Question

Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2019 at which date their Balance Sheet stood as:

Liabilities		₹	Assets	₹
Capital A/cs:			Building	45,000
Bale	50,000		Machinery	15,000
Yale	40,000	90,000	Furniture	12,000
General Reserve		8,000	Debtors	8,000
Bale's Loan A/c		3,000	Stock	24,000
Creditors		14,000	Bank	11,000
		1,15,000		1,15,000

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(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,000.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account.
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account; (ii) Capital Accounts of Partners;
(iii) Bale's Loan Account; (iv) Bank Account.

Answer 1

Realisation Account
Dr.							Cr.
Particulars			Amount (₹)	Particulars			Amount (₹)
Building			45,000	Creditors			14,000
Machinery			15,000	Bank A/c:
Furniture			12,000	Stock	22,000
Debtors			8,000	Debtors	7,500
Stock			24,000	Machinery	16,000
				Building	35,000		80,500
Bank A/c:
Creditors		14,000		Bale’s Loan			500
Expenses		2,500	16,500	Yale’s Capital A/c (Furniture)			9,000
				Loss transferred to:
				Bale’s Capital A/c		8,250
				Yale’s Capital A/c		8,250	16,500
			1,20,500				1,20,500

Partners’ Capital Accounts
Dr.							Cr.
Particulars		Bale	Yale	Particulars	Bale	Yale
Realisation A/c (Loss)		8,250	8,250	Balance b/d	50,000	40,000
Realisation A/c		–	9,000	General Reserve (Old Ratio)	4,000	4,000
Bank A/c		45,750	26,750
		54,000	44,000		54,000	44,000

Bale’s Loan Account
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Bank A/c		2,500	Balance b/d	3,000
Realisation A/c		500
		3,000		3,000

Bank Account
Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Balance b/d		11,000	Bale’s Loan	2,500
Realisation A/c		80,500	Realisation A/c	16,500
			Bale’s Capital A/c	45,750
			Yale’s Capital A/c	26,750
		91,500		91,500