Question

Following is the Balance Sheet of Deepak and Jyoti, who were sharing profit and losses in the ratio of 3 : 2, as at March 31, 2024:

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Creditors		38,000	Cash		1,500
Mrs. Deepak’s Loan		10,000	Bank		10,000
Bank Loan		15,000	Debtors	20,000	19,000
Capital A/cs:		18,000	Less: Provision for Doubtful Debts	1,000
Deepak	10,000		Stock		12,000
Jyoti	8,000		Furniture		6,000
Current A/cs:		2,500	Plant		30,000
Deepak	2,000		P & L A/c (Dr. Balance)		5,000
Jyoti	500
		83,500			83,500

The firm was dissolved on that date and the following arrangements were made:

1. Assets realised as follows: Debtors ₹ 18,000; Furniture ₹ 5,500; Plant ₹ 32,000.
2. Deepak agreed to take over stock in full settlement of his wife’s loan.
3. Creditors were paid at 2% discount and Bank Loan was discharged along with interest due for six months @ 10% p.a. and
4. Expenses of realisation amounted to ₹ 1,800.

Show the necessary ledger accounts to close the books of the firm.

Hint: There will be no entry for the payment of Mrs. Deepak’s Loan.

Answer 1

Dr.	Realisation A/c				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Debtors A/c		20,000	By Provision for Doubtful Debts A/c		1,000
To Stock A/c		12,000	By Creditors A/c		38,000
To Furniture A/c		6,000	By Mrs. Deepak’s Loan		10,000
To Plant A/c		30,000	By Bank Loan A/c		15,000
To Bank A/c (Liabilities paid off):		54,790	By Bank A/c (Assets realised):		55,500
Creditors	37,240		Debtors	18,000
Bank loan	15,750		Furniture	5,500
Expenses of realisation	1,800		Plant	32,000
			By Loss on Realisation t/f to Capital A/c:		3,290
			Deepak	1,974
			Jyoti	1,316
		1,22,790			1,22,790

 

Dr.	Current A/c				Cr.
Particulars	Deepak	Jyoti	Particulars	Deepak	Jyoti
To Realisation A/c (Loss)	1,974	1,316	By Balance b/d	2,000	500
To P & L A/c (transfer of Dr. balance of P & L A/c)	3,000	2,000	By Capital A/c	2,974	2,816
	4,974	3,316		4,974	3,316

 

Dr.	Partner’s Capital A/c				Cr.
Particulars	Deepak	Jyoti	Particulars	Deepak	Jyoti
To Current A/c (Transfer from Current A/c)	2,974	2,816	By Balance b/d	10,000	8,000
To Bank A/c (Final Payment)	7,026	5,184
	10,000	8,000		10,000	8,000

 

Dr.	Bank A/c			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Balance b/d	10,000	By Realisation A/c:		54,790
To Cash A/c (Cash deposited into bank)	1,500	Creditors paid off	37,240
To Realisation A/c (Assets realised)	55,500	Bank loan paid off	15,750
		Expenses of realisation	1,800
		By Deepak’s Capital A/c		7,026
		By Jyoti’s Capital A/c		5,184
	67,000			67,000