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Question

A, B and C were partners sharing profits in the ratio of 2 : 2 : 1 . They decided to dissolve their firm on 31st March, 2018 when the Balance Sheet was :
Liabilities
Amount
(₹)
Assets
Amount
(₹)
Creditors
40,000
Cash
40,000
Bills Payable
46,000
Debtors
70,000
Employees’ Provident Fund
32,000
Furniture
6,000
64,000
Mrs. A’s Loan
38,000
Stock
50,000
C’s Loan
30,000
Investments
60,000
Investments Fluctuation Reserve
16,000
Furniture
42,000
Capitals A/cs: Machinery
1,36,000
A
1,20,000
Land
1,00,000
B
1,00,000
Goodwill
30,000
C
1,00,000
3,20,000
5,22,000
5,22,000

Following transactions took place :
(a) A took over Stock at ₹ 36,000. He also took over his wife's loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value . Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.

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Solution

Realisation Account
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Debtors
70,000
Provision for Doubtful Debts
6,000
Stock
50,000
Creditors
40,000
Investments
60,000
Bills Payable
46,000
Furniture
42,000
Employee’s Provident Fund
32,000
Machinery
1,36,000
Investment Fluctuation Fund
16,000
Land
1,00,000
Mrs. A’s Loan
38,000
Goodwill
30,000
A’s Capital A/c (Stock)
36,000
A’s Capital A/c (Mrs.A’s Loan)
38,000
B’s Capital A/c (Debtors)
28,000
C’s Capital A/c (Creditors)
20,000
C’s Capital A/c (Investments)
54,000
Cash A/c (Expenses)
4,000
Cash A/c (Debtors) 60% × 35,000
21,000
Cash A/c (Creditors)
20,000
Cash A/c (Furniture)
30,000
Cash A/c (Bills Payable)
46,000
Cash A/c (Machinery)
82,000
Cash A/c (Employees’ Provident Fund)
32,000
Cash A/c (Land)
1,20,000
Cash A/c (Unrecorded Assets)
22,000
Loss on Revaluation transferred to:
A
30,800
B
30,800
C
15,400
77,000
6,48,000
6,48,000
Partners’ Capital Account
Dr.
Cr.
Particulars
A
B
C
Particulars
A
B
C
Realisation A/c (Stock)
36,000
-
-
Balance b/d
1,20,000
1,00,000
1,00,000
Realisation A/c (Debtors)
-
28,000
-
Realisation A/c (Mrs.A’s Loan)
38,000
-
-
Realisation A/c (Investments)
-
-
54,000
Realisation A/c (Creditors)
-
-
20,000
Realisation A/c (Loss)
30,800
30,800
15,400
Cash A/c
91,200
41,200
50,600
1,58,000
1,00,000
1,20,000
1,58,000
1,00,000
1,20,000
C’s Loan A/c
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Cash A/c
30,000
Balance b/d
30,000
30,000
30,000
Cash A/c
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Balance b/d
40,000
Realisation A/c (Creditors)
20,000
Realisation A/c (Debtors)
21,000
Realisation A/c (Expenses)
4,000
Realisation A/c (Furniture)
30,000
Realisation A/c (Bills Payable)
46,000
Realisation A/c (Machinery)
82,000
Realisation A/c (Employees’
Provident Fund)
32,000
Realisation A/c (Land)
1,20,000
C’s Loan A/c
30,000
Realisation A/c
(Unrecorded Assets)
22,000
A’s Capital A/c
91,200
B’s Capital A/c
41,200
C’s Capital A/c
50,600
3,15,000
3,15,000

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