Question

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2026, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Sundry Creditors		38,000	Cash at Bank	11,500
Loan by Mrs. A		10,000	Stock	6,000
Loan by B		15,000	Sundry Debtors	19,000
Reserve		5,000	Furniture	4,000
A's Capital	10,000		Plant	28,000
B's Capital	8,000	18,000	Investments	10,000
			Profit and LossA/C	7,500
		86,000		86,000

The firm was dissolved on 31st March, 2026 and both the partners agreed to the following:
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Loan by Mrs.A..
(b) Other assets realised as: Stock − ₹ 5,000; Debtors  − ₹ 18,500; Furniture  − ₹ 4,500; Plant  − ₹ 25,000.
(c) Expenses of realisation came to ₹ 1,600.
(d) Creditors agreed to accept ₹ 37,000 in full settlement of their claims.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Answer 1

Dr.	Realisation Account						Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
To Stock			6,000	By Sundry Creditors		38,000
To Sundry Debtors			19,000	By Loan by Mrs.A.		10,000
To Furniture			4,000
To Plant			28,000	By A’s Capital A/c (Investments)		8,000
To Investments			10,000	By Bank A/c:
To A’s Capital A/c (Loan by Mrs.A.)			10,000	Stock	5,000
To Bank A/c :				Sundry Debtors	18,500
Expenses		1,600		Furniture	4,500
Sundry Creditors		37,000	38,600	Plant	25,000	53,000
				By Loss transferred to:
				A’s Capital A/c	3,960
				B’s Capital A/c	2,640	6,600
			1,15,600			1,15,600

 

Dr.	Partners’ Capital Accounts						Cr.
Particulars		A	B	Particulars	A	B
To Realisation (loss)		3,960	2,640	By Balance b/d	10,000	8,000
To Realisation A/c		8,000	–	By Reserve A/c	3,000	2,000
To Profit and Loss A/c		4,500	3,000	By Realisation A/c	10,000	–
To Bank A/c		6,540	4,360
		23,000	10,000		23,000	10,000

 

Dr.	B’s Loan Account				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Bank A/c		15,000	By Balance b/d	15,000
		15,000		15,000

 

Dr.	Bank Account				Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
To Balance b/d		11,500	By Realisation A/c	38,600
To Realisation A/c		53,000	By A’s Capital A/c	6,540
			By B’s Capital A/c	4,360
			By B’s Loan A/c	15,000
		64,500		64,500