Question

X, Y and Z were in partnership sharing profits and losses in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm stood at 31st March, 2024, as under:

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		3,142	Cash in Hand	244
Provision for Depreciation on Machinery		4,000	Debtors	1,746
Capital Accounts:		22,426	Stock	3,498
X	3,582		100 Shares in B Co. Ltd.	2,000
Y	2,720		60 Shares in C Co. Ltd.	480
Z	16,124		Patents	7,600
			Machinery	6,000
			Buildings	5,000
			Goodwill	3,000
		29,568		29,568

On 31st March, 2024, it was decided to dissolve the firm on the following terms:

1. X is to take over the buildings at ₹ 7,300.
2. Y, who will continue with business, to take over Goodwill, Stock and Debtors at book values, Patents at ₹ 6,500 and Machinery at ₹ 1,500. He also agreed to pay the Creditors.
3. Z agreed to take the shares in C Co. Ltd. at ₹ 5 each.
4. The shares in B Co. Ltd. to be divided in profit sharing ratio.

Show the ledger accounts to record the dissolution.

Answer 1

Dr.	Realisation A/c				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Debtors A/c		1,746	By Creditors A/c		3,142
To Stock A/c		3,498	By Provision for Depreciation on Machinery A/c		4,000
To 100 Shares in B Co. Ltd. A/c		2,000	By X’s Capital A/c (Buildings taken over)		7,300
To 60 Shares in B Co. Ltd.  A/c		480	By Y’s Capital A/c  (Assets taken over):		16,244
To Patents A/c		7,600	Goodwill	3,000
To Machinery A/c		6,000	Stock	3,498
To Buildings A/c		5,000	Debtors	1,746
To Goodwill A/c		3,000	Patents	6,500
To Y’s Capital A/c (Creditors taken over)		3,142	Machinery	1,500
To Profit on Realisation t/f to Capital A/c:		520	By Z’s Capital A/c (shares)		300
X	364		By X’s Capital A/c (shares)		1,400
Y	104		By Y’s Capital A/c (shares)		400
Z	52		By Z’s Capital A/c (shares)		200
		32,986			32,986

 

Dr.	Partner’s Capital A/c						Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
To Realisation A/c (Assets taken over)	7,300	16,244	-	By Balance b/d	3,582	2,720	16,124
To Realisation A/c - (Shares taken over)	-	-	300	By Realisation A/c (Creditors paid)	-	3,142	-
To Realisation A/c - (Shares taken over)	1,400	400	200	By Realisation A/c - Profit	364	104	52
To Cash A/c (Final Payment)	-	-	15,676	By Cash A/c (Amount brought in)	4,754	10,678	-
	8,700	16,644	16,176		8,700	16,644	16,176

 

Dr.	Cash A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	244	By Z’s Capital A/c	15,676
To X’s Capital A/c	4,754
To Y’s Capital A/c	10,678
	15,676		15,676