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Question

P, Q and R are three partners sharing profits and losses in the ratio of 3 : 3 : 2 respectively . Their respective capitals are in their profit-sharing proportions . On 1st April, 2017 , the total capital of the firm and the balance of General Reserve are ₹ 80,000 and ₹ 20,000 respectively. During the year 2017-18 the firm made a profit of ₹ 28,000 before charging interest on capital @ 5%. The drawings of the partners are P₹ 8,000; Q₹ 7,000; and R₹ 5,000. On 31st March, 2018 their liabilities were ₹ 18,000.
On this date , they decided to dissolve the firm. The assets realised ₹ 1,08,600 and realisation expenses amounted to ₹ 1,800.
Prepare necessary Ledger Accounts to close the books of the firm.

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Solution


Dr.
Realistationn Account

Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Sundry Assets (WN 1)
1,26,000
Creditors
18,000
Cash A/c (Assets Realised)
1,08,600
Cash A/c:
Loss transferred to:
Creditors
18,000
P’s Capital A/c
7,200
Expenses
1,800
19,800
Q’s Capital A/c
7,200
R’s Capital A/c
4,800
19,200
1,45,800
1,45,800
Partners’ Capital Accounts
Dr.
Cr.
Particulars
P
Q
R
Particulars
P
Q
R
Drawings A/c
8,000
7,000
5,000
Balance b/d
30,000
30,000
20,000
Realisation A/c (Loss)
7,200
7,200
4,800
Interest on Capital A/c
1,500
1,500
1,000
Cash A/c
32,800
33,800
22,200
P/L Appropriation A/c (WN 3)
9,000
9,000
6,000
General Reserve
7,500
7,500
5,000
48,000
48,000
32,000
48,000
48,000
32,000
Cash Account
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Realisation A/c
1,08,600
Realisation A/c
19,800
P’s Capital A/c
32,800
Q’s Capital A/c
33,800
R’s Capital A/c
22,200
1,08,600
1,08,600

Working Note:

WN 1
Memorandum Balance Sheet
as on 31st March, 2018

Liabilities
Amount
Rs
Assets
Amount
Rs
Capital A/cs:
Sundry Assets
1,26,000
P (WN 2)
22,000
(Balancing figure)
Q (WN 2)
23,000
R (WN 2)
15,000
60,000
General Reserve
20,000
Profit and Loss A/c
28,000
Creditors
18,000
1,26,000
1,26,000



WN 2
Computatation of Partners' Capital after drawings as on 31st March, 2018
Dr.
Cr.
Particulars
P
Q
R
Particulars
P
Q
R
Drawings A/c
8,000
7,000
5,000
Balance b/d
30,000
30,000
20,000
Adjusted Capital
22,000
23,000
15,000
30,000
30,000
20,000
30,000
30,000
20,000

WN 3
Profit and Loss Appropriation Account
Dr.
for the year ending 31st March, 2018
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Interest on Capital A/cs:
Profit and Loss A/c
28,000
P
1,500
Q
1,500
R
1,000
4,000
Profit transferred to:
P’s Capital A/c
9,000
Q’s Capital A/c
9,000
R’s Capital A/c
6,000
24,000
28,000
28,000

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