Question

A, B and C were in partnership sharing profit and losses in the ratio of 1 : 2 : 2. Their Balance Sheet at 31st March, 2024 was as under:

Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Sundry Creditors		50,000	Goodwill		40,000
Capital Accounts:		3,90,000	Building		2,80,000
A	1,00,000		Patents		18,000
B	1,50,000		Investments		25,000
C	1,40,000		Stock		40,000
Current Account: A		20,000	Bills Receivable		8,000
			Debtors	24,800	23,600
			Less: Provision	1,200
			Cash at Bank		4,800
			Current Accounts:		20,600
			B	8,400
			C	12,200
		4,60,000			4,60,000

C died on 1st April, 2024 and it was decided to dissolve the firm. The following transactions took place:

1. An unrecorded asset was realised for ₹ 50,000.
2. B took over half the investments at 10% discount and C took over Bills Receivable at 20% discount.
3. Stock realised as follows:
   60% of the stock was realised in full.
   10% of the stock was realised at a discount of 20%
   Remaining stock was realised at a profit of 20%.
4. Building realised ₹ 2,50,000; Debtors ₹ 20,000; Goodwill Nil and remaining investments ₹ 10,000.
5. Discount of ₹ 1,600 was allowed by creditors.
6. A contingent liability, not brought into the account, was settled for ₹ 2,000.

You are required to prepare necessary accounts.

Hint: Stock realised ₹ 41,600.

Answer 1

Dr.	Realisation A/c				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Debtors A/c		24,800	By Sundry Creditors A/c		50,000
To Stock A/c		40,000	By Bank A/c: (Assets realised):		3,71,600
To Investments A/c		25,000	Stock	41,600
To Building A/c		2,80,000	Building	2,50,000
To Goodwill A/c		40,000	Unrecorded Asset	50,000
To Patents A/c		18,000	Investments	10,000
To Bills Receivable A/c		8,000	Debtors	20,000
To Bank A/c (Liabilities Paid)		50,400	By Provision for Doubtful Debts A/c		1,200
Sundry Creditors	48,400		By B’s Capital A/c (Investment taken)		11,250
Contingent Liability	2,000		By C’s Capital A/c (Bills Rec. taken)		6,400
			By Loss on Realisation t/f to Capital A/c:		45,750
			A	9,150
			B	18,300
			C	18,300
		4,86,200			4,86,200

 

Dr.	Partner’s Current A/c						Cr.
Particulars	A	B	C	Particulars	A	B	C
To Balance b/d	-	8,400	12,200	By Balance b/d	20,000	-	-
To Realisation A/c (Loss)	9,150	18,300	18,300	By Partner’s Capital A/c (Transfer)	-	26,700	30,500
To Partner’s Capital A/c (Transfer)	10,850	-	-
	20,000	26,700	30,500		20,000	26,700	30,500

 

Dr.	Partner’s Capital A/c						Cr.
Particulars	A	B	C	Particulars	A	B	C
To Bank A/c (Final Payment)	1,10,850	1,12,050	1,03,100	By Balance b/d	1,00,000	1,50,000	1,40,000
To Realisation A/c (Investment taken)	-	11,250	-	By Current A/c (transfer)	10,850	-	-
To Realisation A/c (Bills Rec. taken)	-	-	6,400
To Current A/c (transfer)	-	26,700	30,500
	1,10,850	1,50,000	1,40,000		1,10,850	1,50,000	1,40,000

 

Dr.	Bank A/c			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Balance b/d	4,800	By Realisation A/c (Liabilities paid)		50,400
To Realisation A/c (Assets realised)	3,71,600	By A’s Capital A/c	1,10,850	3,26,000
		By B’s Capital A/c	1,12,050
		By C’s Capital A/c	1,03,100
	3,76,400			3,76,400