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 on 31st March, 2017

Liabilities		Amount (₹)	Assets	Amount (₹)
Capitals:			Capital: Manan	10,000
Srijan	2,00,000		Plant	2,20,000
Raman	1,50,000	3,50,000	Investments	70,000
Creditors		75,000	Stock	50,000
Bills Payable		40,000	Debtors	60,000
Outstanding Salary		35,000	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.
(a) 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.
(b)

Assets were realised as follows:	₹
Plant	85,000
Stock	33,000
Debtors	47,000

(c) Investments were realised at 95% of the book value.
(d) The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
(e) A contingent liabillity in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for ₹ 15,000.
(f) Expenses of realisation amounting to ₹ 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Answer 1

Realisation A/c

Dr.							Cr.
Particulars			Amount (₹)	Particulars		Amount (₹)
To Plant			2,20,000	By Creditors		75,000
To Investments			70,000	By Bills Payable		40,000
To Stock			50,000	By Outstanding Salary		35,000
To Debtors			60,000
To Srijan’s Capital A/c (Commission)			11,575	By Bank A/c:
To Bank A/c:				Investments	66,500
Outstanding Bill Repair		7,500		Plant	85,000
Contingent liability against bills payable		15,000		Stock	33,000
Creditors		75,000		Debtors	47,000	2,31,500
Bills Payable		40,000
Outstanding Salary		35,000	1,72,500	By Loss on Realisation transferred to:
				Srijan’s Capital A/c	81,030
				Raman’s Capital A/c	81,030
				Manan’s Capital A/c	40,515	2,02,575
			5,84,075			5,84,075

    

Partner’s Capital A/c

Dr.									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 Realisation A/c (Loss)		81,030	81,030	40,515	By Realisation A/c (Commission)	11,575
To Profit & Loss A/c		32,000	32,000	16,000
To Bank A/c (Final Payment)		98,545	36,970	–	By Bank A/c			66,515
		2,11,575	1,50,000	66,515		2,11,575	1,50,000	66,515

 

 Bank A/c

Particulars		Amount (₹)	Particulars	Amount (₹)
To balance b/d		10,000	By Srijan’s Capital A/c	98,545
To Realisation A/c (Asset Realised)		2,31,500	By Raman’s Capital A/c	36,970
To Manan’s Capital A/c		66,515	By Realisation A/c (Liabilities Paid)	1,72,500
		3,08,015		3,08,015