Question

Surjit and Rahi were sharing profits (losses) in the ratio of 3:2, their Balance Sheet as on March 31, 2017 is as follows:

Balance Sheet of Surjit and Rahi as on March 31, 2017
Liabilities	Amount Rs	Assets	Amount Rs
Creditors	38,000	Bank	11,500
Mrs. Surjit loan	10,000	Stock	6,000
Reserve	15,000	Debtors	19,000
Rahi’s loan	5,000	Furniture	4,000
Capital’s:		Plant	28,000
Surjit	10,000	Investment	10,000
Rahi	8,000	Profit and Loss	7,500
	86,000		86,000

The firm was dissolved on March 31, 2017 on the following terms:

1. Surjit agreed to take the investments at Rs 8,000 and to pay Mrs. Surjit’s loan.

2. Other assets were realised as follows:

Stock	Rs	5,000
Debtors	Rs	18,500
Furniture	Rs	4,500
Plant	Rs	25,000

3. Expenses on Realisation amounted to Rs 1,600.

4. Creditors agreed to accept Rs 37,000 as a final settlement.

You are required to prepare Realisation Account, Partners’ Capital Account and Bank Account.

Answer 1

Books of Surjit and Rahi Realisation Account
Dr.						Cr.
Particulars			Amount Rs	Particulars		Amount Rs
Stock			6,000	Creditors		38,000
Debtors			19,000	Mrs. Surjit's Loan		10,000
Furniture			4,000	Surjit’s Capital A/c (Investment)		8,000
Plant			28,000	Bank:
Investment			10,000	Stock	5,000
Surjit’s Capital A/c			10,000	Debtors	18,500
(Mrs. Surjit's Loan)				Furniture	4,500
Bank:				Plant	25,000	53,000
Expenses		1,600		Loss transferred to:
Creditors		37,000	38,600	Surjit’s Capital A/c	3,960
				Rahi’s Capital A/c	2,640	6,600
			1,15,600			1,15,600

Partners’ Capital Account
Dr.								Cr.
Particulars		Surjit	Rahi	Particulars		Surjit	Rahi
Realisation (Investment)		8,000		Balance b/d		10,000	8,000
Realisation (Loss)		3,960	2,640	Realisation (Mrs. Surjit Loan)		10,000
Profit and Loss		4,500	3,000
Bank		12,540	8,360	Reserve		9,000	6,000
		29,000	14,000			29,000	14,000

Rahi's Loan Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
			Balance b/d	5,000
Bank		5,000
		5,000		5,000

Bank Account
Dr.						Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Balance b/d		11,500	Realisation (Creditors and Expenses)		38,600
Realisation A/c (Assets realised)		53,000	Rahi’s Loan		5,000
			Surjit’s Capital A/c		12,540
			Rahi’s Capital A/c		8,360
		64,500			64,500