Question

Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31 st March, 2012 was as under:

                                                               Balance Sheet as on

                                                                  31st March, 2012

Liabilities	Amount(Rs.)	Assets	Amount(Rs.)
Sundry Creditors	16000	Cash in hand	500
Capital A/c               Aaba               Baba	2000 2000	Stock	4500
		Debtors	4000
		Plant and machinery	5000
		Furniture	2000
		Land and Building	4000
	20000		20000

 

Due to weak financial position of the partners the firm is dissolved.

Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.

The assets are realised as follows :-

Stock Rs. 3,000, Plant and Machinery Rs. 3,000, Furniture Rs. 1,000, Land and Building Rs. 2,000 and Debtors Rs. 1,000 only.

Realisation expenses amounted to Rs. 500.

You are required to prepare necessary Ledger Accounts to close the books of the firm.

Answer 1

                                                                       In the Books of Aaba and Baba

                                                                                    Realisation A/c

Particulars	Amount	Amount	Particulars	Amount	Amount
To Sundry Assets Stock Debtors Plant and Machinery Furniture Land and Building	4500 4000 5000 2000 4000	19500	By Cash A/c Stock Debtors Plant and Machinery Furniture Land and Building	3000 1000 3000 1000 2000	10000
To Cash A/c (Realisation Expenses)		500	By Loss on Realisation Aaba Baba	5000 5000	10000
		20000			20000

 

                                                                              Partner's Capital A/c

Particulars	Aaba	Baba	Particulars	Aaba	Baba
To Realisation A/c (Loss)	5000	5000	By Balance b/d	2000	2000
			By Capital Deficiency A/c (Balancing fig.)	3000	3000
	5000	5000		5000	5000

 

                                                                                    Cash A/c

Particulars	Amount	Amount	Particulars	Amount	Amount
To Balance b/d		500	By Realisation Expenses A/c		500
To Realisation A/c		10000
			By Sundry Creditors		10000
		10500			10500

 

                                                     Sundry Creditors A/c

Particulars	Amount	Particulars	Amount
To Cash A/c	10000	By Balance b/d	16000
To Capital Deficiency A/c	6000
	16000		16000

 

                                                                              Capital Deficiency A/c

Particulars	Amount	Amount	Particulars	Amount	Amount
To Aaba's Capital A/c		3000	By Sundry Creditors		6000
To Baba's Capital A/c		3000
		6000			6000