Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows:

Balance Sheet of Rose and Lily as on March 31, 2017

Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

40,000

Cash

16,000

Lily’s loan

32,000

Debtors

80,000

Profit and Loss

50,000

Less: Provision for doubtful Debts

3,600

76,400

Capitals:

Lily

1,60,000

Inventory

1,09,600

Rose

2,40,000

Bills Receivable

40,000

Buildings

2,80,000

5,22,000

5,22,000

Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised Rs 4,84,000. Creditors agreed to take Rs 38,000. Cost of Realisation was Rs 2,400. There was a Motor Cycle in the firm which was bought out of the firm’s money, was not shown in the books of the firm. It was now sold for Rs 10,000. There was a contingent liability in respect of outstanding electric bill of Rs 5,000, Bill Receivable taken over by Rose at Rs 33,000.

Show Realisation Account, Partners Capital Account, Loan Account and Cash Account.

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Solution

Books of Rose and Lily

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Debtors

80,000

Provision for Doubtful Debts

3,600

Inventory

1,09,600

Creditors

40,000

Bills Receivables

40,000

Cash:

Buildings

2,80,000

Motor cycle

10,000

Cash:

Other Assets

4,84,000

4,94,000

Outstanding Electricity Bill

5,000

Rose’s Capital (Bills Receivable)

33,000

Creditors

38,000

Expenses

2,400

45,400

Profit transferred to:

Rose' Capital

6,240

Lily's Capital

9,360

15,600

5,70,600

5,70,600

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Rose

Lily

Particulars

Rose

Lily

Realisation (Bills Receivable)

33,000

Balance b/d

2,40,000

1,60,000

Cash A/c

2,33,240

1,99,360

Profit and Loss

20,000

30,000

Realisation (Profit)

6,240

9,360

2,66,240

1,99,360

2,66,240

1,99,360

Lily's Loan Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Cash

32,000

Balance b/d

32,000

32,000

32,000

Cash Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

16,000

Realisation:

Realisation:

Creditors

38,000

Motor Cycle

10,000

Outstanding Electricity Bill

5,000

Other Assets

4,84,000

4,94,000

Expenses

2,400

45,400

Lily's Loan

32,000

Rose’s Capital A/c

2,33,240

Lily’s Capital A/c

1,99,360

5,10,000

5,10,000

Note: In the solution Contingent Liability of Electricity Bill has been treated as Electricity Bill Payable.

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Similar questions

Rose and Lily shared profits in the ratio of 2 : 3. Their Balance sheet on March 31, 2006 was as follows
Balance Sheet of Rose and Lily
As on March 31, 2006
$\begin{matrix} Capital and Liabilities & Amt. & Assets & Amt. Creditors & 40, 000 & Cash & 16, 000 Lily's Loan & 32, 000 & Debtors & 80, 000 Profit and Loss & 50, 000 & (-) Provision for Doubtful Debts & (3, 600) - ------ - & 76, 400 Capital: & Inventory & 1, 09, 600 Lily & 1, 60, 000 & Bill Receivable & 40, 000 Rose & 2, 40, 000 & Buildings & 2, 80, 000 - ------ - & - ------ - 5, 22, 000 & 5, 22, 000 - ------ - & - ------ - \end{matrix}$
Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised 4,84,000. Creditors agreed to take Rs. 38,000.
Cost of realisation was Rs. 2400. There was a Motor Cycle in the firm which was brought out of the firm's Money, was not shown in the Books of the firm. It was not sold for Rs. 10,000 There was a continigent liability in respect of outstanding electric bill of Rs. 5,000. Bill receivable taken over by Rose at Rs. 33,000.
Show realisation account, partners' capital account, loan account and cash account.

Shilpa, Meena and Nanda decided to dissolve their partnership on March 31,2017. Their profit sharing ratio was 3:2:1 and their Balance Sheet was as under:

Balance Sheet of Shilpa, Meena and Nanda as on March 31, 2017
Liabilities	Amount Rs	Assets	Amount Rs
Capitals:		Land	81,000
Shilpa	80,000	Stock	56,760
Meena	40,000	Debtors	18,600
Bank loan	20,000	Nanda’s Capital Account	23,000
Creditors	37,000	Cash	10,840
Provision for doubtful debts	1,200
General Reserve	12,000
	1,90,200		1,90,200

The stock of value of Rs 41,660 are taken over by Shilpa for Rs 35,000 and she agreed to discharge bank loan. The remaining stock was sold at Rs 14,000 and debtors amounting to Rs 10,000 realised Rs 8,000. land is sold for Rs 1,10,000. The remaining debtors realised 50% at their book value. Cost of Realisation amounted to Rs 1,200. There was a typewriter not recorded in the books worth Rs 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account.

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2:2:1. On 31st March, 2017 their Balance Sheet was as follows:

BALANCE SHEET OF SRIJAN, RAMAN AND MANAN
as on 31-03-2017
$\begin{matrix} Liabilities & Amount & Assets & Amount (R s) & (R s) Capitals : & Capital : Srijan 2, 00, 000 & Manan & 10, 000 Raman 1, 50, 000 - -------- - & 3, 50, 000 & Plant & 2, 20, 000 Creditors & 75, 000 & Investments & 70, 000 Bills payable & 40, 000 & Stock & 50, 000 Outstanding Salary & 35, 000 & Debtors & 60, 000 Bank & 10, 000 Profit and Loss & 80, 000 Total & 5, 00, 000 & Total & 5, 00, 000 \end{matrix}$

On the above date they decided to dissolve the firm:

(i) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.

(ii) Assets were realised as follows : Plant Rs 85,000; Stock Rs 33,000; Debtors Rs 47,000.

