Question

Anup and Sumit are equal partners in a firm. They decided to dissolve the partnership on December 31, 2102. When the balance sheet is as under

$$\begin{array}{cccccccc}& & & & \text{Balance Sheet of Anup and Sumit}& & & \\ & & & & \text{as on December 31, 2012}& & & \end{array}$$
$$\begin{array}{cccccc}\text{Capital and Liabilities}& & \text{Amt.}& \text{Assets}& & \text{Amt.}\\ \text{Sundry Creditors}& & 27,000& \text{Cash at bank}& & 11,000\\ \text{Reserve Fund}& & 10,000& \text{Sundry Debtors}& & 12,000\\ \text{Loan}& & 40,000& \text{Plants}& & 47,000\\ \text{Capitals:}& & & \text{Stock}& & 42,000\\ \text{Anup}& 60,000& & \text{Leasehold Land}& & 60,000\\ \text{Sumit}& \underset{–}{60,000}& 1,20,000& \text{Furniture}& & 25,000\\ & & \underset{–}{}& & & \underset{–}{}\\ & & 1,97,000& & & 1,97,000\\ & & \underset{–}{}& & & \underset{–}{}\end{array}$$
The assets were realised as follows
$$\begin{array}{cc}\text{Leasehold Land}& Rs.72,000\\ \text{Furniture}& Rs.22,500\\ \text{Stock}& Rs.40,500\\ \text{Plant}& Rs.48,000\\ \text{Sundry Debtors}& Rs.10,500\end{array}$$

The creditors were paid Rs. 25,500 in full settlement. Expenses of realisation amount to Rs. 2,500.

Prepare realisation account, bank account, partner's capital account to close the books of the firm.

Answer 1

Dr. Realisation Account Cr.
$$\begin{array}{cccccc}\text{Particulars}& & \text{Amt.}& \text{Particulars}& & \text{Amt.}\\ \text{Sundry Debtors}& & 12,000& \text{Sundry Creditors}& & 27,000\\ \text{Plants}& & 47,000& \text{Loan}& & 40,000\\ \text{Stock}& & 42,000& \text{Bank}& & \\ \text{Leasehold land}& & 60,000& \text{Leasehold Land}& 72,000& \\ \text{Furniture}& & 25,000& \text{Furniture}& 22,500& \\ \text{Bank}& & & \text{Stock}& 40,500& \\ \text{Creditors}& 25,500& & \text{Plant}& 48,000& \\ \text{Loan}& 40,000& & \text{Sundry Debtors}& \underset{–}{10,500}& 1,93,500\\ \text{Expenses}& \underset{–}{2,500}& 68,000& & & \\ \text{Profit Transferred to}& & & & & \\ \text{Anup's Capital A/c}& 3,250& & & & \\ \text{Sumit's capital Account}& \underset{–}{3,250}& 6,500& & & \\ & & \underset{–}{}& & & \underset{–}{}\\ & & 2,60,500& & & 2,60,500\\ & & \underset{–}{}& & & \underset{–}{}\end{array}$$
Dr. Partners' Capital Account Cr.
$$\begin{array}{cccccc}\text{Particulars}& \text{Anup}& \text{Sumit}& \text{Particulars}& \text{Anup}& \text{Sumit}\\ \text{Bank}& 68,250& 68,250& \text{Balance b/d}& 60,000& 60,000\\ & & & \text{Reserve Fund}& 5,000& 5,000\\ & & & \text{Realisation}& 3,250& 3,250\\ & \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}\\ & 68,250& 68,250& & 68,250& 68,250\\ & \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}\end{array}$$
Dr. Bank Account Cr.
$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{Balance b/d}& 11,000& \text{Realisation (Expenses and Liabilities)}& 68,000\\ \text{Realisation (Assets)}& 1,93,500& \text{Anup's Capital A/c}& 68,250\\ & & \text{Sumit's Capital A/c}& 68,250\\ & \underset{–}{}& & \underset{–}{}\\ & 2,04,500& & 2,04,500\\ & \underset{–}{}& & \underset{–}{}\end{array}$$

Note:
Loan Rs. 40,000 can be paid directly through loan account without transferring to realisation account.