Question

Ram, Shyam and Mohan shared profits in the ratio of 2 : 2 : 1. Following is their Balance Sheet at the date of dissolution:

Liabilities	₹	Assets	₹
Creditors	40,000	Cash at Bank	44,000
Bills Payable	2,600	Debtors	15,000
Provision for Depreciation	15,000	Stock	50,000
Ram's Loan	40,000	Plant	75,000
Capital Accounts:		Patents	20,000
Ram	1,35,000	100 Shares in X Co.	5,000
Shyam	30,000	300 Shares in Y Co.	18,000
Mohan	10,000	Goodwill	15,600
		Advertisement Suspense A/c	30,000
	2,72,600		2,72,600

1. Ram takes over Debtors at ₹10,000; Stock at a 20% less value; and Plant at ₹30,000.
2. One of the Creditors took some of the patents whose book value was ₹8,000, at a valuation of ₹4,800. Balance of the creditors were paid at a discount of ₹1,200.
3. There was an unrecorded asset of ₹15,000 (not mentioned in the Balance Sheet) which was taken over by Ram at ₹10,000 in part payment of his loan.
4. Shares in X Co. were agreed to be taken over by Shyam at (\pmb{\tau}30) per share.
5. Shares in Y Co. were valued at ₹12,000. All partners divided these shares in their profit sharing ratio.
6. Balance of the Patents realised 70% of their book value.

Prepare necessary ledger accounts.

Hints:

(1) Net amount paid to Creditors: ₹40,000 (-) 4,800 (-) 1,200 = ₹34,000.

(2) Entry for Ram's Loan:

Ram's Loan A/c  Dr.	40,000
To Realisation A/c		10,000
To Bank A/c		30,000

Answer 1

Realisation Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Sundry Assets A/c (Transfer):		By Sundry Liabilities A/c (Transfer):
Debtors	15,000	Creditors	40,000
Stock	50,000	Bills Payable	2,600
Plant	75,000	Provision for Depreciation	15,000
Patents	20,000
100 Shares in X Co.	5,000	By Ram's Capital A/c (Assets taken over):
300 Shares in Y Co.	18,000	Debtors (10,000) + Stock (40,000) + Plant (30,000)	80,000
Goodwill	15,600	By Ram's Loan A/c (Unrecorded asset)	10,000
		By Shyam's Capital A/c (Shares in X Co.)	3,000
To Bank A/c (Liabilities Paid):		By Partners' Capital A/cs (Shares in Y Co.):
Creditors (\(40,000 - 4,800 - 1,200\))	34,000	Ram (\(12,000 \times 2/5\))	4,800
Bills Payable	2,600	Shyam (\(12,000 \times 2/5\))	4,800
		Mohan (\(12,000 \times 1/5\))	2,400
		By Bank A/c (Remaining Patents \(12,000 \times 70\%\))	8,400
		By Loss on Realisation transferred to:
		Ram's Capital A/c	25,680
		Shyam's Capital A/c	25,680
		Mohan's Capital A/c	12,840
Total	2,35,200	Total	2,35,200

Partners' Capital Accounts

Particulars	Ram (₹)	Shyam (₹)	Mohan (₹)	Particulars	Ram (₹)	Shyam (₹)	Mohan (₹)
To Advertisement Suspense	12,000	12,000	6,000	By Balance b/d	1,35,000	30,000	10,000
To Realisation A/c (Loss)	25,680	25,680	12,840	By Bank A/c (Cash brought in)	—	15,480	11,240
To Realisation A/c (Assets)	80,000	3,000	—
To Realisation A/c (Y Co. Shares)	4,800	4,800	2,400
To Bank A/c (Final Payment)	12,520	—	—
Total	1,35,000	45,480	21,240	Total	1,35,000	45,480	21,240

Ram's Loan Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Realisation A/c (Unrecorded asset)	10,000	By Balance b/d	40,000
To Bank A/c (Balance paid)	30,000
Total	40,000	Total	40,000

Bank Account

Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	44,000	By Realisation A/c (Creditors paid)	34,000
To Realisation A/c (Patents realised)	8,400	By Realisation A/c (Bills Payable paid)	2,600
To Shyam's Capital A/c	15,480	By Ram's Loan A/c	30,000
To Mohan's Capital A/c	11,240	By Ram's Capital A/c (Final Payment)	12,520
Total	79,120	Total	79,120