Question

X, Y and Z entered into a partnership and contributed Rs. 9,000; Rs. 6,000 and Rs. 3,000 respectively. They agreed to share profits and losses equally. The business lost heavily during the very first year and they decided to dissolve the firm. After realising all assets and paying off liabilities, there remained a cash balance of Rs. 6,000.
Prepare Realisation Account and Partners' Capital Accounts.

Answer 1

Realisation A/c

Particulars	Amount	Particulars	Amount
To Sundry Assets (working notes 2)	18000	By Cash A/c (assets realised)	6000
		By Loss (transferred to partner's capital a/c) X- 4000 Y- 4000 Z- 4000	12000
Total	18000	Total	18000

Partner's capital A/c

Particulars	X	Y	Z	Particulars	X	Y	Z
Realisation A/c	4000	4000	4000	Balance B/d	9000	6000	3000
Cash A/c	5000	2000		Cash A/c			1000
Total	9000	6000	4000	Total	9000	6000	4000

Working Notes: 1 Cash Account

Particulars	Amount	Particulars	Amount
To Realisation A/c	6000	By X's Capital A/c	5000
By Z's Capital A/c	1000	By Y's Capital A/c	2000
Total	7000	Total	7000

Working Notes: 2 Memorandum Balance Sheet

Liabilities	Amount	Assets	Amount
Capital A/cs: X - 9000 Y - 6000 Z - 3000	18000	Sundry Assets ( Balancing figure)	18000
Total	18000	Total	18000