Question

A, B and C are in partnership sharing in 4 : 3 : 3. They decided to dissolve the partnership firm. At the date of dissolution their creditors amounted to ₹ 16,800 and in the course of dissolution a contingent liability of ₹ 3,500 not brought into the accounts matured and had to be met. Their capitals stood at ₹ 12,000, ₹ 10,000 and ₹ 8,000 respectively. B had lent to the firm in addition to Capital ₹ 13,200. The assets realised ₹ 45,670.

Prepare the Realisation Account and partner’s Capital Accounts. Also show the Bank Account.

Answer 1

Dr.	Realisation A/c			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets	60,000	By Creditors		16,800
To Bank A/c (Creditors)	16,800	By Bank A/c		45,670
To Bank A/c (contingent liability)	3,500	By Loss on Realisation t/f to Capital A/c:		17,830
		A	7,132
		B	5,349
		C	5,349
	80,300			80,300

 

Dr.	Partner’s Capital A/c						Cr.
Particulars	A	B	C	Particulars	A	B	C
To Realisation A/c (Loss)	7,132	5,349	5,349	By Balance b/d	12,000	10,000	8,000
To Bank A/c	4,868	4,651	2,651
	12,000	10,000	8,000		12,000	10,000	8,000

 

Dr.	Bank A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	-	By Realisation A/c (Creditors)	16,800
To Realisation A/c (Sundry Assets realised)	45,670	By Realisation A/c (contingent liability)	3,500
		By A’s Capital A/c	4,868
		By B’s Capital A/c	4,651
		By C’s Capital A/c	2,651
		By B’s Loan A/c	13,200
	45,670		45,670

Working note:

Balance sheet
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capitals:		30,000	By Sundry Assets (Balancing figure)	60,000
A	12,000
B	10,000
C	8,000
B Loan		13,200
Creditors		16,800
		60,000		60,000