Question

Sanjay, Tarun and Vineet shared profit in the ratio of 3 : 2 : 1 on December 31, 2012 Their balance sheet was as follows:
$$\begin{array}{cccccccc}& & & & \text{Balance Sheet of Sanjay, Tarun and Vineet}& & & \\ & & & & \text{as on December 31 2013}& & & \end{array}$$
$$\begin{array}{ccccc}\text{Capital and Liabilities}& & \text{Amt.}& \text{Assets}& \text{Amt.}\\ \text{Capitals}& & & \text{Plant}& 90,000\\ \text{Sanjay}& 1,00,000& & \text{Debtors}& 60,000\\ \text{TArun}& 1,00,000& & \text{Furniture}& 32,000\\ \text{Vineet}& \underset{–}{70,000}& 2,70,000& \text{Stock}& 60,000\\ \text{Creditors}& & 80,000& \text{Investments}& 70,000\\ \text{Bank Payable}& & 30,000& \text{Bills Receivable}& 36,000\\ & & & \text{Cash in Hand}& 32,000\\ & & \underset{–}{}& & \underset{–}{}\\ & & 3,80,000& & 3,80,000\\ & & \underset{–}{}& & \underset{–}{}\end{array}$$
On this date, the firm was dissolved. Sanjay was appointed to realise the assets. Sanjay was to receive 6 % commission on the sale fo assets (except cash) and was to bear all expenses of realisation.
Sanjay realised the assets as follows:
Plant Rs. 72,000, Debtors Rs. 54,000, Furniture Rs. 18,000, Stock 90% of the book value. Investments Rs. 76,000 and biills receivable Rs. 31,000. Expenses of realisation amounted to 4,500. Prepare realisation account, capital account and cash account.

Answer 1

$$\begin{array}{cccccccc}\text{Dr.}& & & & \text{Realisation Account}& & & \text{Cr.}\end{array}$$
$$\begin{array}{cccccc}\text{Particulars}& & \text{Amt.}& \text{Particulars}& & \text{Amt.}\\ \text{Plant}& & 90,000& \text{Creditors}& & 8,000\\ \text{Debtors}& & 60,000& \text{Bills Payable}& & 30,000\\ \text{Furniture}& & 32,000& \text{Bills Payable}& & 30,000\\ \text{Stock}& & 60,000& \text{Plant}& 72,000& \\ \text{Investment}& & 70,000& \text{Debtors}& 54,000& \\ \text{Bills Receivable}& & 36,000& \text{Furniture}& 18,000& \\ \text{Cash}& & & \text{Stock}& 54,000& \\ \text{Creditors}& 80,000& & \text{Investments}& 76,000& \\ \text{Bills Payable}& \underset{–}{30,000}& 1,10,000& \text{Bills Receivable}& \underset{–}{31,000}& 3,05,000\\ \text{Sanjay's capital A/c}& & 18,300& \text{Loss Transferret to}& & \\ 6\%\text{Commission on 305000}& & & \text{Sanjay capital A/c}& 30,650& \\ & & & \text{Tarun's Capital A/c}& 20,433& \\ & & & \text{Vineet's Capital A/c}& \underset{–}{10,217}& 61,300\\ & & \underset{–}{}& & & \underset{–}{}\\ & & 4,76,300& & & 4,76,300\\ & & \underset{–}{}& & & \underset{–}{}\end{array}$$

$$\begin{array}{cccccccc}\text{Dr.}& & & & \text{Partners' Capital Account}& & & \text{Cr.}\end{array}$$

$$\begin{array}{cccccccc}\text{Particulars}& \text{Sanjay}& \text{Tarun}& \text{Vineet}& \text{Particulars}& \text{Sanjay}& \text{Tarun}& \text{Vineet}\\ \text{Realisation (Loss)}& 30,650& 20,433& 10,217& \text{Balance b/d}& 1,00,000& 1,00,000& 70,000\\ \text{Cash (Balancing Figure)}& 87,650& 79,567& 59,783& \text{Realisation (Commission)}& 18,300& -& -\\ & \underset{–}{}& \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}& \underset{–}{}\\ & 1,18,300& 1,00,000& 70,000& & 1,18,300& 1,00,000& 70,000\\ & \underset{–}{}& \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}& \underset{–}{}\end{array}$$

$$\begin{array}{cccccccc}\text{Dr.}& & & & \text{Cash Account}& & & \text{Cr.}\end{array}$$

$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{Balance b/d}& 32,000& \text{Realisation}& 1,10,000\\ \text{Realisation}& 3,05,000& \text{Sanjay's capital A/c}& 87,650\\ & & \text{Tarun's capital A/c}& 79,567\\ & & \text{Vineet's Capital A/c}& 59,783\\ & \underset{–}{}& & \underset{–}{}\\ & 3,37,000& & 3,37,000\\ & \underset{–}{}& & \underset{–}{}\end{array}$$

Note:
Nothing will be done for expenses on realisation Rs. 4,500 as the time has paid 6% commission to Sanjay for dissolution and Rs. 4,500 expenses will be paid by him personally.