Question

Keshav and Pankaj were partners in a firm sharing profits and losses equally. They dissolved their firm on 31st March, 2026:

On this date, the Balance Sheet of the firm, apart from realisable assets and outside liabilities showed the following:

Keshav’s Capital	₹ 1,00,000 (Cr.)
Pankaj’s Capital	₹ 50,000 (Dr.)
Profit & Loss Account	₹ 25,000 (Dr.)
Keshav’s Loan to the Firm	₹ 37,500
General Reserve	₹ 17,500

On the date of dissolution of the firm:

1. Keshav’s loan was repaid by the firm along with interest of ₹ 1,250.
2. The dissolution expenses of ₹ 2,500 were paid by the firm on behalf of Keshav who had to bear these expenses.
3. An unrecorded asset of ₹ 5,000 was taken by Pankaj while Keshav discharged an unrecorded liability of ₹ 7,500.
4. The dissolution resulted in a loss of ₹ 1,50,000 from the realisation of assets and settlement of liabilities.

You are required to prepare:

1. Partners’ Capital Accounts
2. Keshav’s Loan Account

Answer 1

Dr.	Partners’ Capital Accounts				Cr.
Particulars	Keshav (₹)	Pankaj (₹)	Particulars	Keshav (₹)	Pankaj (₹)
To Balance b/d		50,000	By Balance b/d	1,00,000
To Profit & Loss A/c	12,500	12,500	By General Reserve A/c	8,750	8,750
To Bank A/c (Dissolution Exp paid by firm)	2,500		By Realisation A/c (Unrecorded liability)	7,500
To Realisation A/c (Unrecorded asset taken)		5,000	By Bank A/c (Cash brought in by Pankaj)		1,33,750
To Realisation A/c (Loss on Realisation)	75,000	75,000
To Bank A/c (Final Payment to Keshav)	26,250
	1,16,250	1,42,500		1,16,250	1,42,500

 

Dr.	Keshav’s Loan Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Bank A/c	38,750	By Balance b/d	37,500
		By Realisation A/c (Interest on Loan)	1,250
	38,750		38,750