Question

The partnership between X and Y was dissolved on March 31, 2022. On that date their respective credits to the Capitals were ₹ 1,50,000 and ₹ 10,000. ₹ 1,20,000 were due to creditors. ₹ 60,000 were due for Bank Loan and Reserve has been maintained for 20,000. X and Y shared profits in the ratio of 4 : 1. Cash balance of ₹ 18,000 was also kept in the firm. Assets realised ₹ 3,02,000. Prepare Memorandum Balance Sheet, Realisation Account; Partners' Capital Accounts and Cash Account.

Answer 1

Memorandum Balance Sheet as at 31st March, 2022
Liabilities	₹	Assets	₹
Creditors	1,20,000	Cash	18,000
Bank Loan	60,000	Other Assets (Balancing Figure)	3,42,000
Reserve	20,000
X’s Capital	1,50,000
Y’s Capital	10,000
Total	3,60,000	Total	3,60,000

 

Realisation Account
Particulars	₹	Particulars	₹
To Assets A/c	3,42,000	By Creditors A/c	1,20,000
To Cash A/c – Creditors paid	1,20,000	By Bank Loan A/c	60,000
To Cash A/c – Bank Loan paid	60,000	By Cash A/c – Assets realised	3,02,000
		By X’s Capital A/c – Loss	32,000
		By Y’s Capital A/c – Loss	8,000
Total	5,22,000	Total	5,22,000

Loss on Realisation = ₹ 40,000

Loss shared in the ratio 4 : 1:

X = ₹ 40,000 × `4/5` = ₹ 32,000

Y = ₹ 40,000 × `1/5` = ₹ 8,000

Partners’ Capital Accounts
Particulars	X (₹)	Y (₹)	Particulars	X (₹)	Y (₹)
To Realisation A/c – Loss	32,000	8,000	By Balance b/d	1,50,000	10,000
To Cash A/c	1,34,000	6,000	By Reserve A/c	16,000	4,000
Total	1,66,000	14,000	Total	1,66,000	14,000

 

Cash Account
Particulars	₹	Particulars	₹
To Balance b/d	18,000	By Realisation A/c – Creditors	1,20,000
To Realisation A/c – Assets realised	3,02,000	By Realisation A/c – Bank Loan	60,000
		By X’s Capital A/c	1,34,000
		By Y’s Capital A/c	6,000
Total	3,20,000	Total	3,20,000