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Standard XII
Accountancy
Revaluation of Assets (Retirement)
PRACTICAL PRO...
Question

PRACTICAL PROBLEMS

Gautam, Viral and Ashwin were Partners sharing profits and losses equally. Their Balance sheet as on 31st December, 2011 was as follows:

Balance Sheet as on 31st December, 2011
Liabilities
Amount
Rs
Assets
Amount
Rs
Capital Accounts:
Building
73,900
Gautam
75,000
Furniture
44,100
Virat
45,000
Stock
25,400
Reserve Fund
27,000
Debtors
33,600
Creditors
48,500
Cash
15,000
Bank Loan
11,500
Ashwin’s Capital
15,000
2,07,000
2,07,000

The firm was dissolved due to insolvency of Ashwin and the following was the result.

(i) The realisation of Assets were as follows:

a) The stock was completely damaged and could realise worth Rs 16,500 only.

b) Building was sold for Rs 49,800.

c) Furniture was realised by the firm at Rs 23,100 less than the book value.

d) A Customer who owes Rs 14,400 became insolvent and nothing could be recovered from his private estate.

(ii) Creditors were paid for Rs 36,900 in full settlement and Bank Loan was discharged fully.

(iii) The expenses of realisation Rs 4,100

(iv) Ashwin became insolvent and the firm could recover only Rs 4,000 from his private estate.

Prepare Realisation A/c, Partner’s Capital A/c and cash A/c to close the books of the firm.

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Solution

Realisation Account
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Sundry Assets:
Sundry Liabilities:
Building
73,900
Creditors
48,500
Furniture
44,100
Bank Loan
11,500
60,000
Stock
25,400
Debtors
33,600
1,77,000
Bank A/c:
Stock
16,500
Bank A/c:
Building
49,800
Creditors
36,900
Furniture
21,000
Bank Loan
11,500
Debtors
19,200
1,06,500
Realisation Expenses
4,100
52,500
Loss transferred to:
Gautam’s Capital A/c
21,000
Virat’s Capital A/c
21,000
Ashwin’s Capital A/c
21,000
63,000
2,29,500
2,29,500

Partners’ Capital Accounts
Dr.
Cr.
Particulars
Gautam
Virat
Ashwin
Particulars
Gautam
Virat
Ashwin
Balance b/d
15,000
Balanace b/d
75,000
45,000
Realisation A/c (Loss)
21,000
21,000
21,000
Reserve fund
9,000
9,000
9,000
Ashwin’s Capital A/c
11,500
11,500
Cash
4,000
Bank A/c
51,500
21,500
Gautam’s Capital A/c
11,500
Virat’s Capital A/c
11,500
84,000
54,000
36,000
84,000
54,000
36,000

Cash/Bank Account
Dr.
Cr.
Particulars
Amount
Rs
Particulars
Amount
Rs
Balance b/d
15,000
Realisation A/c (Liabilities)
52,500
Realisation A/c (Assets)
1,06,500
Capital A/cs:
Ashwin’s Capital A/c
4,000
Gautam
51,500
Virat
21,500
73,000
1,25,500
1,25,500

Working Notes:
Calculation of Capital Deficiency


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Q.

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 31st March, 2012 was as follows:

Balance Sheet as on 31st 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

Q.

PRACTICAL PROBLEMS

(When all partners become insolvent)

Shiv, Sadashiv and Sadanand are Partners in a firm sharing Profit and Losses equally whose Balance-sheet as on 31st December, 2011 stood as follows:

Balance Sheet as on 31st December, 2011
Liabilities
Amount
Rs
Assets
Amount
Rs
Capital Accounts
Sadanand’s Capital A/c
2,000
Shiv
6,000
Buildings
18,300
Sadashiv
4,000
Machinery
12,700
Parvati’s Loan
10,000
Debtors
9,100
Sundry Creditors
30,000
Bank
7,900
50,000
50,000

Shiv, Sadashiv and Sadanand were declared bankrupt and hence the firm was dissolved as on that date:

(i) The sundry Assets realised as follows:

Building Rs 10,900, Machinery Rs 8,200, Debtors Rs 6,800.

(ii) Realisation expenses amounted to Rs 1,300.

(iii) Sadanand was unable to contribute anything-

Whereas Rs 1,100 and Rs 900 were recovered from the realisation of private estate of Shiv and Sadashiv respectively.

You are required to close the books of the firm.

Q.

PRACTICAL PROBLEMS

Ganesh and Chandan were partners sharing profits and losses in the proportion of 3:2. They dissolve the partnership firm on 31st March, 2011 when their position was as follows:

Balance Sheet as on 31st March, 2011
Liabilities
Amount
Rs
Assets
Amount
Rs
Sundry Creditors
25,000
Debtors
1,12,500
Bank overdraft
20,000
Less: R.D.D.
12,500
1,00,000
Reserve Fund
30,000
Stock
2,25,000
Capital Accounts:
Furniture
50,000
Ganesh
2,30,000
Motor Car
75,000
Chandan
1,50,000
Cash in hand
5,000
4,55,000
4,55,000

The Assets realised as follows: Debtors Rs 90,000, Stock Rs 2,00,000, and Goodwill Rs 25,000, Motor Car was taken over by Ganesh for Rs 70,000 and Furniture by Chandan for Rs 60,000.
The Creditors were paid Rs 22,500 in full settlement. The expenses of realisation amounted to Rs 10,000.

Pass necessary journal entries in the books of the firm.

Q.

PRACTICAL PROBLEMS

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

Balance Sheet as on 31st 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 31st 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.

Q.

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 31st March, 2010 was as under:

Balance Sheet as on 31st 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

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