Question

Mohan and Mayank are partners sharing profits and losses in the ratio of the capitals. They decided to dissolve their firm on 31st March, 2026, the date on which the Balance Sheet stood as under:

Liabilities	₹	₹	Assets	₹
Capital A/cs:		10,00,000	Sundry Assets	16,30,000
Mohan	6,00,000		Cash	70,000
Mayank	4,00,000
Workmen Compensation Reserve		1,00,000
Creditors		2,60,000
Mrs. Mohan’s Loan		3,40,000
		17,00,000		17,00,000

Following additional information is given:

Sundry assets realised ₹ 14,00,000 and the liabilities were discharged as follows:

1. Creditors due on 31st May, 2026, were paid at a discount of ₹ 2,000.
2. Workmen Compensation Claim of ₹ 40,000 was met.
3. Mohan agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 30,000 and to bear realisation expenses. Actual expenses of realisation amounted to ₹ 25,000 were paid by the firm.

You are required to prepare:

1. Realisation Account.
2. Partners’ Capital Accounts.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer)		16,30,000	By Creditors A/c (Transfer)		2,60,000
To Mohan’s Capital A/c (Remuneration)		30,000	By Mrs. Mohan’s Loan A/c (Transfer)		3,40,000
To Cash A/c (Liabilities Paid):		6,38,000	By Workmen Compensation Reserve A/c (Claim)		40,000
Creditors (2,60,000 − 2,000)	2,58,000		By Cash A/c (Assets Realised)		14,00,000
Workmen Claim	40,000		By Loss on Realisation transferred to:		2,58,000
Mrs. Mohan’s Loan (Book value)	3,40,000		Mohan’s Capital A/c (3/5)	1,54,800
			Mayank’s Capital A/c (2/5)	1,03,200
		22,98,000			22,98,000

 

Dr.	Partners’ Capital Accounts				Cr.
Particulars	Mohan (₹)	Mayank (₹)	Particulars	Mohan (₹)	Mayank (₹)
To Realisation A/c (Loss)	1,54,800	1,03,200	By Balance b/d	6,00,000	4,00,000
To Cash A/c (Expenses paid by firm)	25,000		By Workmen Comp. Reserve	36,000	24,000
To Cash A/c (Final Payment)	4,86,200	3,20,800	By Realisation A/c (Remuneration)	30,000
	6,66,000	4,24,000		6,66,000	4,24,000