Question

Bale and Yale are equal partners of a firm, the Balance Sheet of which is given below as at 31.3.2024, the date on which they decide to dissolve the firm.

Balance sheet as at 31.3.2024.
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capital Accounts:		90,000	Building	45,000
Bale	50,000		Machinery	15,000
Yale	40,000		Furniture	12,000
General Reserve		8,000	Debtors	8,000
Bale’s Loan		3,000	Stock	24,000
Creditors		14,000	Bank	11,000
		1,15,000		1,15,000

1. The assets realised were as follows:
   Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 6,000.
2. Bale agreed to accept ₹ 2,500 in full settlement of his loan account.
3. Yale took over the furniture at ₹ 9,000.
4. Dissolution expenses amounted to ₹ 2,500.

Prepare:

1. Realisation Account
2. Capital Accounts of Partners
3. Bale’s Loan Account
4. Bank Account

Hints:

1. Building will be realised at book value.
2. Entry for payment of Bale’s Loan will be:
   

   Bale’s Loan A/c    ...Dr.	3,000	-
   To Bank A/c	-	2,500
   To Realisation A/c	-	500

Answer 1

Dr.	Realisation A/c			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c/:		By Creditors A/c		14,000
Building	45,000	By Bank A/c (Asset realised)		80,500
Machinery	15,000	Stock	22,000
Furniture	12,000	Debtors	7,500
Debtors	8,000	Machinery	16,000
Stock	24,000	Building	35,000
To Bank A/c (Creditors paid off)	14,000	By Yale’s Capital A/c (Furniture taken over)		9,000
To Bank A/c (Realisation expenses)	2,500	By Bale’s Loan A/c		500
		By Loss on Realisation t/f to Capital A/c:		16,500
		Bale	8,250
		Yale	8,250
	1,20,500			1,20,500

 

Dr.	Partner’s Capital A/c				Cr.
Particulars	Bale	Yale	Particulars	Bale	Yale
To Realisation A/c (Loss)	8,250	8,250	By Balance b/d	50,000	40,000
To Realisation A/c (Furniture taken over)	-	9,000	By General Reserve A/c	4,000	4,000
To Bank A/c (Final Payment)	45,750	26,750
	54,000	44,000		54,000	44,000

 

Dr.	Bale’s Loan A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank A/c	2,500	By Balance b/d	3,000
To Realisation A/c	500
	3,000		3,000

 

Dr.	Bank A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	11,000	By Bale’s Loan A/c	2,500
To Realisation A/c (Asset realised)	80,500	By Realisation A/c (Loss)	16,500
		By Bale’s Capital A/c	47,750
		By Yale’s Capital A/c	26,750
	91,500		91,500