Question

A, B and C were equal partners. On 31st March, 2019, their Balance Sheet stood as:

Liabilities		Amount (₹)	Assets	Amount (₹)
Creditors		50,400	Cash	3,700
Reserve		12,000	Stock	20,100
Capital A/cs:			Debtors	62,600
A	40,000		Loan to A	10,000
B	25,000		Investments	16,000
C	15,000	80,000	Furniture	6,500
			Building	23,500
		1,42,400		1,42,400

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 (₹)	Particulars			Amount (₹)
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	40,000	25,000	15,000
Realisation A/c (Loss)		1,000	1,000	1,000	Reserve	4,000	4,000	4,000
Cash A/c		25,000	28,000	18,000
		44,000	29,000	19,000		44,000	29,000	19,000

A’s Loan A/c
Dr.		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	10,000	Bank A/c	10,000
	10,000		10,000

Cash Account
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Balance b/d		3,700	Realisation A/c	52,400
Realisation A/c		1,09,700	A’s Capital A/c	25,000
A's Loan A/c		10,000	B’s Capital A/c	28,000
			C’s Capital A/c	18,000
		1,23,400		1,23,400