Question

Following is the Balance Sheet of Ramji Lal and Panna Lal as at 31st March, 2024:

Liabilities	₹	Assets	₹	₹
Capitals:		Goodwill		4,000
Ramji Lal	16,000	Machinery		6,000
Panna Lal	10,000	Plant		12,800
Reserves	3,600	Debtors	10,800
Workmen Compensation Reserve	2,000	Less: Provision	800	10,000
Creditors	5,400	Bank		6,800
Bills Payable	2,600
	39,600			39,600

They decided to dissolve the firm. Assets are realised as follows:

1. Machinery 10% less than book value; Plant ₹ 12,500 and Goodwill ₹ 2,520.
2. Ramji Lal is to take over Debtors amounting to ₹ 6,800 at ₹ 6,000, remaining Debtors were realised for 90% of the book value.
3. The bill payable of ₹ 2,600 to be assumed by Panna Lal at that figure.
4. Creditors are paid off at a discount of 10%.
5. An amount of ₹ 2,500 had to be paid for Workmen Compensation.
6. The liquidation expenses amounted to ₹ 1,000.

You are required to show the Realisation Account, Capital Accounts and Bank Account.

Hint: Entire amount of Workmen Compensation Reserve of ₹ 2,000 will be credited to Realisation Account.

Answer 1

Dr.	Realisation Account		Cr.
Particulars	₹	Particulars	₹
To Goodwill A/c	4,000	By Provision for Doubtful Debts A/c	800
To Machinery A/c	6,000	By Workmen Compensation Reserve A/c	2,000
To Plant A/c	12,800	By Creditors A/c	5,400
To Debtors A/c	10,800	By Bills Payable A/c	2,600
To Bank A/c – Creditors paid	4,860	By Bank A/c – Machinery realised	5,400
To Bank A/c – Workmen Compensation	2,500	By Bank A/c – Plant realised	12,500
To Bank A/c – Liquidation expenses	1,000	By Bank A/c – Goodwill realised	2,520
To Panna Lal’s Capital A/c – Bills Payable taken over	2,600	By Ramji Lal’s Capital A/c – Debtors taken over	6,000
		By Bank A/c – Remaining Debtors realised	3,600
		By Ramji Lal’s Capital A/c – Loss on Realisation	1,870
		By Panna Lal’s Capital A/c – Loss on Realisation	1,870
Total	44,560	Total	44,560

 

Partners’ Capital Accounts
Particulars	Ramji Lal (₹)	Panna Lal (₹)	Particulars	Ramji Lal (₹)	Panna Lal (₹)
To Realisation A/c – Debtors taken over	6,000	—	By Balance b/d	16,000	10,000
To Realisation A/c – Loss	1,870	1,870	By Reserves A/c	1,800	1,800
To Bank A/c	9,930	12,530	By Realisation A/c – Bills Payable taken over	—	2,600
Total	17,800	14,400	Total	17,800	14,400

 

Dr.	Bank Account		Cr.
Particulars	₹	Particulars	₹
To Balance b/d	6,800	By Realisation A/c – Creditors	4,860
To Realisation A/c – Machinery	5,400	By Realisation A/c – Workmen Compensation	2,500
To Realisation A/c – Plant	12,500	By Realisation A/c – Liquidation expenses	1,000
To Realisation A/c – Goodwill	2,520	By Ramji Lal’s Capital A/c	9,930
To Realisation A/c – Debtors	3,600	By Panna Lal’s Capital A/c	12,530
Total	30,820	Total	30,820