Question

P, Q and R are partners sharing profits and losses in the ratio of 3 : 3 : 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2018, the total capital of the firm and the balance of General Reserve are ₹ 80,000 and ₹ 20,000 respectively. During the year 2018-19, the firm made a profit of ₹ 28,000 before charging interest on capital @ 5%. The drawings of the partners are P___________₹ 8,000; Q___________₹ 7,000; and R__________₹ 5,000. On 31st March, 2019, their liabilities were ₹ 18,000.
On this date, they decided to dissolve the firm. The assets realised ₹ 1,08,600 and realisation expenses amounted to ₹ 1,800.
Prepare necessary Ledger Accounts to close the books of the firm.

Answer 1

Realistationn Account

Particulars			Amount (₹)	Particulars		Amount (₹)
Sundry Assets (WN 1)			1,26,000	Creditors		18,000
				Cash A/c (Assets Realised)		1,08,600
Cash A/c:				Loss transferred to:
Creditors		18,000		P’s Capital A/c	7,200
Expenses		1,800	19,800	Q’s Capital A/c	7,200
				R’s Capital A/c	4,800	19,200
			1,45,800			1,45,800

 

Partners’ Capital Accounts

Dr.									Cr.
Particulars		P	Q	R	Particulars	P	Q	R
Drawings A/c		8,000	7,000	5,000	Balance b/d	30,000	30,000	20,000
Realisation A/c (Loss)		7,200	7,200	4,800	Interest on Capital A/c	1,500	1,500	1,000
Cash A/c		32,800	33,800	22,200	P/L Appropriation A/c (WN 3)	9,000	9,000	6,000
					General Reserve	7,500	7,500	5,000
		48,000	48,000	32,000		48,000	48,000	32,000

 

Cash Account   

Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Realisation A/c		1,08,600	Realisation A/c	19,800
			P’s Capital A/c	32,800
			Q’s Capital A/c	33,800
			R’s Capital A/c	22,200
		1,08,600		1,08,600

Working Note:

WN 1

 

Memorandum Balance Sheet
as on 31st March, 2019

Liabilities		Amount (₹)	Assets	Amount (₹)
Capital A/cs:			Sundry Assets	1,26,000
P (WN 2)	22,000		(Balancing figure)
Q (WN 2)	23,000
R (WN 2)	15,000	60,000
General Reserve		20,000
Profit and Loss A/c		28,000
Creditors		18,000
		1,26,000		1,26,000

WN 2

 

Computatation of Partners' Capital after drawings as on 31st March, 2019

Dr.									Cr.
Particulars		P	Q	R	Particulars	P	Q	R
Drawings A/c		8,000	7,000	5,000	Balance b/d	30,000	30,000	20,000
Adjusted Capital		22,000	23,000	15,000
		30,000	30,000	20,000		30,000	30,000	20,000

WN 3

 

Profit and Loss Appropriation Account

for the year ending 31st March, 2019

Dr.						Cr.
Particulars			Amount (₹)	Particulars	Amount (₹)
Interest on Capital A/cs:				Profit and Loss A/c	28,000
P		1,500
Q		1,500
R		1,000	4,000
Profit transferred to:
P’s Capital A/c		9,000
Q’s Capital A/c		9,000
R’s Capital A/c		6,000	24,000
			28,000		28,000