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Srijan, Raman and Manan Were Partners in a Firm Sharing Profits and Losses in the Ratio of 2: 2: 1. on 31st March 2017 Their Balance Sheet Was as Follows: - CBSE (Arts) Class 12 - Accountancy

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Question

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March 2017 their Balance Sheet was as follows:

Balance Sheet of Srijan , Raman and Manan
as on 31.3.2017
Liabilities

Amount

Rs

Assets

 

Amount

Rs

Capitals:

      Srijan       2,00,000

      Raman      1,50,000

Creditors

Bills Payable

Outstanding Salary

 

 

 

3,50,000

75,000

40,000

35,000

 

Capital: Manan

Plant

Investment

Stock

Debtors

Bank

Profit & Loss A/c

10,000

2,20,000

70,000

50,000

60,000

10,000

80,000

  5,00,000   5,00,000
   

On the above date, they decided to dissolve the firm.

1) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.

2) Assets were realised as follows:

   Rs
Plant 85,000
Stock 33,000
Debtors 47,000

3) Investments were realised at 95% of the book value.

4) The firm had to pay Rs 7,500 for an outstanding repair bill not provided for earlier.

5) A contingent liability in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for Rs 15,000.

6) Expenses of realisation amounting to Rs 3,000 were paid Srijan.

Prepare Realisation Account Partners' Capital Accounts and Bank Account.

Solution

Realisation Account
Dr.   Cr.
Particulars Rs Particulars Rs

To Plant A/c

To Investment A/c

To Stock A/c

To Debtors A/c

To Bank A/c

Creditors                 75,000

Bills Payable             40,000

Outstanding Salary   35,000

To Bank A/c

 Outstanding Bill for Repair    7,500

 Dishonour of Discount Bill   15,000

To Srijan’s Capital A/c Commission

(2,31,500x0.05)

2,20,000

70,000

50,000

60,000

 

 

 

1,50,000

 

 

22,500

 

11,575

By Creditors

By Bills Payable

By Outstanding Salary

By Bank A/c

    Plant            85,000

    Stock           33,000

    Debtors        47,000

    Investment   66,500

By Partners Capital A/c

   Srijan         81,030

   Raman        81,030

   Manan        40,515

 

75,000

40,000

35,000

 

 

 

 

2,31,500

 

 

 

2,02,575

 

  5,84,075   5,84,075

 

Partner’s Capital Account
Dr. Cr.
Particulars Srijan Raman Manan Particulars Srijan Raman Manan

To Balance b/d

To P/L A/c

To Realisation A/c

(Loss)

To Bank A/c

 

32,000

 

81,030

98,545

 

32,000

 

81,030

36,970

10,000

16,000

 

40,515

 

By Balance b/d

By Realisation A/c

(Commission)

By Bank A/c

 

2,00,000

 

11,575

 

 

1,50,000

 

 

 

 

 

 

 

66,515

 

  2,11,575 1,50,000 66,515   2,11,575 1,50,000 66,515
           

 

Bank Account
Dr. Cr.
Particulars Rs  Particulars Rs

To Balance b/d

To Realisation A/c (Asset realised)

To Manan’s Capital A/c

 

10,000

2,31,500

66,515

 

By Realisation A/c

By Realisation A/c

By Srijan’s Capital A/c

By Raman’s Capital A/c

1,50,000

22,500

98,545

36,970

  3,08,015   3,08,015
  Is there an error in this question or solution?
Solution Srijan, Raman and Manan Were Partners in a Firm Sharing Profits and Losses in the Ratio of 2: 2: 1. on 31st March 2017 Their Balance Sheet Was as Follows: Concept: Dissolution of a Partnership Firm - Preparation of Realization Account, and Other Related Accounts.
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