Question

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st March, 2017 their Balance Sheet was as follows:

Balance Sheet of Srijan, Raman and Manan as at 31-3-2017
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capitals:		3,50,000	Capital: Manan	10,000
Srijan	2,00,000		Plant	2,20,000
Raman	1,50,000		Investments	70,000
Creditors		75,000	Stock	40,000
Bills Payable		40,000	Debtors	60,000
Outstanding Salary		35,000	Accrued Interest	7,000
			Prepaid Expenses	3,000
			Bank	10,000
			Profit and Loss Account	80,000
		5,00,000		5,00,000

On the above date they decided to dissolve the firm.

1. Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.
2. Assets were realised as follows:
   

   	(₹)
   Plant	85,000
   Stock	33,000
   Debtors	47,000

3. Investments were realised at 95% of the book value and Accrued Interest Nil.
4. The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
5. A contingent liability in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for ₹ 15,000.
6. Expenses of realisation amounting to ₹ 3,000 were paid by Srijan.

Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.

Answer 1

Dr.	Realisation A/c				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Plant A/c		2,20,000	By Creditors A/c		75,000
To Investments A/c		70,000	By Bills Payable A/c		40,000
To Stock A/c		40,000	By Outstanding Salary A/c		35,000
To Accrued Interest A/c		7,000	By Bank A/c: (Asset realised)		2,31,500
To Prepaid Expenses A/c		3,000	Plant	85,000
To Debtors A/c		60,000	Stock	33,000
To Bank A/c:			Debtors	47,000
Creditors	75,000	1,50,000	Investments	66,500
Bills Payable	40,000		By Loss on Realisation A/c		2,02,575
Outstanding Salary	35,000		Srijan	81,030
To Bank A/c:		22,500	Raman	81,030
Outstanding repair bill	7,500		Manan	40,515
Bills Receivable discounted	15,000
To Srijan (Commission)		11,575
		5,84,075			5,84,075

 

Dr.	Partner’s Capital A/c						Cr.
Particulars	Srijan	Raman	Manan	Particulars	Srijan	Raman	Manan
To Balance b/d	-	-	10,000	By Balance b/d	2,00,000	1,50,000	-
To Profit & Loss A/c	32,000	32,000	16,000	By Realisation A/c (Commission)	11,575	-	-
To Realisation A/c (Loss)	81,030	81,030	40,515	By Bank A/c	-	-	66,515
To Bank A/c (Final Payment)	98,545	36,970
	2,11,575	1,50,000	66,515		2,11,575	1,50,000	66,515

 

Dr.	Bank A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	10,000	By Realisation A/c (Liabilities paid)	1,50,000
To Realisation A/c (Asset realised)	2,31,500	By Realisation A/c	22,500
To Manan’s Capital A/c	66,515	By Srijan’s Capital A/c	98,545
		By Raman’s Capital A/c	36,970
	3,08,015		3,08,015