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Question
Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31 st March, 2012 was as under:
Balance Sheet as on
31st March, 2012
| Liabilities | Amount(Rs.) | Assets | Amount(Rs.) |
| Sundry Creditors | 16000 | Cash in hand | 500 |
|
Capital A/c Aaba Baba |
2000 2000 |
Stock | 4500 |
| Debtors | 4000 | ||
| Plant and machinery | 5000 | ||
| Furniture | 2000 | ||
| Land and Building | 4000 | ||
| 20000 | 20000 |
Due to weak financial position of the partners the firm is dissolved.
Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.
The assets are realised as follows :-
Stock Rs. 3,000, Plant and Machinery Rs. 3,000, Furniture Rs. 1,000, Land and Building Rs. 2,000 and Debtors Rs. 1,000 only.
Realisation expenses amounted to Rs. 500.
You are required to prepare necessary Ledger Accounts to close the books of the firm.
Solution
In the Books of Aaba and Baba
Realisation A/c
| Particulars | Amount | Amount | Particulars | Amount | Amount |
|
To Sundry Assets Stock Debtors Plant and Machinery Furniture Land and Building |
4500 4000 5000 2000 4000 |
19500 |
By Cash A/c Stock Debtors Plant and Machinery Furniture Land and Building |
3000 1000 3000 1000 2000 |
10000 |
|
To Cash A/c (Realisation Expenses) |
|
500 |
By Loss on Realisation Aaba Baba |
5000 5000 |
10000 |
| 20000 | 20000 |
Partner's Capital A/c
| Particulars | Aaba | Baba | Particulars | Aaba | Baba |
|
To Realisation A/c (Loss) |
5000 | 5000 | By Balance b/d | 2000 | 2000 |
|
By Capital Deficiency A/c (Balancing fig.) |
3000
|
3000
|
|||
| 5000 | 5000 | 5000 | 5000 |
Cash A/c
| Particulars | Amount | Amount | Particulars | Amount | Amount |
| To Balance b/d | 500 | By Realisation Expenses A/c | 500 | ||
| To Realisation A/c | 10000 | ||||
| By Sundry Creditors | 10000 | ||||
| 10500 | 10500 |
Sundry Creditors A/c
| Particulars | Amount | Particulars | Amount |
| To Cash A/c | 10000 | By Balance b/d | 16000 |
| To Capital Deficiency A/c | 6000 | ||
| 16000 | 16000 |
Capital Deficiency A/c
| Particulars | Amount | Amount | Particulars | Amount | Amount |
| To Aaba's Capital A/c | 3000 | By Sundry Creditors | 6000 | ||
| To Baba's Capital A/c | 3000 | ||||
| 6000 | 6000 |
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|
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| Balance Sheet as on 31st March, 2023 | |||
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| Capital Accounts : | Building | 10,500 | |
| Amul | 15,000 | Plant | 13,500 |
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| 61,500 | 61,500 | ||
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(2) Amul agreed to pay off the Bills Payable.
(3) Creditors were paid in full.
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Prepare: Realisation A/c, Partners' Current A/cs, Partners' Capital A/cs and Bank A/c.
Complete the following table:
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| ₹ 30,000 | ? | ₹ 24,000 |
| ? | ₹ 10,000 | ₹ 40,000 |
______ means winding-up of partnership firm.
Mita and Sita, sharing profits in, the ratio 2 : 1, decided to dissolve their partnership firm on 31st March, 2022, on which date their Balance Sheet was as under:
| Balance Sheet of Mita and Sita as on 31st March, 2022 |
|||||
| Liabilities | (₹) | Assets | (₹) | ||
| Sundry Creditors | 40,000 | Land & Building | 29,000 | ||
| Sita's Son's Loan | 2,000 | Plant & Machinery | 20,000 | ||
| Bank Overdraft | 8,000 | Stock | 3,000 | ||
| Capital Accounts: | Debtors | 26,400 | 26,000 | ||
| Mita | 20,000 | 30,000 | Less: Provision for Doubtful Debts |
400 | |
| Sita | 10,000 | Bank | 2,000 | ||
| 80,000 | 80,000 | ||||
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| Balance sheet as on 31st March 2020 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c | Machinery | 50,000 | ||
| Lal | 60,000 | Investments | 24,000 | |
| Bal | 20,000 | Debtors | 55,000 | 52,000 |
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| General Reserve | 6,000 | Stock | 20,000 | |
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| 168000 | 168000 | |||
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|
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The average number of months for which interest on drawings will be calculated, will be:
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Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities.
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