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Question
Shilpa, Meena and Nanda decided to dissolve their partnership on 31st March, 2019. Their profit-sharing ratio was 3 : 2 : 1 and their Balance Sheet was as under:
BALANCE SHEET OF SHILPA, MEENA AND NANDA as at 31st March, 2019
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Land | 81,000 | ||
| Shilpa | 80,000 | Stock | 56,760 | |
| Meena | 40,000 | 1,20,000 | Debtors | 18,600 |
| Bank Loan | 20,000 | Nanda's Capital | 23,000 | |
| Creditors | 37,000 | Cash | 10,840 | |
| Provision For Doubtful Debts | 1,200 | |||
| General Reserve | 12,000 | |||
| 1,90,200 | 1,90,200 | |||
It is agreed as follows:
The stock of value of ₹ 41,660 are taken over by Shilpa for ₹ 35,000 and she agreed to discharge bank loan. The remaining stock was sold at ₹ 14,000 and debtors amounting to ₹ 10,000 realised ₹ 8,000. Land is sold for ₹ 1,10,000. The remaining debtors realised 50% at their book value. Cost of realisation amounted to ₹ 1,200. There was a typewriter not recorded in the books worth of ₹ 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account, Partners' Capital Accounts, and Cash Account to Close the books of the firm.
Solution
Realisation Account
|
Dr. |
|
Cr. |
|||||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
||||||
|
Land |
81,000 |
Bank Loan |
20,000 |
||||||
|
Stock |
56,760 |
Creditors |
37000 |
||||||
|
Debtors |
18,600 |
Provision for doubtful debts |
1,200 |
||||||
|
Shilpa’s Capital A/c |
20,000 |
Shilpa’s Capital A/c (Stock) |
35,000 |
||||||
|
Cash: |
Cash: |
||||||||
|
Creditors |
31000 |
Stock |
14000 |
||||||
|
Realisation Expenses |
1,200 |
32200 |
Debtors |
12300 |
|||||
|
Realisation Profit |
Land |
1,10,000 |
1,36,300 |
||||||
|
Shilpa’s Capital A/c |
10,470 |
||||||||
|
Meena’s Capital A/c |
6,980 |
||||||||
|
Nanda’s Capital A/c |
3,490 |
20,940 |
|||||||
|
2,29,500 |
2,29,500 |
||||||||
Partners’ Capital Account
|
Dr. |
|
Cr. |
|||||||
|
Particulars |
Shilpa |
Meena |
Nanda |
Particulars |
Shilpa |
Meena |
Nanda |
||
|
Balance b/d |
– |
– |
23,000 |
Balance b/d |
80,000 |
40,000 |
– |
||
|
Realisation |
35,000 |
General Reserve |
6,000 |
4,000 |
2,000 |
||||
|
(Stock) |
Realisation |
20,000 |
|||||||
|
Cash |
81,470 |
50,980 |
(Bank Loan) |
||||||
|
Realisation (Profit) |
10,470 |
6,980 |
3,490 |
||||||
|
Cash |
17,510 |
||||||||
|
1,16,470 |
50,980 |
23,000 |
1,16,470 |
50,980 |
23,000 |
||||
Cash Account
|
Dr. |
|
Cr. |
||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
|||
|
Balance b/d |
10,840 |
Realisation (Expenses) |
32,200 |
|||
|
Realisation (Assets) |
1,36,300 |
Shilpa’s Capital A/c |
81,470 |
|||
|
Nanda’s Capital A/c |
17,510 |
Meena’s Capital A/c |
50,980 |
|||
|
1,64,650 |
1,64,650 |
|||||
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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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| 86,000 | 86,000 | |||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
17,000 |
Bank | 3,500 | ||
| Bills Payable | 12,000 | Stock | 19,800 | ||
| Vinod's Loan |
5,300 |
Debtors |
15,000 |
|
|
| General Reserve |
6,000 |
Less: Provision for Doubtful Debts |
1,000 |
14,000 |
|
| Capital A/cs: | Investments | 4,000 | |||
| Vinod | 25,000 | Furniture | 10,000 | ||
| Vijay |
11,000 |
|
Machinery | 33,000 | |
| Venkat |
8,000 |
44,000 |
|||
|
84,300 |
84,300 |
||||
The following additional information is given:
(a) The Investments are taken by Vinod for ₹ 5,000 in settlement of his loan
(b)
| Assets realised as follows: | ₹ |
| Stock | 17,500 |
| Debtors | 14,500 |
| Furniture | 6,800 |
| Machinery | 30,300 |
(c) Expenses on realisation amounted to ₹ 2,000.
Close the books of the firm giving relevant Ledger Accounts.
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Balance Sheet as at 31st March, 2019
| 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 | |||||
| Capital A/cs: | Less: Provision for Doubtful Debtors | 450 | 6,650 | |||||
| P | 37,550 | Cash | 5,600 | |||||
| Q | 15,000 | 52,550 | R's Capital A/c | 8,000 | ||||
| Plant and Machinery | 30,000 | |||||||
| 70,750 | 70,750 | |||||||
P took over Investments for ₹ 12,500. Stock and Debtors realised ₹ 11,500. Plant and Machinery were sold to Q for ₹ 22,500 for cash. Unrecorded assets realised ₹ 1,500. Realisation expenses paid amounted to ₹ 900.
Prepare necessary Ledger Accounts to close the books of the firm.
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Creditors | 50,400 | Cash | 3,700 | |
| Reserve | 12,000 | Stock | 20,100 | |
| Capital A/cs: | Debtors | 62,600 | ||
| A | 40,000 | Loan to A | 10,000 | |
| B | 25,000 | Investments | 16,000 | |
| C | 15,000 | 80,000 | Furniture | 6,500 |
| Building | 23,500 | |||
| 1,42,400 | 1,42,400 | |||
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(b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
(c) Expenses of realisation amounted to ₹ 1,300.
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Prepare Realisation Account, Partner's Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.
A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2018. As on that date their capitals were: A ₹ 7,000 and B ₹ 4,000. There were also due on Loan A/c to A ₹ 4,500 and to B ₹ 750. The other liabilities amounted to ₹ 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised ₹ 24,000.
Prepare necessary accounts showing the final settlement between partners.
On 1st April, 2018, A, B and C commenced business in partnership sharing profits and losses in proportion of 1/2, 1/3 and 1/6 respectively. They paid into their Bank A/c as their capitals ₹ 22,000; ₹ 10,000 by A, ₹ 7,000 by B and ₹ 5,000 by C. During the year, they drew ₹ 5,000; being ₹ 1,900 by A, ₹ 1,700 by B and ₹ 1,400 by C.
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