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Standard XII
Accountancy
Realisation of Assets and Liabilities - Comprehensive
When loan amo...
Question

When loan amount is shown in the assets side of the balance sheet, the amount of loan will be transferred to ____________.


A

None of these

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B

Bank account

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C

Realisation account

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D

Partner`s capital account

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Solution

The correct option is D

Partner`s capital account


When loan amount is shown in the assets side of the balance sheet, the amount of loan will be transferred to Partner`s capital account.


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Q. Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March,2018 at which date their Balance Sheet stood as:

Liabilities

₹

Assets

₹

Capital A/cs:

Building

45,000

Bale

50,000

Machinery

15,000

Yale

40,000

90,000

Furniture

12,000

General Reserve

8,000

Debtors

8,000
Bale's Loan A/c 3,000 Stock 24,000
Creditors 14,000 Bank 11,000

1,15,000

1,15,000

​
(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,000.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account .
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account; (ii) Capital Accounts of Partners;
(iii) Bale's Loan Account; (iv) Bank Account.
Q. Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2019 at which date their Balance Sheet stood as:
Liabilities ₹ Assets ₹
Capital A/cs: Building 45,000
Bale 50,000 Machinery 15,000
Yale 40,000 90,000 Furniture 12,000
General Reserve 8,000 Debtors 8,000
Bale's Loan A/c 3,000 Stock 24,000
Creditors 14,000 Bank 11,000
1,15,000 1,15,000
​
(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,000.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account.
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account; (ii) Capital Accounts of Partners;
(iii) Bale's Loan Account; (iv) Bank Account.
Q.

Bora, Singh and Ibrahim were partners in a firm sharing profits in the ratio of 5 : 3 : 1. On 2-3-2015 their firm was dissolved. The assets were realized and the liabilities were paid oft Given below are the Realisation Account, Partners' Capital Accounts and Bank Account of the firm. the accountant of the firm left a few amounts unposted in these accounts. You are required to complete these accounts by posting the correct amounts.

Dr. REALISATION ACCOUNT Cr.
ParticularsAmount (Rs.)ParticularsAmount (Rs.)Stock10,000Provision for bad debts5,000Debtors25,000Sundry Creditors16,600Plant and Machinery40,000Bills Payable3,400Bank:Mortgage Loan15,000Sundry Creditors 16,000Bank (Assets realized)Bills Payable 3,400Stock 6,700Mortgage Loan 15,000––––––––34,400Debtors 12,500Bank (Outstanding repairs)400Plant & Machinery 36,000––––––––55,200Bank (Expenses)620Bank - unrecordedassets realized6,220..................¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,10,420––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯1,10,420––––––––––

Dr. CAPITAL ACCOUNTS Cr.
ParticularsBora (Rs.)Singh (Rs.)Ibrahim (Rs.)ParticularsBora (Rs.)Singh (Rs.)Ibrahim (Rs.)−−−−Balance b/d22,00018,00010,000−−−−General Reserve2,5001,500500¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯24,500––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯19,500––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯10,500––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯24,500––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯19,500––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯10,500––––––––

Dr. BANK ACCOUNT Cr.
ParticularsAmount (Rs.)ParticularsAmount (Rs.)Balance b/d19,500Realisation (Liabilities)34,400Realisation A/cRealisation A/c(Assets Realized)55,200(Unrecorded Liabilities)400...........................................................................................................................¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯80,920––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯80,920––––––––

Q. If a loan from a partner appears on the liabilities side of the Balance Sheet of the firm and the Capital Account of such partner shows a debit balance, how is loan dealt with?
Q.

Is the loan by a partner transferred to Realisation Account at the time of dissolution of a partnership firm? Why?

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