Balance Sheet of P, Q and R as at 31st March, 2019, who were sharing profits in the ratio of 5 : 3 : 1, was:

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bills Payable
40,000
Cash at Bank 40,000

Loan from Bank 30,000 Stock 19,000

General Reserve
9,000
Sundry Debtors
42,000

Capital A/cs:

Less: Provision for Doubtful Debts
2,000

40,000

P 44,000

Q
36,000

Building 40,000

R
20,000

1,00,000
Plant and Machinery
40,000

1,79,000

1,79,000

The partners dissolved the business. Assets realised − Stock ₹ 23,400; Debtors 50%; Fixed Assets 10% less than their book value. Bills Payable were settled for ₹ 32,000. There was an Outstanding Bill of Electricity ₹ 800 which was paid off. Realisation expenses ₹ 1,250 were also paid.
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Liabilities	Amount (₹)	Assets	Amount (₹)
Bills Payable	40,000	Cash at Bank	40,000
Loan from Bank	30,000	Stock	19,000
General Reserve	9,000	Sundry Debtors	42,000
Capital A/cs:		Less: Provision for Doubtful Debts	2,000	40,000
P	44,000
Q	36,000		Building	40,000
R	20,000	1,00,000	Plant and Machinery	40,000

	1,79,000		1,79,000

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Solution

Realisation Account

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Building

40,000

Provision for Doubtful Debts

2,000

Plant and machinery

40,000

Bills Payable

40,000

Stock

19,000

Loan from Bank

30,000

Sundry Debtors

42,000

Bank A/c:

Bank A/c:

Bills Payable

32,000

Stock

23,400

Outstanding Bill

800

Debtors

21,000

Expenses

1,250

Building

36,000

Loan from Bank

30,000

64,050

Plant and Machinery

36,000

1,16,400

Loss transferred to:

P’s Capital A/c

9,250

Q’s Capital A/c

5,550

RCapital A/c

1,850

16,650

2,05,050

2,05,050

Partners’ Capital Accounts

Dr.

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

Realisation A/c (Loss)

9,250

5,550

1,850

Balance b/d

44,000

36,000

20,000

Reserve Fund

5,000

3,000

1,000

Bank A/c

39,750

33,450

19,150

49,000

39,000

21,000

49,000

39,000

21,000

Bank Account

Dr.

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

40,000

Realisation A/c

64,050

Realisation A/c

1,16,400

P’s Capital A/c

39,750

Q’s Capital A/c

33,450

R’s Capital A/c

19,150

1,56,400

1,56,400

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PRACTICAL PROBLEMS

Anil and Sunil were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as on 31^st March, 2009.

Balance Sheet as on 31^st March, 2009
Liabilities	Amount Rs	Assets	Amount Rs
Capital Account		Bank	30,000
Anil	50,000	Stock	25,000
Sunil	30,000	Debtors	70,000
Current Account		Plant	45,000
Anil	15,000	Building	35,000
Sunil	10,000
Creditors	87,000
Bills payable	13,000
	2,05,000		2,05,000

The firm was dissolved on the above date and the assets realised as under:

1) Stock Rs 20,000, Debtors Rs 60,000, Plant Rs 40,000 and Building Rs 30,000.

2) Anil agreed to pay off the bills payable.

3) Creditors were paid in full.

4) Dissolution expenses were Rs 7,000.

Prepare:

(i) Realisation Account

(ii) Bank Account

(iii) Current Account and Capital Account of the partners.

PRACTICAL PROBLEMS

X, Y and Z were carrying on business. They share profits and losses in the ratio of 5:3:2 respectively. Their Balance Sheet as on 31^st March, 2010 was as under:

Balance Sheet as on 31^st March, 2010
Liabilities	Amount Rs	Assets		Amount Rs
Sundry Creditors	21,000	Plant and Machinery		20,000
Y’s loan	5,000	Investment		8,000
Reserve fund	20,000	Stock		30,000
Capital Account:		Debtors	18,000
X	20,000	Less: R.D.D.	1,000	17,000
Y	10,000	Cash in hand		2,000
Z	4,000	Cash at Bank		3,000
	80,000			80,000

On the above date the firm was dissolved and the assets realised as under:

1) Investment Rs 5,000, Stock Rs 24,000 and Debtors Rs 15,000.

