P, Q and R were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They agreed to dissolve their partnership firm on 31st March, 2019. P was deputed to realise the assets and pay the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm was:
Balance Sheet as at 31st March, 2019
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Creditors | 10,000 | Stock | 5,500 | |||||
| Bills Payable | 3,700 | Investments | 15,000 | |||||
| Investments Fluctuation Reserve | 4,500 | Debtors | 7,100 | |||||
| Capital A/cs: | Less: Provision for Doubtful Debtors | 450 | 6,650 | |||||
| P | 37,550 | Cash | 5,600 | |||||
| Q | 15,000 | 52,550 | R's Capital A/c | 8,000 | ||||
| Plant and Machinery | 30,000 | |||||||
| 70,750 | 70,750 | |||||||
P took over Investments for ₹ 12,500. Stock and Debtors realised ₹ 11,500. Plant and Machinery were sold to Q for ₹ 22,500 for cash. Unrecorded assets realised ₹ 1,500. Realisation expenses paid amounted to ₹ 900.
Prepare necessary Ledger Accounts to close the books of the firm.
Solution
Realisation Account
|
Dr. |
|
Cr. |
|||||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
||||
|
Plant and Machinery |
30,000 |
Creditors |
10,000 |
||||
|
Stock |
5,500 |
Bills Payable |
3,700 |
||||
|
Investments |
15,000 |
Investments Fluctuation Reserve |
4,500 |
||||
|
Debtors |
7,100 |
Provision for Doubtful Debts |
450 |
||||
|
Cash A/c: |
|
P’s Capital A/c (Investments) |
12,500 |
||||
|
Creditors |
10,000 |
|
Cash A/c: |
|
|||
|
Bills Payable |
3,700 |
|
Stock and Debtors |
11,500 |
|
||
|
Expenses |
900 |
14,600 |
Plant and Machinery |
22,500 |
|
||
|
P’s Capital A/c |
1,000 |
Unrecorded Assets |
1,500 |
35,500 |
|||
|
|
|
Loss transferred to: |
|
||||
|
|
|
P’s Capital A/c |
3,275 |
|
|||
|
|
|
Q’s Capital A/c |
1,965 |
|
|||
|
|
|
R’s Capital A/c |
1,310 |
6,550 |
|||
|
|
73,200 |
|
73,200 |
||||
Partners’ Capital Accounts
|
Dr. |
|
Cr. |
|||||||
|
Particulars |
P |
Q |
R |
Particulars |
P |
Q |
R |
||
|
Balance b/d |
– |
– |
8,000 |
Balance b/d |
37,550 |
15,000 |
– |
||
|
Realisation (Loss) |
3,275 |
1,965 |
1,310 |
Realisation A/c |
1,000 |
– |
– |
||
|
Realisation A/c (Investments) |
12,500 |
|
|
|
|
|
|
||
|
Cash A/c |
22,775 |
13,035 |
– |
Cash A/c |
– |
– |
9,310 |
||
|
|
38,500 |
15,000 |
9,310 |
|
38,550 |
15,000 |
9,310 |
||
Cash Account
|
Dr. |
|
Cr. |
|||
|
Particulars |
Amount (₹) |
Particulars |
Amount (₹) |
||
|
Balance b/d |
5,600 |
Realisation A/c |
14,600 |
||
|
Realisation A/c |
35,500 |
P’s Capital A/c |
22,775 |
||
|
R’s Capital A/c |
9,310 |
Q’s Capital A/c |
13,035 |
||
|
|
50,410 |
|
50,410 |
||
