Question

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2:2:1. On 31st March, 2017 their Balance Sheet was as follows:

BALANCE SHEET OF SRIJAN, RAMAN AND MANAN
as on 31-03-2017
$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(Rs\right)& & \left(Rs\right)\\ \text{Capitals :}& & \text{Capital :}& \\ \text{Srijan}2,00,000& & \text{Manan}& 10,000\\ \text{Raman}\underset{–}{1,50,000}& 3,50,000& \text{Plant}& 2,20,000\\ \text{Creditors}& 75,000& \text{Investments}& 70,000\\ \text{Bills payable}& 40,000& \text{Stock}& 50,000\\ \text{Outstanding Salary}& 35,000& \text{Debtors}& 60,000\\ & & \text{Bank}& 10,000\\ & & \text{Profit and Loss}& 80,000\\ \text{Total}& 5,00,000& \text{Total}& 5,00,000\end{array}$

On the above date they decided to dissolve the firm:

(i) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.

(ii) Assets were realised as follows : Plant Rs 85,000; Stock Rs 33,000; Debtors Rs 47,000.

(iii) Investments were realised at 95% of the book value.

(iv) The firm had to pay Rs 7,500 for an outstanding repair bill not provided for earlier.

(v) A contingent liability in respect of bills receivable, discounted with the bank has also materialised and had to be discharged for Rs 15,000.

(vi) Expenses of realisation amounting to Rs 3,000 were paid by Srijan.

Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

OR

Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 3:3:4. Their partnership deed provided for the following:

(i) Interest on capital @ 5% p.a.

(ii) Interest on drawing @12% p.a.

(iii) Interest on partner's loan @6% p.a.

Moli was allowed an annual salar of Rs 4,000. Bhola was allowed a commission of 10% of net profit as shown by Profit and Loss Account and Raj was guaranteed a profit of Rs 1,50,000 after making all the adjustments as provided in the partnership agreement.

Their fixed capital were Moli - Rs 5,00,000; Bhola : Rs 8,00,000 and Raj Rs 4,00,000. On 1st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31st March , 2017 before interest on Bhola's loan was Rs 3,06,000. Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year ended 31st March 2017, assuming that Bhola withdrew Rs 5,000 at the end of the end of each month, Moli withdrew Rs 10,000 at the end of each quarter and Raj withdrew Rs 40,000 at the end of each half year.

Answer 1

REALISATION ACCOUNT
Dr. Cr.
$\begin{array}{cccccc}\text{Particulars}& & \text{Amount}& \text{Particulars}& & \text{Amount}\\ & & \left(Rs\right)& & & \left(Rs\right)\\ \text{To Sundry Assets b/d}& & & \text{By Sundry Laibilities b/d}& & \\ \text{Plant}& 2,20,000& & \text{Creditors}& 75,000& \\ \text{Investment}& 70,000& & \text{Bills Payable}& 40,000& \\ \text{Stock}& 50,000& & \text{Outstanding Salary}& \underset{–}{35,000}& 1,50,000\\ \text{Debtors}& \underset{–}{60,000}& 4,00,000& \text{By Bank A/c}& & \\ \text{To Bank A/c}& & & \text{Plant}& 85,000& \\ \text{Creditors}& 75,000& & \text{Stock}& 33,000& \\ \text{Bills Payable}& 40,000& & \text{Debtors}& 47,000& \\ \text{Outstanting Expenses}& 7,500& & \text{Investments}& \underset{–}{66,500}& 2,31,500\\ \text{Contingent Liability}& 15,000& & \text{By Loss Transferred to}& & \\ \text{Outstanding Salary}& \underset{–}{35,000}& 1,72,000& \text{Capital A/c}& & \\ \text{To Srijan's Capital A/c}& & 11,575& \text{Srijan}& 81,030& \\ \text{(Commission)}& & & \text{Raman}& 81,030& \\ & & & \text{Mohan}& 40,515& 2,02,575\\ & \text{Total}& 5,84,075& & \text{Total}& 5,84,075\end{array}$

Dr. PARTNER'S CAPITAL ACCOUNT Cr.

$\begin{array}{cccccccc}\text{Particulars}& \text{Srijan}& \text{Raman}& \text{Manan}& \text{Particulars}& \text{Srijan}& \text{Raman}& \text{Manan}\\ & \left(Rs\right)& \left(Rs\right)& \left(Rs\right)& & \left(Rs\right)& \left(Rs\right)& \left(Rs\right)\\ \text{To Balance b/d}& -& -& 10,000& \text{By Balance b/d}& 2,00,000& 1,50,000& -\\ \text{To Profit and Loss}& & & & \text{By Realisation}& & & \\ \text{A/c}& 32,000& 32,000& 16,000& \text{A/c}& 11,575& -& -\\ \text{To Realisation A/c}& 81,030& 81,030& 40,515& \text{By Bank A/c}& -& -& 66,515\\ \text{(Loss)}& & & & & & & \\ \text{To Bank A/c}& 98,545& 36,970& -& & & & \\ \text{Total}& 2,11,575& 1,50,000& 66,515& \text{Total}& 2,11,575& 1,50,000& 66,515\end{array}$

Dr. BANK ACCOUNT Cr.
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \left(Rs\right)& & \left(Rs\right)\\ \text{To Balance b/d}& 10,000& \text{By Realisation A/c}& 1.72,500\\ \text{To Realisation A/c}& 2,31,500& \text{By Srijan's Capital A/c}& 98,545\\ \text{To Manan's Capital A/c}& 66,515& \text{By Raman's Capital A/c}& 36,970\\ \text{Total}& 3,08,015& \text{Total}& 3,08,015\end{array}$

OR

PROFIT AND LOSS APPROPRIATION ACCOUNT

for the year ended 31st March, 2017

Dr. Cr.
$\begin{array}{ccccccc}\text{Particulars}& & \text{Amount}& \text{Particulars}& & \text{Amount}& \\ & & \left(Rs\right)& & & \left(Rs\right)& \\ \text{To Interest on Capital:}& & & \text{By Profit and Loss A/c}& 3,06,000& & \\ \text{Moli Current A/c}& 25,000& & \text{(-) Interest on Loan (6,000)}& \underset{–}{6,000}& 3,00,000& \\ \text{Bhola Current A/c}& 40,000& & \text{By Interest on Drawing}& & & \\ \text{Raj Current A/c}& \underset{–}{20,000}& 85,000& \text{A/c}& & & \\ \text{To Salary}& & 4,000& \text{Moli Current A/c}& 1,800& & \\ \text{Moli's Current A/c}& & & \text{Bhola Current A/c}& 3,300& & \\ \text{To Commission A/c}& & & \text{Raj Current A/c}& \underset{–}{2,400}& 7,500& \\ \text{Bhola Current A/c}& & 30,000& & & & \\ \text{To Profit Transferred to}& & & & & & \\ \text{Current A/c}& & & & & & \\ \text{Moli's Current A/c}& 56,550& & & & & \\ \text{(-) Guarantee}& \underset{–}{(37,300)}& 19,250& & & & \\ \text{Bhola's Current A/c}& 56,550& & & & & \\ \text{(-) Guarantee}& \underset{–}{(37,300)}& 19,250& & & & \\ \text{Raj Current A/c}& 75,400& & & & & \\ \text{+ From Moli}& 37,300& & & & & \\ \text{+ From Bhola}& 37,300& 1,50,000& & & & \\ \text{Total}& & 3,07,500& \text{Total}& & 3,07,500& \end{array}$