(iii) Investments were realised at 95% of the book value.

(iv) The firm had to pay Rs 7,500 for an outstanding repair bill not provided for earlier.

(v) A contingent liability in respect of bills receivable, discounted with the bank has also materialised and had to be discharged for Rs 15,000.

(vi) Expenses of realisation amounting to Rs 3,000 were paid by Srijan.

Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 3:3:4. Their partnership deed provided for the following:

(i) Interest on capital @ 5% p.a.

(ii) Interest on drawing @12% p.a.

(iii) Interest on partner's loan @6% p.a.

Moli was allowed an annual salar of Rs 4,000. Bhola was allowed a commission of 10% of net profit as shown by Profit and Loss Account and Raj was guaranteed a profit of Rs 1,50,000 after making all the adjustments as provided in the partnership agreement.

Their fixed capital were Moli - Rs 5,00,000; Bhola : Rs 8,00,000 and Raj Rs 4,00,000. On 1st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31st March , 2017 before interest on Bhola's loan was Rs 3,06,000. Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year ended 31st March 2017, assuming that Bhola withdrew Rs 5,000 at the end of the end of each month, Moli withdrew Rs 10,000 at the end of each quarter and Raj withdrew Rs 40,000 at the end of each half year.

Sanjay, Tarun and Vineet shared profit in the ratio of 3:2:1. On December 31,2017 their balance sheet was as follows:

Balance Sheet of Sanjay, Tarun and Vineet as on December 31, 2017
Liabilities		Amount Rs	Assets	Amount Rs
Capitals:			Plant	90,000
Sanjay	1,00,000		Debtors	60,000
Tarun	1,00,000		Furniture	32,000
Vineet	70,000	2,70,000	Stock	60,000
Creditors		80,000	Investments	70,000
Bills payable		30,000	Bills receivable	36,000
			Cash in hand	32,000
		3,80,000		3,80,000

On this date the firm was dissolved. Sanjay was appointed to realise the assets. Sanjay was to receive 6% commission on the sale of assets (except cash) and was to bear all expenses of Realisation.

Sanjay realised the assets as follows: Plant Rs 72,000, Debtors Rs 54,000, Furniture Rs 18,000, Stock 90% of the book value, Investments Rs 76,000 and Bills receivable Rs 31,000. Expenses of Realisation amounted to Rs 4,500.

Prepare Realisation Account, Capital Accounts and Cash Account

PRACTICAL PROBLEMS

Ganga, Yamuna and Godavari are in Partnership sharing profits and losses equally. Their Balance sheet as on 31^st December, 2011 was as follows:

Balance Sheet as on 31^st December, 2011
Liabilities	Amount Rs	Assets	Amount Rs
Capital Accounts		Currnet Accounts
Ganga	25,000	Yamuna	20,000
Yamuna	10,000	Godavari	4,000
Godavari	5,000	Premises	17,200
Ganga’s Currnet A/c	3,000	Machinery	10,800
Sundry Creditors	4,000	Debtors	9,600
Bank loan	3,000	Cash	6,400
	50,000		50,000

Godavari was declared insolvent and hence the firm was dissolved as on that date. Premises was sold at Rs 14,800, Machinery realised Rs 6,400. Bad debts and discount allowed to Debtors amounted to Rs 1,600. Sundry creditors agreed to receive 80 paise in a rupee (Rs) in full satisfaction of their claim. Bank Loan was settled at 60% of book value. During the course of dissolution a liability under an action for damages was settled for Rs 1,400 against Rs 2,100 provided in the books of the firm. The expenses of realisation amounted to Rs 900. Goodwill contributed Rs 1,900 from her private Property.

Prepare necessary ledger accounts in the books of the firm.

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Lily's Loan Account
Dr.				Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Cash	32,000	Balance b/d	32,000

	32,000		32,000

Balance Sheet of Rose and Lily as on March 31, 2017
Liabilities	Amount Rs	Assets		Amount Rs
Creditors	40,000	Cash		16,000
Lily’s loan	32,000	Debtors	80,000
Profit and Loss	50,000	Less: Provision for doubtful Debts	3,600	76,400
Capitals:
Lily	1,60,000	Inventory		1,09,600
Rose	2,40,000	Bills Receivable		40,000
		Buildings		2,80,000
	5,22,000			5,22,000

Books of Rose and Lily Realisation Account
Dr.					Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Debtors		80,000	Provision for Doubtful Debts		3,600
Inventory		1,09,600	Creditors		40,000
Bills Receivables		40,000	Cash:
Buildings		2,80,000	Motor cycle	10,000
Cash:			Other Assets	4,84,000	4,94,000
Outstanding Electricity Bill	5,000		Rose’s Capital (Bills Receivable)		33,000
Creditors	38,000
Expenses	2,400	45,400

Profit transferred to:
Rose' Capital	6,240
Lily's Capital	9,360	15,600
		5,70,600			5,70,600

Partners’ Capital Accounts
Dr.					Cr.
Particulars	Rose	Lily	Particulars	Rose	Lily
Realisation (Bills Receivable)	33,000		Balance b/d	2,40,000	1,60,000
Cash A/c	2,33,240	1,99,360	Profit and Loss	20,000	30,000
			Realisation (Profit)	6,240	9,360
	2,66,240	1,99,360		2,66,240	1,99,360

Cash Account
Dr.						Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Balance b/d		16,000	Realisation:
Realisation:			Creditors	38,000
Motor Cycle	10,000		Outstanding Electricity Bill	5,000
Other Assets	4,84,000	4,94,000	Expenses	2,400	45,400
			Lily's Loan		32,000
			Rose’s Capital A/c		2,33,240
			Lily’s Capital A/c		1,99,360
		5,10,000			5,10,000