Question

Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decide to dissolve the firm on 31st March, 2019 at which date their Balance Sheet stood as:
 

Liabilities		Amount (₹)	Assets		Amount (₹)
Bank Loan		1,500	Trademarks		1,200
Creditors for Goods		8,000	Machinery		12,000
Bills Payable		500	Furniture		400
Capital A/cs:			Stock		6,000
Krishna	16,000		Debtors	9,000
Arjun	6,000	22,000	Less: Provision for Bad Debts	400	8,600
			Cash at Bank		2,800
			Advertisement Suspense		1,000
		32,000			32,000

The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks realised ₹ 800.
(d) Machinery and Stock-in-Trade were taken by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account. ​

Answer 1

Realisation Account

Dr.									Cr.
Particulars			Amount Rs	Particulars				Amount Rs
Trade Marks			1,200	Provision for Bad Debts				400
Machinery			12,000	Bank Loan				1,500
Furniture			400	Creditors for Goods				8,000
Stock			6,000	Bills Payable				500
Debtors			9,000
Bank A/c:				Bank A/c:
Bank Loan		1,500		Goodwill		1,000
Creditors		7,920		Debtors		8,100
Bills Payable		500		Trade Marks		800
Expense		800	10,720	Unrecorded Assets		200		10,100
				Krishna’s Capital A/c:
				Machinery	14,400
				Stock in Trade	3,600			18,000
				Loss transferred to:
				Krishna’s Capital A/c			656
				Arjun’s Capital A/c			164	820
			39,320					39,320

 

Partners’ Capital Accounts

Dr.							Cr.
Particulars		Krishna	Arjun	Particulars	Krishna	Arjun
Advertisement Suspense A/c		800	200	Balance b/d	16,000	6,000
Realisation A/c (Assets )		18,000	–
Realisation A/c (Loss)		656	164	Bank A/c	3,456	–
Bank A/c		–	5,636
		19,456	6,000		19,456	6,000

 

Bank Account

Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Balance b/d		2,800	Realisation A/c	10,720
Realisation A/c		10,100	Arjun’s Capital A/c	5,636
Krishna’s Capital A/c		3,456
		16,356		16,356