Question

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2019
Liabilities		Amount (₹)	Assets	Amount (₹)
Creditors		38,000	Cash at Bank	11,500
Mrs. A's Loan		10,000	Stock	6,000
B's Loan		15,000	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, 2019 and both the partners agreed to the following:
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Mrs. A's Loan.
(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

Realisation Account

Dr.							Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
Stock			6,000	Creditors		38,000
Debtors			19,000	Mrs. A’s Loan		10,000
Furniture			4,000
Plant			28,000	A’s Capital A/c (Investments)		8,000
Investments			10,000	Bank A/c:
A’s Capital A/c (Mrs. A’s loan)			10,000	Stock	5,000
Bank A/c :				Debtors	18,500
Expenses		1,600		Furniture	4,500
Creditors		37,000	38,600	Plant	25,000	53,000
				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

 

Partners’ Capital Accounts

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

 

B’s Loan Account  

Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
			Balance b/d	15,000
Bank A/c		15,000
		15,000		15,000

 

Bank Account 

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