Question

Umesh and Prakash were partners sharing profit and losses in the proportion of 3/5 and 2/5 respectively. They dissolved their partnership firm on 31st March, 2013, when their financial position was us under: 

Balance sheet as on 31st March, 2012

Liabilities	Amount	Assets	Amount
Sundry Creditors	7500	Cash at Bank	1500
Umesh’s Wife’s Loan	15000	Debtors	33750
Capital Accounts:		Less: R.D.D. - 3750	30000
Umesh	69000	Stock	67500
Prakash	45000	Machinery	22500
		Furniture	15000
	136500		136500

1. The assets realised as under. Goodwill Rs. 7500; Stock Rs. 60000; Debtors Rs. 27000
2. Machinery was taken over by Prakash at Rs. 20,000 and furniture by Umesh at book value.
3. Umesh agreed to discharge his wife’s loan.
4. The creditors were paid at a rebate of Rs. 1500.
5. The expenses of dissolution amounted to Rs. 3000

Answer 1

Dr.	Realisation Account						Cr.
Particulars	J.F.	Amount (₹)	Amount (₹)	Particulars	J.F.	Amount (₹)	Amount (₹)
To Machinery		-	22,500	By Goodwill		-	7,500
To Furniture		-	15,000	By Stock		-	60,000
To Creditors (paid ₹7,500 − ₹1,500 rebate)		-	6,000	By Debtors		-	27,000
To Dissolution Expenses		-	3,000	By Machinery		-	20,000
To Umesh		-	15,000
To Capital A/c (Profit):
– Umesh (3/5)		13,200	22000
– Prakash (2/5)		8,800
Total			83,500	Total			83,500

 

Partners’ Capital Accounts
Particulars	J.F.	Umesh (₹)	Prakash (₹)
To Realisation A/c		-	-
To Realisation A/c		15,000	-
To Cash		74,700	33,800
By Balance b/d		69,000	45,000
By Realisation A/c		13,200	8,800
By Furniture		15,000	-
By Machinery		-	20,000
Total		97,200	53,800

 

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Realisation A/c	94,500	By Realisation A/c	6,000
		By Dissolution Expenses	3,000
		By Umesh Capital	74,700
		By Prakash Capital	33,800
Total	94,500	Total	94,500