Question

Following is the Balance Sheet of Arvind and Balbir as at 31st March, 2019:
 

Liabilities		Amount (₹)	Assets		Amount (₹)
Trade Creditors		45,000	Cash		750
Bills Payable		12,000	Bank		12,000
Mrs. Arvind's Loan		7,500	Stock		7,500
Mrs. Balbir's  Loan		15,000	Investments		15,000
Reserve Fund		15,000	Book Debts	30,000
Investments Fluctuation  Reserve		1,500	Less: Provision for Doubtful Debts	3,000	27,000
Capital A/cs:			Building		22,500
Arvind	15,000		Plant		30,000
Balbir	15,000	30,000	Goodwill		6,000
			Profit and Loss A/c		5,250
		1,26,000			1,26,000

 
 The firm was dissolved on the above date under the following arrangement:
(a) Arvind promised to pay off Mrs. Arvind's Loan and took Stock at ₹ 6,000.
(b) Balbir took half the Investments @ 10% discount.
(c) Book Debts realised ₹ 28,500.
(d) Trade Creditors and Bills Payable were due on average basis of one month after 31st March, but were paid immediately on 31st March @ 2% discount per annum.
(e) Plant realised ₹ 37,500; Building ₹ 60,000; Goodwill ₹ 9,000 and remaining Investments ₹ 6,750.
(f) An old typewriter, written off completely from the firm's books, now estimated to realise ₹ 450. It was taken by Balbir at this estimated price.
(g) Realisation expenses were ₹ 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.

Answer 1

Realisation Account

Dr.								Cr.
Particulars				Amount Rs	Particulars		Amount Rs
Stock				7,500	Provision for Doubtful Debts		3,000
Investments				15,000	Trade Creditors		45,000
Book Debts				30,000	Bills Payable		12,000
Building				22,500	Mrs. Arvid’s Loan		7,500
Plant				30,000	Mrs. Balbir’s Loan		15,000
Goodwill				6,000	Investments Fluctuation Reserve		1,500
Arvind’s Capital A/c (Mrs. Arvind’s Loan)				7,500	Arvind’s Capital A/c (Stock)		6,000
Bank A/c:					Balbir’s Capital A/c (Investments 7500 × 90%)		6,750
Trade Creditors			44,925		Balbir’s Capital A/c (Unrecorded Typewriter )		450
Bills Payable			11,980		Bank A/c:
Expense			1,500		Book Debts	28,500
Mrs. Balbir’s Loan			15,000	73,405	Plant	37,500
Profit transferred to:					Building	60,000
Arvind’s Capital A/c		23,522.50			Goodwill	9,000
Balbir’s Capital A/c		23,522.50		47,045	Investments	6,750	1,41,750
				2,38,950			2,38,950

 

Partners’ Capital Accounts

Dr.							Cr.
Particulars		Arvind	Balbir	Particulars	Arvind	Balbir
Profit and Loss A/c		2,625	2,625	Balance b/d	15,000	15,000
Realisation A/c (Assets)		6,000	7,200	Realisation A/c	7,500	–
Bank A/c		44,897.50	36,197.50	Reserve Fund	7,500	7,500
				Realisation A/c (Profit)	23,522.50	23,522.50
		53,522.50	46,022.50		53,522.50	46,022.50

 

      Bank Account

Dr.					Cr.
Particulars		Amount Rs	Particulars	Amount Rs
Balance b/d		12,000	Realisation A/c	73,405
Cash A/c		750	Arvind’s Capital A/c	44,897.5
Realisation A/c		1,41,750	Balbir’s Capital A/c	36,197.5
		1,54,500		1,54,500

Working Notes:
 

Creditors	45,000
Less:2% discount for 1 month	(75)
Payment made to Creditors	44,925
Bills Payable	12,000
Less: 2% discount for 1 month	(20)
Payment made for Bills Payable	11,980