Question

A, B and C are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2019, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:

Liabilities		Amount (₹)	Assets	Amount ​(₹)
Creditors		40,000	Cash at Bank	3,000
Loan A/c:			Stock	50,000
A		10,000	Sundry Debtors	50,000
Workmen Compensation Reserve		21,000	Land and Building	57,000
Capital A/cs:			Profit and Loss A/c	15,000
A	60,000		Advertisement Suspense A/c	6,000
B	40,000
C	10,000	1,10,000
		1,81,000		1,81,000

   
During the course of realisation, a liability under a suit for damages is settled at ₹ 20,000 as against ₹ 5,000 only provided for in the books of the firm.
Land and Building were sold for ₹ 40,000 and the Stock and Sundry Debtors realised ₹ 30,000 and ₹ 42,000 respectively. The expenses of realisation amounted to ₹ 1,200.
There was a car in the firm, which was completely written off from the books. It was taken by A for ₹ 20,000. He also agreed to pay Outstanding Salary of ₹ 20,000 not provided in books.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Answer 1

Realisation Account

Dr.								Cr.
Particulars			Amount (₹)	Particulars			Amount (₹)
Land and Building			57,000	Creditors			40,000
Stock			50,000	Bank
Sundry Debtors			50,000	Land and building		40,000
				Stock		30,000
Bank A/c:				Sundry   Debtors		42,000	1,12,000
Creditors (40,000 + 15,000)		55,000
Expenses		1,200	56,200	Loss transferred to:
				A’s Capital A/c	30,600
				B’s Capital A/c	20,400
				C’s Capital A/c	10,200		61,200
			2,13,200				2,13,200

 

Partners’ Capital Accounts

	Partners’ Capital Accounts
	Dr.									Cr.
Particulars			A	B	C	Particulars	A	B	C
Profit and Loss A/c Advertisement Suspense A/c Realisation A/c (Loss)			7,500 3,000 30,600	5,000 2,000 20,400	2,500 1,000 10,200	Balance b/d Workmen Compensation Reserve A/c  ​   Bank A/c	60,000 10,500 ------	40,000 7,000 ------	10,000 3,500 200
Bank A/c			29,400	19,600	-------
			70,500	47,000	13,700		70,500	47,000	13,700

 

A’s Loan Account  

Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Bank A/c		10,000	Balance b/d	10,000
		10,000		10,000

 

Bank Account

Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Balance b/d		3,000	A’s Loan A/c Realisation A/c	10,000 56,200
Realisation A/c		1,12,000	A’s Capital A/c	29,400
C’s Capital A/c		200	B’s Capital A/c	19,600
		1,15,200		1,15,200