Question

A, B and C were partners sharing profits in the ratio of 3 : 1 : 1. Their Balance-Sheet as on March 31^st 2009, the date on which they dissolve their firm, was as follows:  

Liabilities		Amount Rs	Assets		Amount Rs
Capitals:			Sundry Assets		17,000
A	27,500		Stock		7,800
B	10,000		Debtors	24,200
C	7,000	44,500	Less: Provision for doubtful debts	1,200	23,000
Loan		1,500	Bills Receivable		1,000
Creditors		6,000	Cash		3,200
		52,000			52,000

It was agreed that:

(a) A to take over Bills Receivable at Rs 800, debtors amounting to Rs 20,000 at 17,200 and the creditors of Rs 6,000 were to be paid by him at this figure.

(b) B is to take over all stock for Rs 7,000 and some sundry assets at Rs 7,200 (being 10% less than the book value)

(c) C to take over remaining sundry assets at 90% of the book value and assume the responsibility of discharge of loan together with accrued interest of Rs 300.

(d) The expenses of realization were Rs 270

The remaining debtors were sold to a debt collecting agency at 50% of the book value. Prepare Realisation A/c, Partners Capital A/c and Cash A/c

 

Answer 1

Realisation Account
Dr.						Cr.
Particulars			Amount Rs	Particulars		Amount Rs
Sundry Assets			17,000	Provision for Doubtful Debts		1,200
Debtors			24,200	Creditors		6,000
Stock			7,800	Loan		1,500
Bills Receivable			1,000	A's Capital A/c
A's Capital A/c (Creditors)			6,000	Bills Receivable	800
C's Capital A/c:				Debtors	17,200	18,000
Loan		1,500		B's Capital A/c
Interest		300	1,800	Stock	7,000
Cash A/c (Realisation Expenses)			270	Sundry Assets	7,200	14,200
				C's Capital A/c (Stock)		8,100
				Cash A/c (Debtors realised)
				50% (24,200−-20,000)		2,100
				Loss transferred to:
				A's Capital A/c	4,182
				B's Capital A/c	1,394
				C's Capital A/c	1,394	6,970
			58,070			58,070

 

Partners's Capital Accounts

Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
Realisation A/c (Loss)	4,182	1,394	1,394	Balance b/d	27,500	10,000	7,000
Realisation A/c	18,000	14,200	8,100	Realisation A/c	6,000	-	1,800
Cash A/c (Bal. Fig.)	11,318	-	-	Cash A/c (Bal. Fig.)	-	5,594	694
	33,500	15,594	9,494		33,500	15,594	9,494

Cash Account
Dr.			Cr.
Particulars	Amount Rs	Particulars	Amount Rs
Balance b/d	3,200	Realisation A/c	270
Realisation A/c	2,100	A's Capital A/c	11,318
B's Capital A/c	5,594
C's Capital A/c	694
	11,588		11,588