The partnership between A and B was dissolved on 31st March, 2018. On that date the respective credits to the capitals were A - Rs. 1,70,000 and B - Rs. 30,000. Rs. 20,000 were owed by B to the firm; $R s .$ 1,00,000 were owed by the firm to A and Rs. 2,00,000 were due to the Trade Creditors. Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B.
The assets represented by the above stated net liabilities realised Rs. 4,50,000 exclusive of Rs. 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners' Capital Accounts and Cash Account showing the distribution to the partners.

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Solution

Realisation Account
Particulars Amount Particulars Amount
To Sundry Assets A/c
(Working Notes) 480000 By Trade Creditors 200000
To B's Loan 20000 By Cash A/c
(assets realised) 450000
To Cash A/c
(creditors paid) 200000 By B's Capital A/c
(B's Loan) 20000
By loss
(transferred to partner's
capital a/c
A- 20000
B- 10000 30000
Total 700000 Total 700000
Capital A/c
Particulars A B Particulars A B
To Realisation A/c
(loan) 20000 By Balance b/d 170000 30000
To Realisation A/c
(loss) 20000 10000
To Cash A/c 150000
Total 170000 30000 Total 170000 30000
Cash Account
Particulars Amount Particulars Amount
To Realization A/c
(Assets) 450000 By Realization A/c
(Creditors) 200000
By A's Capital A/c 150000
By A's loan A/c 100000
Total 450000 Total 450000
Working Notes: 1 Memorandum Balance Sheet
Liabilities Amount Assets Amount
Capital
A- 170000
B- 30000 200000 B's Loan 20000
A's Loan 100000 Sundry Assets
(balancing figure) 480000
Trade Creditors 200000
Total 500000 Total 500000

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Similar questions

Q. The partnership between A and B was dissolved on 31st March, 2018. On that date the respective credits to the capitals were A

—

₹ 1,70,000 and B

—

₹ 30,000 . ₹ 20,000 were owed by B to the firm; ₹ 1,00,000 were owed by the firm to A and ₹ 2,00,000 were due to the Trade Creditors . Profits and losses were shared in the proportions of 2/3 to A , 1/3 to B .
The assets represented by the above stated net liabilities realise ₹ 4,50,000 exclusive of ₹ 20,000 owed by B . The liabilities were settled at book figures . Prepare Realisation Account , Partners' Capital Accounts and Cash Account showing the distribution to the partners .

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A and B were partners in a business sharing profits and losses in the ratio of 3 : 1, They decided to dissolve the partnership on March 31, 2015. On that date, their Capitals stood at Rs 1,00,000 and Rs 50,000 respectively. Amount owing by A to the firm was Rs 42,000 and the amount owed by the firm to B was Rs 15,000; Creditors were Rs 25,000 and Cash Rs 5,000. The assets other than the amount owing by A to the firm realised Rs 64,000. The expenses of realisation amounted to Rs 1,000.

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PRACTICAL PROBLEMS

Anil and Sunil were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as on 31^st March, 2009.

Balance Sheet as on 31^st March, 2009
Liabilities	Amount Rs	Assets	Amount Rs
Capital Account		Bank	30,000
Anil	50,000	Stock	25,000
Sunil	30,000	Debtors	70,000
Current Account		Plant	45,000
Anil	15,000	Building	35,000
Sunil	10,000
Creditors	87,000
Bills payable	13,000
	2,05,000		2,05,000

The firm was dissolved on the above date and the assets realised as under:

1) Stock Rs 20,000, Debtors Rs 60,000, Plant Rs 40,000 and Building Rs 30,000.

2) Anil agreed to pay off the bills payable.

3) Creditors were paid in full.

4) Dissolution expenses were Rs 7,000.

Prepare:

(i) Realisation Account

(ii) Bank Account

(iii) Current Account and Capital Account of the partners.

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Particulars	Amount	Particulars	Amount
To Sundry Assets A/c (Working Notes)	480000	By Trade Creditors	200000
To B's Loan	20000	By Cash A/c (assets realised)	450000
To Cash A/c (creditors paid)	200000	By B's Capital A/c (B's Loan)	20000
		By loss (transferred to partner's capital a/c A- 20000 B- 10000	30000
Total	700000	Total	700000

Particulars	A	B	Particulars	A	B
To Realisation A/c (loan)		20000	By Balance b/d	170000	30000
To Realisation A/c (loss)	20000	10000
To Cash A/c	150000
Total	170000	30000	Total	170000	30000