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Common Size Financial Statements

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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.

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Solution

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Assets:

Sundry Liabilities:

Stock

25,000

Sundry Creditors

87,000

Debtors

70,000

Bills Payable

13,000

1,00,000

Plant

45,000

Building

35,000

1,75,000

Bank A/c:

Stock

20,000

Bank A/c-

Debtors

60,000

Creditors

87,000

Plant

40,000

Dissolution Expenses

7,000

94,000

Building

30,000

1,50,000

Anil’s Current A/c

13,000

Loss transferred to:

Anil’s Current A/c

19,200

Sunil’s Current A/c

12,800

32,000

2,82,000

2,82,000

Partners’ Current Accounts

Dr.

Cr.

Particulars

Anil

Sunil

Particulars

Anil

Sunil

Realisation A/c (Loss)

19,200

12,800

Balance b/d

15,000

10,000

Capital A/c

8,800

Realisation A/c (Bills Payable paid off)

13,000

Capital A/c

2,800

28,000

12,800

28,000

12,800

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Anil

Sunil

Particulars

Anil

Sunil

Current A/c

2,800

Balance b/d

50,000

30,000

Bank A/c

58,800

27,200

Current A/c

8,800

58,800

30,000

58,800

30,000

Bank Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

30,000

Realisation A/c (Liabilities)

94,000

Realisation A/c (Assets)

1,50,000

Capital A/cs:

Anil

58,800

Sunil

27,200

86,000

1,80,000

1,80,000

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Similar questions

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.

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

Pannalal, Babulal and Hiralal were partners sharing profits and losses in the proportion of 2:2:1, following is their Balance Sheet as on 31^st March, 2008.

Balance Sheet as on 31^st March, 2008
Liabilities	Amount Rs	Assets		Amount Rs
Capital Accounts:		Machinery		25,000
Pannalal	30,000	Stock		10,000
Babulal	10,000	Debtors	27,500
Hiralal	10,000	Loss: R.D.D.	1,500	26,000
General Reserve	3,000	Investment		12,000
Creditors	20,000	Profit and Loss A/c		9,000
Pannalal’s Loan A/c	4,000	Bank		2,000
Bills payable	7,000
	84,000			84,000

On the above date the partners decided to dissolve the firm:

1) Assets were realised: Machinery Rs 22,500, Stock Rs 9,000, Investment Rs 10,500, Debtors Rs 22,500.

2) Dissolution expenses were Rs 1,500.

3) Goodwill of the firm realised Rs 12,000

Pass the necessary Journal entries in the books of the firm.

PRACTICAL PROBLEMS

(When one partner becomes insolvent)

Rahul, Rohit and Ramesh were partners in a firm sharing profit and losses in the ratio of 2:2:1 respectively.
The Balance Sheet as on 31^st March, 2012 was as follows:

Balance Sheet as on 31^st December, 2011
Liabilities	Amount Rs	Assets		Amount Rs
Sundry Creditors	20,000	Cash at Bank		8,000
Bills payable	5,000	Stock		20,000
General Reserve	6,000	Debtors	16,000
Rahul’s Loan A/c	16,000	Less: R.D.D.	1,000	15,000
Capital Account		Plant and Machinery		30,000
Rahul	25,000	Furniture		6,000
Rohit	10,000	Ramesh’s Capital A/c		3,000
	82,000			82,000

The firm was dissolved on the above date:

1) The Assets realised as follows:

Debtors Rs 9,000, Plant and Machinery Rs 26,000, Stock Rs 14,000 and Furniture Rs 3,000.

2) The Creditors were paid Rs 18,000 in full settlement and the bills payable were paid in full.

3) The realisation expenses amounted to Rs 3,000.

4) Ramesh become insolvent and was able to bring in only Rs 1,800 from his private estate.

Prepare:

1) Realisation A/c

2) Bank A/c and

3) Partner’s Capital A/c

PRACTICAL PROBLEMS

A, B and C were partners sharing profits and losses in the ratio of 3:2:1. On 31^st March, 2010. Their Balance Sheet was as follows:

Balance Sheet as on 31^st March, 2010
Liabilities	Amount Rs	Assets		Amount Rs
Sundry Creditors	15,400	Cash at Bank		3,500
Bills payable	3,600	Stock		19,800
A’s loan A/c	10,000	Debtors	15,000
Capital Account:		Less: Provision	1,000	14,000
A	20,000	Join Life Policy		4,000
B	16,000	Plant and Machinery		43,700
C	8,000
Reserve Fund	12,000
	85,000			85,000

The firm was dissolved on 31^st March, 2010 and the assets realised as follows:

1) Join Life Policy was taken over by Mr. A at Rs 5,000.

2) Stock realised Rs 18,000, Debtors realised Rs 14,500, Plant and Machinery was sold for Rs 36,000.

3) Liabilities were paid in full. In addition one bill for Rs 700 under discount was dishonoured and had to be taken up by the firm.

4) There were no realisation expenses.

Give the Journal entries and necessary Ledger Accounts to close the books of the firm.

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Partners’ Current Accounts
Dr.	Cr.
Particulars		Anil	Sunil	Particulars	Anil	Sunil

Realisation A/c (Loss)		19,200	12,800	Balance b/d	15,000	10,000
Capital A/c		8,800		Realisation A/c (Bills Payable paid off)	13,000
				Capital A/c		2,800
		28,000	12,800		28,000	12,800

Partners’ Capital Accounts
Dr.	Cr.
Particulars		Anil	Sunil	Particulars	Anil	Sunil

Current A/c			2,800	Balance b/d	50,000	30,000
Bank A/c		58,800	27,200	Current A/c	8,800
		58,800	30,000		58,800	30,000

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

Realisation Account
Dr.	Cr.
Particulars			Amount Rs	Particulars		Amount Rs

Sundry Assets:				Sundry Liabilities:
Stock		25,000		Sundry Creditors	87,000
Debtors		70,000		Bills Payable	13,000	1,00,000
Plant		45,000
Building		35,000	1,75,000	Bank A/c:
				Stock	20,000
Bank A/c-				Debtors	60,000
Creditors		87,000		Plant	40,000
Dissolution Expenses		7,000	94,000	Building	30,000	1,50,000
Anil’s Current A/c			13,000	Loss transferred to:
				Anil’s Current A/c	19,200
				Sunil’s Current A/c	12,800	32,000
			2,82,000			2,82,000

Bank Account
Dr.	Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Balance b/d		30,000	Realisation A/c (Liabilities)		94,000
Realisation A/c (Assets)		1,50,000	Capital A/cs:
			Anil	58,800
			Sunil	27,200	86,000
		1,80,000			1,80,000