
|
Creditors Workman Compensation Fund Satya’s Current Account Capital's: Jayant Ramaknat |
75,000 45,000 15,000
|
Bank Debtors Stock Furniture Machinery Shanti’s Current Account |
70,000 2,00,000 20,000 20,000 3,12,000 13,000 |
|
|
6,35,000 |
|
6,35,000 |
On the above date the firm was dissolved:
1. Jayant took over 40% of the stock at 20% less than its book value and the remaining stock was sold for Rs 15,000. Furniture realized Rs 20,000.
2. An unrecorded asset was sold for Rs 3,000. Machinery was sold at a loss of Rs 75,000.
3. Debtors realized Rs 10,000.
4. There was an outstanding bill for repairs for which Rs 38,000 were paid.
Prepare Realisation Account
Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals. On the 31st March 2013 their Balance Sheet was as follows:
| Balance Sheet of Hanif and Jubed as on 31st March 2013 | |||
| Liabilities | Rs | Assets | Rs |
|
Creditors Workman Companion Fund General Reserve Hanif’s Current Account Capital's: Hanif 10,00,000 Jubed 5,00,000 |
1,50,000 3,00,000 75,000 25,000
15,00,000 |
Bank Debtors Stock
Furniture Machinery Jubed’s Current Account |
2,00,000 3,40,000 1,50,000
4,60,000 8,20,000 80,000 |
| 20,50,000 | 20,50,000 | ||
On the above date the firm was dissolved:
a. Debtors were realised at a discount of 5%, 50% of the stock was taken over by Hanif at 10% less than the book value. Remaining stock was sold for Rs 65,000.
b. Furniture was taken over by Jubed for Rs 1,35,000. Machinery was sold as scrap for Rs 74,000.
c. Creditors were paid in full.
d. Expenses on realisation Rs 8,000 were paid by Hanif.
Prepare Realisation Account.
Sita and Gita were partners sharing profits and losses in the ratio of 4 : 5. They dissolved their partnership on 31st March, 2021, when their Balance Sheet showed the following balances:
| Particulars | (₹) |
| Sita’s Capital | 30,000 |
| Gita’s Capital | 35,000 |
| Gita’s Current A/c (Dr) | 2,000 |
| Contingency Reserve | 18,000 |
| P/L A/c (Dr) | 4,500 |
On the date of dissolution:
- The firm, upon realisation of assets and settlement of liabilities, made a profit of ₹ 9,000.
- Gita paid the realisation expenses of ₹ 2,000.
- Gita discharged the outstanding salary of the manager of the firm of ₹ 1,000 which was unrecorded in the books.
You are required to prepare the Partners’ Capital Accounts.
When is Realisation Account opened?
Which accounts are not transferred to Realisation Account?
Who should bear the capital deficiency of an insolvent partner?
Which account is debited on repayment of Partner's Loan?
Write the word/term/phrase, which can substitute each of the following statements.
"Debit balance of an insolvent Partner's Capital Account".
Where would the interest on capital be recorded if the fixed capital account is followed in the partnership firm?
On taking responsibility for payment of a liability of ₹ 50,000 by a partner, the account credited will be:
Unrecorded liability when paid on the dissolution of a firm is transferred to ______
In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to ______.
On dissolution, the final balance of the Partner's Capital Account is transferred to ______.
If in case of dissolution of the partnership, there was no Workmen Compensation Fund and firm had to pay ₹ 3,000 as compensation to workers where will be this ₹ 3,000 recorded in the books of accounts?
Anu, Bhanu and Charu were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Anu decided to retire from the firm on 31st March, 2021. The balance sheet of the firm on that date was as follows:
| Balance sheet of Anu, Bhanu and Charu as on 31st March, 2021: |
|||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 24,000 | Bank | 10,000 | ||
| Profit & Loss A/c | 5,000 | Debtors | 20,000 | 19,600 | |
| Capitals: | Less: Provision for Doubtful debts |
400 | |||
| Anu | 31,000 | 83,000 | Stock | 27,000 | |
| Bhanu | 30,000 | Investments | 10,000 | ||
| Charu | 22,000 | Patents | 2,400 | ||
| Premises | 43,000 | ||||
| 1,12,000 | 1,12,000 | ||||
On retirement of Anu, following terms were agreed upon:
- Anu sold her share of premium for goodwill to Bhanu for ₹ 6,000 and to Charu for ₹ 3,000.
- Provision for doubtful debts was to be raised to 5% on debtors.
- Patents were considered valueless.
- Anu was paid ₹ 9,600 through a cheque and balance was transferred to her Loan A/c.
Prepare Revaluation Account and Anu's Capital Account on her retirement.
On dissolution of the partnership firm of A, B and C, the accumulated profits of ₹ 40,000 will be transferred to which of the following account?
Adit and Shiv were partners sharing profits and losses in the ratio of 5 : 4. They dissolved their partnership firm on 31st March 2023, when their Balance Sheet showed the following balances:
| Particulars | (₹) |
| Adit's Capital | 40,000 |
| Shiv's Capital | 30,000 |
| Adit's Current A/c (Cr.) | 3,000 |
| Shiv's Current A/c (Dr.) | 6,000 |
| Loan by the firm to Shiv | 22,000 |
| Profit & Loss Account (Dr.) | 4,500 |
On the date of dissolution of the firm:
- The firm suffered a loss of ₹ 18,000 upon realisation of assets and settlement of liabilities.
- The expenses of dissolution of ₹ 3,000, to be borne by Shiv, were paid by the firm on his behalf.
- The firm had furniture of ₹ 15,000. Adit took over some pieces of the furniture at ₹ 9,000 (being 10% less than the book value). Shiv took over the remaining furniture at 80% of its book value.
You are required to prepare the Partners Capital Accounts.
