Question

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
$$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amt.}& \text{Assets}& \text{Amt.}\\ \text{Creditors}& 38,000& \text{Bank}& 11,500\\ \text{Mrs. Surjit loan}& 10,000& \text{Stock}& 6,000\\ \text{Reserve}& 15,000& \text{Debtors}& 19,000\\ \text{Rahi's Loan}& 5,000& \text{Furniture}& 4,000\\ \text{Capitals:}& & \text{Plant}& 28,000\\ \text{Surjit}& 10,000& \text{Investment}& 10,000\\ \text{Rahi}& 8,000& \text{Profit and loss}& 7,500\\ & \underset{–}{}& & \underset{–}{}\\ & 86,000& & 86,000\\ & \underset{–}{}& & \underset{–}{}\end{array}$$
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.

Answer 1

Dr. Realisation Account Cr.
$$\begin{array}{cccccc}\text{Particulars}& & \text{Amt.}& \text{Particulars}& & \text{Amt.}\\ \text{Stock}& & 6,000& \text{Creditors}& & 38,000\\ \text{Debtors}& & 19,000& \text{Mrs. Surjit's Loan}& & 10,000\\ \text{Furniture}& & 4,000& \text{Surjit's Capital A/c}& & 8,000\\ & & & \text{(Investment)}& & \\ \text{Plant}& & 28,000& \text{Bank A/c:}& & \\ \text{Investment}& & 10,000& \text{Stock}& 5,000& \\ \text{Surjit's Capital A/c}& & 10,000& \text{Debtors}& 18,500& \\ \text{(Mrs. Surjit's Loan)}& & & \text{Furniture}& 4,500& \\ \text{Bank A/c :}& & & \text{Plant}& \underset{–}{25,000}& 53,000\\ \text{Expenses}& 1,600& & \text{Loss Transferred to}& & \\ \text{Creditors}& \underset{–}{37,000}& 38,600& \text{Surjit's Capital A/c}& 39,60& \\ & & & \text{Rahi's Capital A/c}& \underset{–}{2,640}& 6,600\\ & & \underset{–}{}& & & \underset{–}{}\\ & & 1,15,600& & & 1,15,600\\ & & \underset{–}{}& & & \underset{–}{}\end{array}$$

Dr. Partner's Capital Account Cr.
$$\begin{array}{cccccc}\text{Particulars}& \text{Surjit}& \text{Rahi}& \text{Particulars}& \text{Surjit}& \text{Rahi}\\ \text{Realisation (Investment)}& 8,000& -& \text{Balance b/d}& 10,000& 8,000\\ \text{Realisation (Loss)}& 3,960& 2,640& \text{Realisation (Mrs. Surjit Loan)}& 10,000& \\ \text{Profit and Loss}& 4,500& 3,000& & & \\ \text{Bank (Balancing figure)}& 12,540& 8,360& \text{Reserve}& 9,000& 6,000\\ & \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}\\ & 29,000& 14,000& & 29,000& 14,000\\ & \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}\end{array}$$
Dr. Rahi's Loan Account Cr
$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{Bank A/c}& 5,000& \text{Balance b/d}& 5,000\\ & \underset{–}{}& & \underset{–}{}\\ & 5,000& & 5,000\\ & \underset{–}{}& & \underset{–}{}\end{array}$$
Dr. Bank Account Cr.
$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{Balance b/d}& 11,500& \text{Realisation (Creditors and Expenses)}& 38,600\\ \text{Realisation A/c (Assets Realised)}& 53,000& \text{Rahi's Loan}& 5,000\\ & & \text{Surjit's Capital A/c}& 12,540\\ & & \text{Rahi's Capital A/c}& 8,360\\ & \underset{–}{}& & \underset{–}{}\\ & 64,500& & 64,500\\ & \underset{–}{}& & \underset{–}{}\end{array}$$