Question

The following is the balance sheet of Tanu and Manu, who shares profit and losses in the ratio of 5:3. On December 31, 2012
$$\begin{array}{cccccccc}& & & & \text{Balance Sheet of Tanu and Manu}& & & \\ & & & & \text{as on December 31, 2012}& & & \end{array}$$

$$\begin{array}{ccccc}\text{Capital and Liabilities}& & \text{Amt. (Rs.)}& \text{Assets}& \text{Amt. (Rs.)}\\ \text{Sundry Creditors}& & 62,000& \text{Cash at Bank}& 16,000\\ \text{Bills Payable}& & 32,000& \text{Sundry Debtors}& 55,000\\ \text{Bank Loan}& & 50,000& \text{Stock}& 75,000\\ \text{Reserve Fund}& & 16,000& \text{Motor Car}& 90,000\\ \text{Capitals:}& & & \text{Machinery}& 45,000\\ \text{Tanu}& 1,10,000& & \text{Investment}& 70,000\\ \text{Manu}& \underset{–}{90,000}& \underset{–}{2,00,000}& \text{Fixtures}& \underset{–}{9,000}\\ & & 3,60,000& & 3,60,000\end{array}$$
On the above date, the firm is dissolved and the following agreement was made, Tanu agree to pay the bank loan and took away the sundry debtors. Sundry creditors accepts stock and paid Rs. 10,000 to the firm. machinery is taken over by Manu for Rs. 40,000 and agreed to pay of bills payable at a discount of 5%. Motor Car was taken over by Tanu for Rs. 60,000, Investment realised Rs. 76,000 and fixtures Rs. 4,000.
The expenses of dissolution amounted to Rs. 2,200.
Prepare realisation account, bank account and partners' capital account.

Answer 1

$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Realisation Account}& & & \text{Cr}\end{array}$$
$$\begin{array}{ccccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& & \text{Amt.}\\ \text{Sundry Debtors}& 55,000& \text{Sundry Creditors}& & 62,000\\ \text{Stock}& \text{75,000}& \text{Bills Payable}& & 32,000\\ \text{Motor Car}& 90,000& \text{Bank Loan}& & 50,000\\ \text{Machinery}& 45,000& \text{Tanu's Capital A/c}& & \\ \text{Investment}& 70,000& \text{Sundry Debtors}& 55,000& \\ \text{Fixtures}& 9,000& \text{Motor Car}& \underset{–}{60,000}& 1,15,000\\ \text{Manu's Capital A/c (Bills Payable)}& 30,400& \text{Bank}& & \\ \text{Bank (Expenses)}& 2,200& \text{Stock (paid by creditors)}& 10,000& \\ \text{Tanu's Capital A/c (Bank Loan)}& 50,000& \text{Investment}& 76,000& \\ & & \text{Fixture}& \underset{–}{4,000}& 90,000\\ & & \text{Manu's Capital (Machinery)}& & 40,000\\ & & \text{Loss transferred to}& & \\ & & \text{Tanu's Capital A/c}& 23,500& \\ & & \text{Manu's Capital A/c}& \underset{–}{14,100}& \text{37,600}\\ & \overline{\underset{–}{4,26,600}}& & & \overline{\underset{–}{4,26,600}}\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Partners' Capital Account}& & & \text{Cr}\end{array}$$
$$\begin{array}{cccccc}\text{Particulars}& \text{Tanu}& \text{Manu}& \text{Particulars}& \text{Tanu}& \text{Manu}\\ \text{Realisation (Assets Taken)}& 1,15,000& 40,000& \text{Balance b/d}& 1,10,000& 90,000\\ \text{Realisation (Loss)}& 23,500& 14,100& \text{Realisation (Liabilities)}& 50,000& 30,400\\ \text{Bank (Balancing Figure)}& 31,500& 72,300& \text{Realisation Fund}& 10,000& 6,000\\ & \underset{–}{}& \underset{–}{}& & \underset{–}{}& \underset{–}{}\\ & 1,70,000& 1,26,400& & 1,70,000& 1,26,400\end{array}$$
$$\begin{array}{cccccccc}\text{Dr}& & & & \text{Bank Account}& & & \text{Cr}\end{array}$$
$$\begin{array}{cccc}\text{Particulars}& \text{Amt.}& \text{Particulars}& \text{Amt.}\\ \text{Balance b/d}& 16,000& \text{Realisation A/c}& 2,200\\ \text{Realisation (Assets)}& 90,000& \text{Tanu's Capital A/c}& 31,500\\ & & \text{Manu's Capital A/c}& 72,300\\ & \underset{–}{}& & \underset{–}{}\\ & 1,06,000& & 1,06,000\end{array}$$

Working Note:
Creditors took over stock and paid Rs. 10,000 in full settlement. No effect will be shown for creditors and stock related to realisation and payment. Only Rs. 10,000 paid by creditors will be taken in receipt against settlement.