Question

Mrs. Rita Chowdhary and Miss Shobha are partners in a firm, ‘Fancy Garments Exports’ sharing profits and losses equally. On 1st January, 2024, the Balance Sheet of the firm was as follows:

Liabilities	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Sundry Creditors	75,000	Bank		36,000
Bills Payable	30,000	Stock		75,000
Mr. Chowdhary’s Loan	15,000	Book Debts	66,000	60,000
Reserve Fund	24,000	Less: Provision for Doubtful Debts	6,000
Mrs. Rita Chowdhary’s Capital	90,000	Plant & Machinery		45,000
Miss Shobha’s Capital	30,000	Land & Buildings		48,000
	2,64,000			2,64,000

The firm was dissolved on the date given above. The following transactions took place:

1. Mrs. Rita Chowdhary undertook to pay Mr. Chowdhary’s Loan and took over 50 per cent of stock at a discount of 20 per cent.
2. Book-debts realised ₹ 54,000; balance of the stock was sold off at a profit of 30 per cent on cost.
3. Sundry Creditors were paid out at a discount of 10 per cent. Bills payable were paid in full.
4. Plant and Machinery realised ₹ 75,000 and Land and Buildings ₹ 1,20,000.
5. Mrs. Rita Chowdhary took over the goodwill of the firm at a valuation of ₹ 30,000.
6. Realisation expenses were ₹ 5,250.

Show the Realisation Account, Bank Account and Partner’s Capital Accounts in the books of the firm.

Answer 1

Dr.	Realisation A/c				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets:			By Sundry Creditors		75,000
Stock		75,000	By Bills Payable		30,000
Book debts		66,000	By Mrs. Rita Chowdhary’s Loan		15,000
Plant & Machinery		45,000	By Provision for Doubtful Debts A/c		6,000
Land and Building		48,000	By Mrs. Rita Chowdhary Capital A/c (Stock taken over)		30,000
To Mrs. Rita Chowdhary Capital A/c (Mrs. Chowdhary loan taken over)		15,000	By Mrs. Rita Chowdhary Capital A/c (Goodwill taken over)		30,000
To Bank A/c (Sundry Creditors)		67,500	By Bank A/c		2,97,750
To Bank A/c (Bills payable)		30,000	Book debts	54,000
To Bank A/c (Realisation expenses)		5,250	Stock	48,750
To Profit on Realisation t/f to Capital A/c:			Plant & Machinery	75,000
Mrs. Rita Chowdhary	66,000	1,32,000	Land and Building	1,20,000
Miss Shobha	66,000
		4,83,750			4,83,750

 

Dr.	Partner’s Capital A/c				Cr.
Particulars	Mrs. Rita	Miss Shobha	Particulars	Mrs. Rita	Miss Shobha
To Realisation A/c (Stock taken over)	30,000	-	By Balance b/d	90,000	30,000
To Realisation A/c (Goodwill taken over)	30,000	-	By Realisation A/c - Profit	66,000	66,000
To Bank A/c	1,23,000	1,08,000	By Reserve Fund A/c	12,000	12,000
			By Realisation A/c (Mrs. Rita Chowdhary loan taken over)	15,000	-
	1,83,000	1,08,000		1,83,000	1,08,000

 

Dr.	Bank A/c		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	36,000	By Bank A/c (Sundry Creditors)	67,500
To Realisation A/c (Sundry Assets realised)	2,97,750	By Bank A/c (Bills Payable)	30,000
		By Bank A/c (Realisation expense)	5,250
		By Mrs. Rita Chowdhary Capital A/c	1,23,000
		By Miss Shobha Capital A/c	1,08,000
	3,33,750		3,33,750