CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon


Question

A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet was:
     
Liabilities Amount
(₹)
Assets Amount
(₹)
Bank Overdraft                    30,000 Cash in Hand 6,000
General Reserve 56,000 Bank Balance 10,000
Investments Fluctuation Reserve            20,000 Sundry Debtors 26,000  
A's Loan 34,000 Less: Provision for Doubtful Debtors 2,000 24,000
Capital A/c:                                     
A 50,000 Investments 40,000
      Stock   10,000
    Furniture   10,000
    Building   60,000
    B's Capital   30,000
  1,90,000   1,90,000
       

On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners' Capital Accounts and Bank Account.


Solution

Realisation Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Sundry Debtors 

26,000

Provision for Doubtful Debts  

2,000

Investments

40,000

Bank Overdraft

30,000

Stock

10,000

Investments Fluctuation Reserve   

20,000

Furniture

10,000

 

 

Building

60,000

A’s Capital A/c (Investments)

35,000

Bank A/c:

 

Bank A/c:

 

Compensation to
Employees

10,000

 

Sundry Debtors 

26,000

 

Bank Overdraft

30,000

40,000

Stock

8,500

 

Profit transferred to:                  

 

Furniture

8,000

 

A’s Capital A/c

29,000

 

Building

1,00,000

1,42,500

B’s Capital A/c       

14,500

43,500

 

 

 

2,29,500

 

2,29,500

 

 

 

 

 
 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

Particulars

A

B

Balance b/d

30,000

Balance b/d

50,000

Realisation A/c (Investment)

35,000

 

General Reserve A/c

37,333

18,667

Bank A/c

81,333

3,167

Realisation A/c (Profit )

29,000

14,500

 

 

 

 

 

 

 

1,16,333

33,167

 

1,16,333

33,167

 

 

 

 

 

 

 

A’s Loan Account 

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

 

 

Balance b/d

34,000

Bank A/c

34,000

 

 

 

34,000

 

34,000

 

 

 

 

 

Bank Account   

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

10,000

Realisation A/c           

40,000

Cash A/c

6,000

A’s Capital A/c

81,333

Realisation A/c          

1,42,500

B’s Capital A/c

3,167

 

 

A’s Loan  A/c

34,000

 

1,58,500

 

1,58,500

 

 

 

 


Accountancy
TS Grewal Vol. I (2019)
All

Suggest Corrections
thumbs-up
 
0


similar_icon
Similar questions
View More


similar_icon
Same exercise questions
View More



footer-image