Question

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under:

Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017
Liabilities		Amount Rs	Assets	Amount Rs
Sundry Creditors		20,000	Bank	7,500
Bills payable		25,500	Sundry Debtors	58,000
Babu’s loan		30,000	Stock	39,500
Capital’s:			Machinery	48,000
Ashok	70,000		Investment	42,000
Babu	55,000		Freehold Property	50,500
Chetan	27,000	1,52,000
Current Accounts :
Ashok	10,000
Babu	5,000
Chetan	3,000	18,000
		2,45,500		2,45,500

The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.

Prepare Realisation Account, Partners Capital Account, Bank Account.

Answer 1

Realisation Account
Dr.								Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Sundry Debtors			58,000	Sundry Creditors			20,000
Stock			39,500	Bills Payable			25,500
Machinery			48,000	Ashok’s Current A/c (Investment)			40,000
Investment			42,000	Babu’s Current A/c (Machinery)			45,000
Freehold property			50,500	Chetan’s Current A/c			55,000
Bank:				(Free hold property)
Sundry Creditors		18,600		Bank:
Bills payable		25,500		Sundry Debtors		56,500
Expenses		3,000	47,100	Stock		36,500
Profit Transferred to				Unrecorded computer		9,000	1,02,000
Ashok’s Current A/c		1,200
Babu’s Current A/c		800
Chetan’s Current A/c		400	2,400
			2,87,500				2,87,500

Partners' Current Accounts
Dr.									Cr.
Particulars		Ashok	Babu	Chetan	Particulars	Ashok	Babu	Chetan
Realisation		40,000	45,000	55,000	Balance b/d	10,000	5,000	3,000
(Assets taken)					Realisation (Profit)	1,200	800	400
					Ashok's Capital A/c	28,800
					Babu's Capital A/c		39200
					Chetan's Capital A/c			51600
		40,000	45,000	55,000		40,000	45,000	55,000

Partners' Capital Accounts
Dr.									Cr.
Particulars		Ashok	Babu	Chetan	Particulars	Ashok	Babu	Chetan
Ashok's Current		28,800			Balance b/d	70,000	55,000	27,000
Babu's Current			39200		Bank			24,600
Chetan's Current				51600
Bank		41,200	15,800
		70,000	55,000	51,600		70,000	55,000	51,600

Babu’s Loan A/c
Dr.					Cr.
Particulars		Amount	Particulars	Amount
Cash A/c		30,000	Balance b/d	30,000
		30,000		30,000

Bank Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Balance b/d		7,500	Realisation (Payment of Expenses	47,100
Realisation (Assets realised )		102,000	and Liabilities)
Chetan’s Capital A/c		24,600	Babu’s Loan	30,000
			Ashok’s Capital A/c	41,200
			Babu’s Capital A/c	15,800
		1,34,100		1,34,100