Question

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve teh partnership of the december 31, 2012, when the balance sheet of the firm as under
$$\begin{array}{cccccccc}& & & & \text{Balance Sheet Of Ashok, Babu and Chetan}& & & \end{array}$$
$$\begin{array}{cccccccc}& & & & \text{As on December 31, 2012}& & & \end{array}$$

$$\begin{array}{ccccc}\text{Liabilities}& & \text{Amt.}& \text{Assets}& \text{Amt.}\\ \text{Sundry Creditors}& & 20,000& \text{Bank}& 7,500\\ \text{Bills Payable}& & 25,500& \text{Sundry Debtors}& 58,000\\ \text{Babu's Loan}& & 30,000& \text{Stock}& 39,500\\ \text{Capital}& & & \text{Machinery}& 48,000\\ \text{Ashok}& 70,000& & \text{Investment}& 42,000\\ \text{Babu}& 55,000& & \text{Freehold Property}& 50,500\\ \text{Chetan}& \underset{–}{27,000}& 1,52,000& & \\ \text{Current Accounts}& & & & \\ \text{Ashok}& 10,000& & & \\ \text{Babu}& 5,000& & & \\ \text{Chetan}& \underset{–}{3,000}& 18,000& & \\ & & \underset{–}{}& & \underset{–}{}\\ & & 2,45,500& & 2,45,500\end{array}$$
The Machinery was taken over by Babu for Rs. 45,000. Ashok took over the Investment for Rs. 40,000 and freehold property took over by Chetan At Rs. 55,000 The remaining Assets realised as follows Sundry Debtors Rs. 56,500 and Stock Rs. 36,500. Sundry creditors were settled at discount of 7%. A office computer, Not shown in the bookis of accounts realised Rs. 9,000. realisation expenses amounted to Rs. 3,000. Prepare realisation account, partners capital account, bank account.

Answer 1

$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Realisation Account}& & & \text{Cr}\end{array}$$

$$\begin{array}{cccccc}\text{Liabilities}& & \text{Amt.}& \text{Assets}& & \text{Amt.}\\ \text{Sundry Debtorss}& & 58,000& & \text{Sundry Creditors}& 20,000\\ \text{To Stock}& & 39,500& \text{By Bills Payable}& & 25,500\\ \text{To Machinery}& & 48000& \text{By Ashok's Current A/c (Investment)}& & 40,000\\ \text{To Investment}& & 42,000& \text{By Bubu's current A/c(Machinery)}& & 45,000\\ \text{To Freehold Property}& & 50,500& \text{By Chetan's Current A/c (Free hold property)}& & 55,000\\ \text{To bank}& & & \text{By Bank}& & \\ \text{Sundry Creditors}& 18,600& & \text{By Sundry Debtors}& 56,500& \\ \text{Bills Payable}& 25,500& & \text{By Stock}& 36,500& \\ \text{Expenses}& \underset{–}{3,000}& 47,100& \text{By Unrecorded Computer}& \underset{–}{9,000}& 1,02,000\\ \text{To Profit Transferred to}& & & & & \\ \text{Ashok's Current A/c}& 1,200& & & & \\ \text{Babu's Current A/c}& 800& & & & \\ \text{Chetan's Current A/c}& \underset{–}{400}& 2,400& & & \\ & & & \underset{–}{}& & \underset{–}{}\\ & & & 2,87,500& & 2,87,500\\ & & & \underset{–}{}& & \underset{–}{}\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Partners' Current Account}& & & \text{Cr}\end{array}$$

$$\begin{array}{cccccccc}\text{Particulars}& \text{Ashok}& \text{Babu}& \text{Chetan}& \text{Particulars}& \text{Ashok}& \text{Babu}& \text{Chetan}\\ \text{To Realisation}& 40,000& 45,000& 55,000& \text{By Balance b/d}& 10,000& 5,000& 3000\\ \text{(Assets Taken)}& & & & \text{By realisation}& 1,200& 800& 400\\ & & & & \text{(Profit)}& & & \\ & & & & \text{By Ashok's Capital A/c}& 28,800& -& -\\ & & & & \text{By Babu's Capital A/c}& -& 39,200& -\\ & & & & \text{By chetan's Capital A/c}& -& -& 51,600\\ & 40,000& 45,000& 55,000& & 40,000& 48,000& 55,000\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Partners' Capital Account}& & & \text{Cr}\end{array}$$

$$\begin{array}{cccccccc}\text{Particulars}& \text{Ashok}& \text{Babu}& \text{Chetan}& \text{Particulars}& \text{Ashok}& \text{Babu}& \text{Chetan}\\ \text{To Ashok's Current}& 28,800& -& -& \text{By Balance b/d}& 70,000& 55,000& 27,000\\ \text{To Babu's Current}& -& 39,200& -& \text{By Bank (Balancing Figure)}& -& -& 24,600\\ \text{To Chetan's Current}& -& -& 51,600& & & & \\ \text{to bank (Balancing Figure)}& 41,200& 15,800& -& & & & \\ & 70,000& 55,000& 51,600& & 70,000& 55,000& 51,600\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Babu's Loan Account}& & & \text{Cr}\end{array}$$
$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{To Bank A/c}& \underset{–}{30,000}& \text{By Balance B/d}& \underset{–}{30,000}\\ & 30,000& & 30,000\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Bank Account}& & & \text{Cr}\end{array}$$

$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{To balance b/d}& 7,500& \text{By Realisation (Payment of Expenses and Liabilities)}& 47,100\\ \text{To Realisation (Assets Realised)}& 1,02,000& \text{By Babu's Loan}& 30,000\\ & & \text{By Ashok's Capital A/c}& 41,200\\ \text{To Chetan's Capital A/c}& 24,600& \text{By Babu's Capital A/c}& 15,800\\ & \underset{–}{}& & \underset{–}{}\\ & 1,34,100& & 1,34,100\\ & \underset{–}{}& & \underset{–}{}\end{array}$$
Note
No information is givne regading bills payable but still it will be paid as per sectioon 48 related to dissolution in Partnership 1932.