Question

Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under.

Balance Sheets as on 31st March 2018.
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	28,800	Building	1,02,000
Bills Payable	21,600	Machinery	73,000
Capital A/c’s		Motor Car	1,67,600
Leela	2,27,160	Goodwill	45,600
Manda	1,44,000	Investment	62,400
Kunda	1,08,000	Debtors	30,600
		Stock	45,000
		Bank	3,360
	5,29,560		5,29,560

Leela agreed to take over the Building at ₹ 1,23,600. Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable. Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively. Investments were taken by Kunda at an agreed value of ₹ 55,440. Realisation expenses amounted to ₹ 6,800.

Pass necessary entries in the books of ‘Janki Stores.’

Answer 1

In the books of ‘Janki Stores’

Journal Entries
Date	Particulars		L. F.	Debit (₹)	Credit (₹)
1	Realisation A/c	Dr.		5,26,200
	To Building A/c				1,02,000
	To Machinery A/c				73,000
	To Motor Car A/c				1,67,600
	To Goodwill A/c				45,600
	To Investments A/c				62,400
	To Debtors A/c				30,600
	To Stock A/c				45,000
	(Being sundry assets transferred to Realisation A/c)
2	Creditors A/c	Dr.		28,800
	Bills Payable A/c	Dr.		21,600
	To Realisation A/c				50,400
	(Being sundry liabilities transferred to realisation A/c)
3	Bank A/c	Dr.		1,82,760
	To Realisation A/c				1,82,760
	(Being amount received for assets sold)
4	Realisation A/c	Dr.		6,800
	To Bank A/c				6,800
	(Being amount paid for realisation expense)
5	Leela’s Capital A/c	Dr.		1,23,600
	To Realisation A/c				1,23,600
	(Being Building taken over by Leela)
6	Manda’s Capital A/c	Dr.		1,21,200
	To Realisation A/c				1,21,200
	(Being Goodwill, Stock, Debtors taken over by Manda)
7	Kunda’s Capital A/c	Dr.		55,440
	To Realisation A/c				55,440
	(Being Investments taken over by Kunda)
8	Realisation A/c	Dr.		50,400
	To Manda’s Capital A/c				50,400
	(Being creditors and Bills payable amount paid by Manda)
9	Leela’s Capital A/c	Dr.		25,000
	Manda’s Capital A/c	Dr.		16,667
	Kunda’s Capital A/c	Dr.		8,333
	To Realisation A/c				50,000
	( Being loss of realisation transferred to Partners’ Capital A/c)
10	Leela’s Capital A/c	Dr.		78,560
	Manda’s Capital A/c	Dr.		56,533
	Kunda’s Capital A/c	Dr.		44,227
	To Bank A/c				1,79,320
	( Being final settlement made)
				1346120	1346120

Working Notes :

In the books of Leela, Manda and Kunda

Dr.	Realisation Account						Cr.
Particulars		Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c				By Sundry Liabilities A/c
Building		1,02,000		Creditors	28,800
Machinery		73,000		Bills Payable	21,600	50,400
Motor car		1,67,600		By Bank A/c
Goodwill		45,600		Motor Car	1,51,080
Investments		62,400		Machinery	31,680	1,82,760
Debtors		30,600		By Leela’s Capital A/c		1,23,600
Stock		45,000	5,26,200	Building
To Bank A/c				By Manda’s Capital A/c
Realisation Expense			6,800	Goodwill	45,600
To Manda’s Capital A/c				Stock	45,000
Creditors		28,800		Debtors	30,600	1,21,200
Bills Payable		21,600	50,400	By Kunda’s Capital A/c		55,440
				Investments
				By Partners’ Capital A/c (Loss on realisation transferred)
				Leela	25,000
				Manda	16,667
				Kunda	8,333	50,000
			5,83,400			5,83,400

 

 

Dr.	Partner's Capital Accounts						Cr.
Particulars	Leela (₹)	Manda (₹)	Kunda (₹)	Particulars	Leela (₹)	Manda (₹)	Kunda (₹)
To Realisation A/c (Building)	1,23,600	-	-	By Balance b/d	2,27,160	1,44,000	1,08,000
To Realisation A/c (Goodwill + Stock + Debtors)	-	1,21,200	-	By Realisation A/c	-	50,400	-
To Realisation A/c (Investments)	-	-	55,440
To Realisation A/c (Loss on Realisation)	25,000	16,667	8,333
To Bank A/c	78,560	56,533	44,227
	2,27,160	1,94,400	1,08,000		2,27,160	1,94,400	1,08,000

 

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	3,360	By Realisation Expense A/c	6,800
To Realisation A/c (Assets)	1,82,760	By Leela's Capital A/c	78,560
		By Manda's Capital A/c	56,533
		By Kunda's Capital A/c	44,227
	1,86,120		1,86,120