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A And B Are Partners in a Firm Sharing Profits and Losses in the Ratio of 3 : 2. on 31st March, 2019, Their Balance Sheet Was as Follows: - Accountancy

Numerical

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2019
Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 38,000 Cash at Bank 11,500
Mrs. A's Loan 10,000 Stock 6,000
B's Loan 15,000 Debtors 19,000
Reserve 5,000 Furniture 4,000
A's Capital 10,000   Plant 28,000
B's Capital 8,000 18,000 Investments 10,000
      Profit and LossA/C 7,500
    86,000   86,000


The firm was dissolved on 31st March, 2019 and both the partners agreed to the following:
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Mrs. A's Loan.
(b) Other assets realised as: Stock − ₹ 5,000; Debtors  − ₹ 18,500; Furniture  − ₹ 4,500; Plant  − ₹ 25,000.
(c) Expenses of realisation came to ₹ 1,600.
(d) Creditors agreed to accept ₹ 37,000 in full settlement of their claims.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

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Solution

Realisation Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Stock

6,000

Creditors

38,000

Debtors

19,000

Mrs. A’s Loan

10,000

Furniture

4,000

 

 

Plant

28,000

A’s Capital A/c (Investments)

8,000

Investments

10,000

Bank A/c:

 

A’s Capital A/c (Mrs. A’s loan)

10,000

Stock

5,000

 

Bank A/c :

 

Debtors

18,500

 

Expenses

1,600

 

Furniture

4,500

 

Creditors

37,000

38,600

Plant

25,000

53,000

 

 

Loss transferred to:

 

 

 

A’s Capital A/c

3,960

 

 

 

B’s Capital A/c

2,640

6,600

 

1,15,600

 

1,15,600

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

Particulars

A

B

Realisation (loss)

3,960

2,640

Balance b/d

10,000

8,000

Realisation A/c

8,000

Reserve A/c

3,000

2,000

Profit and Loss A/c

4,500

3,000

Realisation A/c   

10,000

Bank A/c

6,540

4,360

 

 

 

 

23,000

10,000

 

23,000

10,000

 

B’s Loan Account  

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

 

 

Balance b/d

15,000

Bank A/c

15,000

 

 

 

15,000

 

15,000

 

Bank Account 

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

11,500

Realisation A/c

38,600

Realisation A/c

53,000

A’s Capital A/c

6,540

 

 

B’s Capital A/c

4,360

 

 

B’s Loan A/c

15,000

 

64,500

 

64,500

Concept: Accounting Treatment of Bill - Journal Entries and Ledger
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 7 Dissolution of a Partnership Firm
Exercise | Q 24 | Page 58
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