Question

On 1st April, 2018, A, B and C commenced business in partnership sharing profits and losses in proportion of 1/2, 1/3 and 1/6 respectively. They paid into their Bank A/c as their capitals ₹ 22,000; ₹ 10,000 by A, ₹ 7,000 by B and ₹ 5,000 by C. During the year, they drew ₹ 5,000; being ₹ 1,900 by A, ₹ 1,700 by B and ₹ 1,400 by C.
On 31st March, 2019, they dissolved their partnership, A taking up Stock at an agreed valuation of ₹ 5,000, B taking up Furniture at ₹ 2,000 and C taking up Debtors at ₹ 3,000. After paying up their Creditors, there remained a balance of ₹ 1,000 at Bank. Prepare necessary accounts showing the distribution of the cash at the Bank and of the further cash brought in by any partner or partners as the case required. 

Answer 1

Realisation Account

Dr.					Cr.
Particulars		Amount (₹)	Particulars			Amount (₹)
Sundry Assets (WN)		17,000	A’s Capital (Stock)			5,000
			B’s Capital (Furniture)			2,000
			C’s Capital (Debtors)			3,000
			Bank A/c (Assets realised)			1,000
			Loss transferred to:
			A’s Capital A/c	3,000
			B’s Capital A/c	2,000
			C’s Capital A/c	1,000		6,000
		17,000				17,000

 

Partners’ Capital Accounts

Dr.									Cr.
Particulars		A	B	C	Particulars	A	B	C
Realisation A/c		5,000	2,000	3,000	Balance b/d	8,100	5,300	3,600
Realisation A/c (Loss)		3,000	2,000	1,000	Cash A/c	–	–	400
Cash A/c		100	1,300	–
		8,100	5,300	4,000		8,100	5,300	4,000

 

Bank Account

Dr.					Cr.
Particulars		Amount (₹)	Particulars	Amount (₹)
Realisation A/c		1,000	A’s Capital A/c	100
C’s Capital A/c		400	B’s Capital A/c	1,300
		1,400		1,400

Working Notes:

Memorandum Balance Sheet

as on March 31, 2019

Liabilities		Amount (₹)	Assets	Amount (₹)
Capital A/cs:
A	10,000  – 1,900	8,100	Sundry Assets	17,000
B	7,000 – 1,700	5,300	(Balancing figure)
C	5000 – 1400	3,600
		17,000		17,000