Question

A, B and C were equal partners . On 31st March,2018, their Balance Sheet stood as:

Liabilities		₹	Assets	₹
Creditors		50,400	Cash	3,700
Reserve		12,000	Stock	20,100
Capital A/cs:			Debtors	62,600
A	30,000		Investments	16,000
B	25,000		Furniture	6,500
C	15,000	70,000	Building	23,500
		1,32,400		1,32,400

The firm was dissolved on the above date on the following terms:
(a) For the purpose of dissolution, Investments were valued at ₹ 18,000 and A took over the Investments at this value.
(b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
(c) Expenses of realisation amounted to ₹ 1,300.
(d) Creditors allowed a discount of ₹ 800.
(e) One Bill receivable for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay anything and hence the bill had to be met by the firm .
Prepare Realisation Account , Partner's Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.

Answer 1

Realisation Account
Dr.						Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Stock			20,100	Creditors			50,400
Debtors			62,600
Investments			16,000	A’s Capital A/c (Investments)			18,000
Furniture			6,500	Cash A/c:
Building			23,500	Furniture and Building	29,700
Cash A/c:				Stock and Debtors	80,000		1,09,700
Expenses		1,300
Creditors		49,600
Bills		1,500	52,400	Loss transferred to :
				A’s Capital A/c	1,000
				B’s Capital A/c	1,000
				C’s Capital A/c	1,000		3,000
			1,81,100				1,81,100

Partners’ Capital Accounts
Dr.									Cr.
Particulars		A	B	C	Particulars	A	B	C
Realisation A/c (Investment)		18,000	–	–	Balance b/d	30,000	25,000	15,000
Realisation A/c (Loss)		1,000	1,000	1,000	Reserve	4,000	4,000	4,000
Cash A/c		15,000	28,000	18,000
		34,000	29,000	19,000		34,000	29,000	19,000

Cash Account
Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Balance b/d		3,700	Realisation A/c	52,400
Realisation A/c		1,09,700	A’s Capital A/c	15,000
			B’s Capital A/c	28,000
			C’s Capital A/c	18,000
		1,13,400		1,13,400