Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was:

Balance Sheet of Ashu and Harish as on December 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Capitals:

Building

80,000

Ashu

1,08,000

Machinery

70,000

Harish

54,000

1,62,000

Furniture

14,000

Creditors

88,000

Stock

20,000

Bank overdraft

50,000

Investments

60,000

Debtors

48,000

Cash in hand

8,000

3,00,000

3,00,000

Ashu is to take over the building at Rs 95,000 and Machinery and Furniture is take over by Harish at value of Rs 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs 46,000, expenses of Realisation amounted to Rs 3,000. Prepare necessary ledger Account.

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Solution

Books of Ashu and Harish

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Building

80,000

Creditors

88,000

Machinery

70,000

Bank overdraft

50,000

Furniture

14,000

Ashu’s Capital A/c (Assets taken)

1,43,000

Stock

20,000

Harish’s Capital A/c (Assets taken)

1,12,000

Investments

60,000

Cash (Debtors)

46,000

Debtors

48,000

Ashu’s Capital A/c (Creditors)

88,000

Harish’s Capital A/c (Bank Overdraft)

50,000

Cash (Expenses)

3,000

Profit transferred to

Ashu’s Capital A/c

3,600

Harish’s Capital A/c

2,400

6,000

4,39,000

4,39,000

Partners’ Capital Account

Dr.

Cr.

Particulars

Ashu

Harish

Particulars

Ashu

Harish

Realisation (Assets taken)

1,43,000

1,12,000

Balance b/d

1,08,000

54,000

Cash

56,600

Realisation (Liabilities)

88,000

50,000

Realisation (Profit)

3,600

2,400

Cash

5,600

1,99,600

1,12,000

1,99,600

1,12,000

Cash Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

8,000

Realisation (Expenses)

3,000

Realisation (Debtors)

46,000

Ashu’s Capital A/c

56,600

Harish’s Capital A/c

5,600

59,600

59,600

NOTE: As per the solution, the Profit on Realisation is Rs 6,000; however, the answer mentioned in the book is Rs 6,000 as loss on realisation.

Working Notes:

Ashu

Harish

Building

95,000

Machinery and Furniture

80,000

Stock (3:2)

12,000

8,000

Investment (3:2)

36,000

24,000

Rs 1,43,000

Rs 1,12,000

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Similar questions

Q. Ashu and Harish are partners sharing profit and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2019. Their Balance Sheet on the above date was:


Liabilities		Amount (₹)	Assets	Amount (₹)
Capital A/cs:			Building	80,000
Ashu	1,08,000		Machinery	70,000
Harish	54,000	1,62,000	Furniture	14,000
Creditors		88,000	Stock	20,000
Bank Overdraft		50,000	Investments	60,000
			Debtors	48,000
			Cash in Hand	8,000

		3,00,000		3,00,000

Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit-sharing ratio. Debtors realised for ₹ 46,000, expenses of realisation amounted to ₹ 3,000. Prepare necessary Ledger Accounts.

Ashu And Harish are partners sharing profit and losses as 3: 2 They decided to dissolve the firm on december 31. 2012. Their balance sheet on the above date was
$\begin{matrix} Balance Sheet of Ashu and Harish as on December 31. 2012 \end{matrix}$
$\begin{matrix} Liabilities & Amt. & Assets & Amt. Capitals & Building & 80, 000 Ashu & 1, 08, 000 & Machinery & 70, 000 Harish & 54, 000 - ------ - & 1, 62, 000 & Furniture & 14, 000 Creditors & 88, 000 & Stock & 20, 000 Bank Overdraft & 50, 000 & Investment & 60, 000 Debtors & 48, 000 Cash in Hand & 8, 000 - ---------- - & - ---------- - 3, 00, 000 & 3, 00, 000 - ---------- - & - ---------- - \end{matrix}$

Ashu is to take over the building at Rs. 95,000 and Machinery and Furniture is taken over by Harish at value of Rs. 80,000. Ashu agreed to pay creditor and Harish agreed to meet bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs. 46,000. Expenses of realisation amounted to Rs. 3,000.
Prepare necessary ledger account.

