Question

Question.21) Green and Black were partners in a business with a profit sharing of 3 : 2. They decided to dissolve the partnership on January ${31}^{st}$, 2011. On that date the assets (other than cash Rs. 3,000) of the firm realized Rs. 2,80,000. The liabilities and other particulars on that date of the firm were as follows:
Creditors Rs. 40,000; Outstanding Expenses Rs. 5,000; General Reserves Rs. 6,000; Green's capital Rs. 1,50,000; Black's capital Rs. 30,000. Expenses on realization were Rs. 3,000 paid by Mr. Black. Creditors were settled for Rs. 39,000.

Answer 1

Dear Student,

Realisation Account
Dr.						Cr.
Particulars			Amount Rs	Particulars			Amount Rs
To Other assets (WN-1)			2,28,000	By creditors A/c			40,000
To Bank A/c (WN-2)			39,000	By Outstanding expenses A/c			5,000
To Bank A/c (WN-3)			5,000	By Bank/Cash A/c			2,80,000
To Black's Capital			3000
To Partner's Capital A/c(WN-4) (B/f)
Green		30,000
Black		20,000	50,000
			3,25,000				3,25,000

Partners’ Capital Accounts
Dr.
Particulars		Green	Black	Particulars	Green	Black
To Bank A/c (B/F)		1,83,600	55,400	By Balance b/d	1,50,000	30,000
				By General Reserve A/c(WN 5)	3,600	2,400
				By Realisation A/c	30,000	20,000
				By Realisation A/c		3,000
		\1,83,600	55,400	\	1,83,600	55,400

WN 1-

Balance Sheet
Liabilities		Amount Rs	Assets	Amount Rs
Creditors		40,000	Cash	3,000
General Reserve		6,000
Capital Accounts			Other assets (B/F)	2,28,000
Green	1,50,000
Black	30,000	1,80,000
Outstanding expenses		5,000
		2,31,000		2,31,000

WN-2- Settlement of creditors
WN-3 Payment of outstanding expense
WN-4 B/F of realisation account distributed between Green and Black in 3:2 ratio.
WN-5 General reserve of 6,000 is distributed between Green and Balck in 3:2 ratio.

Regards