Question

Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2019, their Balance Sheet was:

Liabilities		Amount (₹)	Assets	Amount (₹)
Creditors		50,000	Cash	60,000
Bank Loan		35,000	Debtors	75,000
Employees' Provident Fund		15,000	Stock	40,000
Investments Fluctuation Reserve		10,000	Investments	20,000
Commission Received in Advance		8,000	Plant	50,000
Capital A/cs:			Profit and Loss A/c	3,000
Anju	50,000
Manju	50,000
Sanju	30,000	1,30,000
		2,48,000		2,48,000

   
On this date, the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
Anju realised the assets as follows: Debtors ₹ 60,000; Stock ₹ 35,500; Investments ₹ 16,000; Plant 90% of the book value. Expenses of Realisation amounted to ₹ 7,500. Commission received in advance was returned to customers after deducting ₹ 3,000.
Firm had to pay ₹ 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to ₹ 17,000. This liability was not provided for in the above Balance Sheet. ₹ 20,000 had to be paid for Employees' Provident Fund.
Prepare Realisation Account, Capital Accounts of Partners and Cash Account. 

Answer 1

Realisation Account

Dr.								Cr.
Particulars			Amount Rs	Particulars			Amount Rs
Debtors			75,000	Creditors			50,000
Stock			40,000	Bank Loan			35,000
Investments			20,000	Provident Fund			15,000
Plant			50,000	Commission Received in Advance			8,000
Cash A/c:				Investments Fluctuation Fund			10,000
Commision Received in Advance		5,000		Cash A/c:
Outstanding Salary		8,500		Debtors		60,000
Compensation paid to Employees		17,000		Stock		35,500
Provident Fund		20,000		Investments		16,000
Creditors		50,000		Plant		45,000	1,56,500
Bank Loan		35,000	1,35,500	Loss transferred to:
Anuj’s Capital A/c (Commission)			7,825	Anju’s Capital A/c	21,530
				Manju’s Capital A/c	21,530
				Sanju’s Capital A/c	10,765		53,825
			3,28,325				3,28,325

 

Partners’ Capital Accounts

Dr.									Cr.
Particulars		Anju	Manju	Sanju	Particulars	Anju	Manju	Sanju
Profit and Loss A/c		1,200	1,200	600	Balance b/d	50,000	50,000	30,000
Realisation A/c		21,530	21,530	10,765	Realisation A/c	7,825	–	–
Cash A/c		35,095	27,270	18,635
		57,825	50,000	30,000		57,825	50,000	30,000

 

Cash Account

Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Balance b/d		60,000	Realisation A/c	1,35,500
Realisation A/c		1,56,500	Anju’s Capital A/c	35,095
			Manju’s Capital A/c	27,270
			Sanju’s Capital A/c	18,635
		2,16,500		2,16,500

Working Notes:

WN 1

`"Anju's Commission" = "Assets Realised" xx 5/100`

                                   = `1,56,500 xx 5/100 = "Rs" 7,825`

WN2 

`"Realisation of Plant" = 50,000 xx 90/100 = "Rs" 45,000`