Question

A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. They decided to dissolve their firm on 31st March, 2019 when the Balance Sheet was:
 

Liabilities		Amount (₹)	Assets		Amount (₹)
Creditors		40,000	Cash		40,000
Bills Payable		46,000	Debtors	70,000
Employees’ Provident Fund		32,000	Less: Provision for Doubtful Debts	6,000	64,000
Mrs. A’s Loan		38,000	Stock		50,000
C’s Loan		30,000	Investments		60,000
Investments Fluctuation Reserve		16,000	Furniture		42,000
Capitals A/cs:			Machinery		1,36,000
A	1,20,000		Land		1,00,000
B	1,00,000		Goodwill		30,000
C	1,00,000	3,20,000
		5,22,000			5,22,000

Following transactions took place:
(a) A took over Stock at ₹ 36,000. He also took over his wife's loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value. Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.

Answer 1

Realisation Account

Dr.		Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Debtors	70,000	Provision for Doubtful Debts		6,000
Stock	50,000	Creditors		40,000
Investments	60,000	Bills Payable		46,000
Furniture	42,000	Employee’s Provident Fund		32,000
Machinery	1,36,000	Investment Fluctuation Fund		16,000
Land	1,00,000	Mrs. A’s Loan		38,000
Goodwill	30,000	A’s Capital A/c (Stock)		36,000
A’s Capital A/c (Mrs.A’s Loan)	38,000	B’s Capital A/c (Debtors)		28,000
C’s Capital A/c (Creditors)	20,000	C’s Capital A/c (Investments)		54,000
Cash A/c (Expenses)	4,000	Cash A/c (Debtors) 60% × 35,000		21,000
Cash A/c (Creditors)	20,000	Cash A/c (Furniture)		30,000
Cash A/c (Bills Payable)	46,000	Cash A/c (Machinery)		82,000
Cash A/c (Employees’ Provident Fund)	32,000	Cash A/c (Land)		1,20,000
		Cash A/c (Unrecorded Assets)		22,000
		Loss on Revaluation transferred to:
		A	30,800
		B	30,800
		C	15,400	77,000
	6,48,000			6,48,000

 

Partners’ Capital Account

Dr.				Cr.
Particulars	A	B	C	Particulars	A	B	C
Realisation A/c (Stock)	36,000	-	-	Balance b/d	1,20,000	1,00,000	1,00,000
Realisation A/c (Debtors)	-	28,000	-	Realisation A/c (Mrs.A’s Loan)	38,000	-	-
Realisation A/c (Investments)	-	-	54,000	Realisation A/c (Creditors)	-	-	20,000
Realisation A/c (Loss)	30,800	30,800	15,400
Cash A/c	91,200	41,200	50,600
	1,58,000	1,00,000	1,20,000		1,58,000	1,00,000	1,20,000

 

C’s Loan A/c

Dr.		Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Cash A/c	30,000	Balance b/d	30,000
	30,000		30,000

 

Cash A/c

Dr.		Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Balance b/d	40,000	Realisation A/c (Creditors)	20,000
Realisation A/c (Debtors)	21,000	Realisation A/c (Expenses)	4,000
Realisation A/c (Furniture)	30,000	Realisation A/c (Bills Payable)	46,000
Realisation A/c (Machinery)	82,000	Realisation A/c (Employees’ Provident Fund)	32,000
Realisation A/c (Land)	1,20,000	C’s Loan A/c	30,000
Realisation A/c (Unrecorded Assets)	22,000	A’s Capital A/c	91,200
		B’s Capital A/c	41,200
		C’s Capital A/c	50,600
	3,15,000		3,15,000