The following is the Balance sheet of Tanu and Manu, who shares profit and losses in the ratio of 5:3, On December 31,2017:

Balance Sheet of Tanu and Manu as on December 31, 2017
Liabilities		Amount Rs	Assets	Amount Rs
Sundry Creditors		62,000	Cash at Bank	16,000
Bills Payable		32,000	Sundry Debtors	55,000
Bank Loan		50,000	Stock	75,000
Reserve fund		16,000	Motor car	90,000
Capital:			Machinery	45,000
Tanu	1,10,000		Investment	70,000
Manu	90,000	2,00,000	Fixtures	9,000
		3,60,000		3,60,000

On the above date the firm is dissolved and the following agreement was made: Tanu agree to pay the bank loan and took away the sundry debtors. Sundry creditors accepts stock and paid Rs 10,000 to the firm. Machinery is taken over by Manu for Rs 40,000 and agreed to pay of bills payable at a discount of 5%.. Motor car was taken over by Tanu for Rs 60,000. Investment realised Rs 76,000 and fixtures Rs 4,000. The expenses of dissolution amounted to Rs 2,200.

Prepare Realisation Account, Bank Account and Partners Capital Accounts.

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.

PRACTICAL PROBLEMS

Anil and Sunil were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as on 31^st March, 2009.

Balance Sheet as on 31^st March, 2009
Liabilities	Amount Rs	Assets	Amount Rs
Capital Account		Bank	30,000
Anil	50,000	Stock	25,000
Sunil	30,000	Debtors	70,000
Current Account		Plant	45,000
Anil	15,000	Building	35,000
Sunil	10,000
Creditors	87,000
Bills payable	13,000
	2,05,000		2,05,000

The firm was dissolved on the above date and the assets realised as under:

1) Stock Rs 20,000, Debtors Rs 60,000, Plant Rs 40,000 and Building Rs 30,000.

2) Anil agreed to pay off the bills payable.

3) Creditors were paid in full.

4) Dissolution expenses were Rs 7,000.

Prepare:

(i) Realisation Account

(ii) Bank Account

(iii) Current Account and Capital Account of the partners.

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Balance Sheet of Ashu and Harish as on December 31, 2017
Liabilities		Amount Rs	Assets	Amount Rs
Capitals:			Building	80,000
Ashu	1,08,000		Machinery	70,000
Harish	54,000	1,62,000	Furniture	14,000
Creditors		88,000	Stock	20,000
Bank overdraft		50,000	Investments	60,000
			Debtors	48,000
			Cash in hand	8,000
		3,00,000		3,00,000

Books of Ashu and Harish Realisation Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Building		80,000	Creditors	88,000
Machinery		70,000	Bank overdraft	50,000
Furniture		14,000	Ashu’s Capital A/c (Assets taken)	1,43,000
Stock		20,000	Harish’s Capital A/c (Assets taken)	1,12,000
Investments		60,000	Cash (Debtors)	46,000
Debtors		48,000
Ashu’s Capital A/c (Creditors)		88,000
Harish’s Capital A/c (Bank Overdraft)		50,000
Cash (Expenses)		3,000
Profit transferred to
Ashu’s Capital A/c	3,600
Harish’s Capital A/c	2,400	6,000
		4,39,000		4,39,000

Partners’ Capital Account
Dr.						Cr.
Particulars	Ashu	Harish	Particulars	Ashu	Harish
Realisation (Assets taken)	1,43,000	1,12,000	Balance b/d	1,08,000	54,000
Cash	56,600		Realisation (Liabilities)	88,000	50,000
			Realisation (Profit)	3,600	2,400
			Cash		5,600
	1,99,600	1,12,000		1,99,600	1,12,000

Cash Account
Dr.				Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Balance b/d	8,000	Realisation (Expenses)	3,000
Realisation (Debtors)	46,000	Ashu’s Capital A/c	56,600
Harish’s Capital A/c	5,600
	59,600		59,600