2) The Plant and Machinery was taken over by Mr. ‘X’ at book value.

3) Sundry Creditors and Mr. ‘Y’ loan were paid in full.

4) Realisation expenses incurred Rs 1,000.

Prepare Realisation Account, Partner’s Capital Account and Bank Account

PRACTICAL PROBLEMS

Sushil and Sumit were in partnership sharing profits and losses in the proportion of 3/5 and 2/5 respectively. On 31^st March, 2005 they decide to dissolve the firm when their Balance Sheet was as under:

Balance Sheet as on 31^st March, 2005
Liabilities	Amount Rs	Assets	Amount Rs
Sushil’s Capital	20,000	Plant and Machinery	15,000
Sumit’s Capital	18,000	Stock	15,000
General Reserve	5,000	Sundry Debtors	22,000
Sumit’s Loan A/c	2,000	Bank	3,000
Sundry Creditors	10,000
	55,000		55,000

The Assets realised as follows: Stock Rs 14,000, Plant and Machinery Rs 12,000 and Debtors Rs 20,000. The Sundry Creditors were paid Rs 9,000 in full settlement.

Prepare: Realisation Account, Partners Capital Accounts and Bank Account.

Q. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1 . On 31st March, 2018 , their Balance Sheet was:


Liabilities	₹	Assets		₹
Bank Overdraft	30,000	Cash in Hand		6,000
General Reserve	56,000	Bank Balance		10,000
Investments Fluctuation Reserve	20,000	Sundry Debtors	26,000
A's Loan	34,000	Less: Provision for Doubtful Debtors	2,000	24,000
Capital A/c:		Investments		40,000
A	50,000	Stock		10,000
		Furniture		10,000
		Building		60,000
		B's Capital		30,000
	1,90,000			1,90,000

On that date , the partners decide to dissolve the firm . A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount . The firm could realise Stock at 15% less and Furniture at 20% less than the book value . Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account , Partners' Capital Accounts and Bank Account .

Q. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet was:


Liabilities	Amount (₹)	Assets		Amount (₹)
Bank Overdraft	30,000	Cash in Hand		6,000
General Reserve	56,000	Bank Balance		10,000
Investments Fluctuation Reserve	20,000	Sundry Debtors	26,000
A's Loan	34,000	Less: Provision for Doubtful Debtors	2,000	24,000
Capital A/c:
A	50,000	Investments		40,000
		Stock		10,000
		Furniture		10,000
		Building		60,000
		B's Capital		30,000
	1,90,000			1,90,000

On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners' Capital Accounts and Bank Account.

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Realisation Account
Dr.					Cr.
Particulars		Amount (₹)	Particulars			Amount (₹)
Building		40,000	Provision for Doubtful Debts			2,000
Plant and machinery		40,000	Bills Payable			40,000
Stock		19,000	Loan from Bank			30,000
Sundry Debtors		42,000
Bank A/c:			Bank A/c:
Bills Payable	32,000		Stock	23,400
Outstanding Bill	800		Debtors	21,000
Expenses	1,250		Building	36,000
Loan from Bank	30,000	64,050	Plant and Machinery	36,000		1,16,400
			Loss transferred to:
			P’s Capital A/c	9,250
			Q’s Capital A/c	5,550
			RCapital A/c	1,850		16,650
		2,05,050				2,05,050

Partners’ Capital Accounts
Dr.								Cr.
Particulars	P	Q	R	Particulars	P	Q	R
Realisation A/c (Loss)	9,250	5,550	1,850	Balance b/d	44,000	36,000	20,000
				Reserve Fund	5,000	3,000	1,000
Bank A/c	39,750	33,450	19,150
	49,000	39,000	21,000		49,000	39,000	21,000

Bank Account
Dr.				Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
Balance b/d	40,000	Realisation A/c	64,050
Realisation A/c	1,16,400	P’s Capital A/c	39,750
		Q’s Capital A/c	33,450
		R’s Capital A/c	19,150
	1,56,400		1,56,400