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

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Solution

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Assets:

Sundry Liabilities:

Plant and Machinery

20,000

Reserve for Doubtful Debts

1,000

Investments

8,000

Sundry Creditors

21,000

22,000

Stock

30,000

Debtors

18,000

76,000

Bank A/c:

Investments

5,000

Bank A/c

Stock

24,000

Creditors

21,000

Debtors

15,000

44,000

Realisation Expenses

1,000

22,000

X’s Capital A/c (Plant and Machinery)

20,000

Loss transferred to:

X’s Capital A/c

6,000

Y’s Capital A/c

3,600

Z’s Capital A/c

2,400

12,000

98,000

98,000

Partners’ Capital Accounts

Dr.

Cr.

Particulars

X

Y

Z

Particulars

X

Y

Z

Realisation A/c (Loss)

6,000

3,600

2,400

Balance b/d

20,000

10,000

4,000

Realisation A/c (Plant and Machinery)

20,000

Reserve Fund

10,000

6,000

4,000

Bank A/c

4,000

12,400

5,600

30,000

16,000

8,000

30,000

16,000

8,000

Bank Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

3,000

Realisation A/c (Liabilities)

22,000

Cash A/c

2,000

Capital A/cs:

Realisation A/c (Assets)

44,000

X

4,000

Y

12,400

Z

5,600

22,000

Y’s Loan A/c

5,000

49,000

49,000

Y’s Loan Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Bank A/c

5,000

Balance b/d

5,000

5,000

5,000

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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

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.

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.

Surjit and Rahi were sharing profits (losses) in the ratio 3 : 2, their Balance sheet as on March 31, 2012 is as follows
Balance Sheet of Surjit and Rahi
as on March 31, 2012
$\begin{matrix} Capital and Liabilities & Amt. & Assets & Amt. Creditors & 38, 000 & Bank & 11, 500 Mrs. Surjit loan & 10, 000 & Stock & 6, 000 Reserve & 15, 000 & Debtors & 19, 000 Rahi's Loan & 5, 000 & Furniture & 4, 000 Capitals: & Plant & 28, 000 Surjit & 10, 000 & Investment & 10, 000 Rahi & 8, 000 & Profit and loss & 7, 500 - ----- - & - ----- - 86, 000 & 86, 000 - ----- - & - ----- - \end{matrix}$
The firm was dissolved on March 31, 2012 on the following terms:
1. Surjit agreed to take the investments at Rs. 8,000 and to pay Mrs Surjit's loan.
2. Other assets were realised as follows
Stock Rs. 5,000
Debtors Rs. 18,500
Furniture Rs. 4,500
Plant Rs. 25,000
3. Expenses on realisation amounted to Rs. 1,600
4. Creditors agreed to accept Rs. 37,000 as a final settlement.

You are required to prepare realisation account partner's capital account and bank account.

PRACTICAL PROBLEMS

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

Balance Sheet as on 31^st 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.

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Y’s Loan Account
Dr.	Cr.
Particulars		Amount Rs	Particulars	Amount Rs

Bank A/c		5,000	Balance b/d	5,000
		5,000		5,000

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

Sundry Assets:				Sundry Liabilities:
Plant and Machinery		20,000		Reserve for Doubtful Debts	1,000
Investments		8,000		Sundry Creditors	21,000	22,000
Stock		30,000
Debtors		18,000	76,000	Bank A/c:
				Investments	5,000
Bank A/c				Stock	24,000
Creditors		21,000		Debtors	15,000	44,000
Realisation Expenses		1,000	22,000	X’s Capital A/c (Plant and Machinery)		20,000
				Loss transferred to:
				X’s Capital A/c	6,000
				Y’s Capital A/c	3,600
				Z’s Capital A/c	2,400	12,000
			98,000			98,000

Partners’ Capital Accounts
Dr.	Cr.
Particulars		X	Y	Z	Particulars	X	Y	Z

Realisation A/c (Loss)		6,000	3,600	2,400	Balance b/d	20,000	10,000	4,000
Realisation A/c (Plant and Machinery)		20,000			Reserve Fund	10,000	6,000	4,000
Bank A/c		4,000	12,400	5,600
		30,000	16,000	8,000		30,000	16,000	8,000

Bank Account
Dr.	Cr.
Particulars		Amount Rs	Particulars		Amount Rs

Balance b/d		3,000	Realisation A/c (Liabilities)		22,000
Cash A/c		2,000	Capital A/cs:
Realisation A/c (Assets)		44,000	X	4,000
			Y	12,400
			Z	5,600	22,000
			Y’s Loan A/c		5,000
		49,000			49,000