Question

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 31st 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.

Answer 1

Realisation Account
Dr.	Cr.
Particulars			Amount Rs	Particulars		Amount Rs
Sundry Assets:				Sundry Liabilities- Sundry Creditors		10,000
Plant and Machinery		15,000
Stock		15,000		Bank A/c:
Sundry Debtors		22,000	52,000	Stock	14,000
				Plant and Machinery	12,000
Bank A/c (Sundry Creditors)			9,000	Bank	20,000	46,000
				Loss transferred to:
				Sunil’s Capital A/c	3,000
				Sumit’s Capital A/c	2,000	5,000
			61,000			61,000

Partners’ Capital Accounts
Dr.	Cr.
Particulars		Sushil	Sumit	Particulars	Sushil	Sumit
Realisation A/c (Loss)		3,000	2,000	Balance b/d	20,000	18,000
Bank A/c		20,000	18,000	General Reserve	3,000	2,000
		23,000	20,000		23,000	20,000

Sumit’s Loan Account
Dr.	Cr.
Particulars		Amount (Rs)	Particulars	Amount (Rs)
Bank A/c		2,000	Balance b/d	2,000
		2,000		2,000

Cash/Bank Account
Dr.	Cr.
Particulars		Amount Rs	Particulars		Amount Rs
Balance b/d		3,000	Realisation A/c (Liabilities)		9,000
Realisation A/c (Assets)		46,000	Loan A/c		2,000
			Capital A/cs:
			Sushil	20,000
			Sumit	18,000	38,000
		49,000			49,000