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Rita and Sobha Are Partners in a Firm, Fancy Garments Exports, Sharing Profits and Losses Equally. on 1st April, 2019, the Balance Sheet of the Firm Was: - Accountancy

Numerical

Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2019, the Balance Sheet of the firm was:

Sundry Creditors 75,000 Cash 6,000
Bills Payable 30,000 Bank 30,000
Rita's Loan 15,000 Stock 75,000
Reserve       24,000 Book Debts 66,000  
Capital A/cs:       Less: Provision for Doubtful Debts 6,000 60,000
Rita 90,000        
Sobha 30,000 1,20,000 Plant and Machinery   45,000
    Land and Building 48,000
  2,64,000   2,64,000


The firm was dissolved on the date given above. The following transactions took place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised ₹ 54,000; balance of the Stock was sold at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised ₹ 75,000. Land and Building ₹ 1,20,000.
(e) Rita took the goodwill of the firm at a value of ₹ 30,000.
(f) An unrecorded asset of ₹ 6,900 was handed over to an unrecorded liability of ₹ 6,000 in full settlement.
(g) Realisation expenses were ₹ 5,250.
Show Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

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Solution

Realisation Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Stock

75,000

Provision for Doubtful Debts

6,000

Book Debts

66,000

Sundry Creditors

75,000

Plant and Machinery

45,000

Bills Payable

30,000

Land and building

48,000

   
   

Rita’s Capital A/c

30,000

   

(Goodwill taken over)

 

Bank A/c:

 

Rita’s Loan A/c (Stock taken over)

15,000

Sundry Creditors

67,500

     

Bills Payable

30,000

 

Bank A/c:

 

Expenses

5,250

1,02,750

Book Debts

54,000

 

Profit transferred to:

 

Stock

73,125

 

Rita’s Capital A/c

70,688

 

Plant and Machinery

75,000

 

Sobha’s Capital A/c

70,687

1,41,375

Land and Building

1,20,000

3,22,125

 

4,78,125

 

4,78,125

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Rita

(₹)

Sobha

(₹)

Particulars

Rita

(₹)

Sobha

(₹)

Realisation A/c (Assets)

30,000

Balance b/d

90,000

30,000

     

Reserve Fund

12,000

12,000

Bank A/c

1,42,688

1,12,687

Realisation A/c (Profit)

70,688

70,687

 

1,72,688

1,12,687

 

1,72,688

1,12,687

 

Rita’s Loan A/c

Dr.

                                                             Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

To Realisation A/c

15,000

Balance b/d

15,000

 

15,000

 

15,000

 

Bank Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Balance b/d

30,000

Realisation A/c

1,02,750

Cash A/c

6,000

Rita’s Capital A/c

1,42,688

Realisation A/c

3,22,125

Sobha’s Capital A/c

1,12,687

 

3,58,125

 

3,58,125

Working Notes:
WN1: Value Of Stock Taken Over by Rita 

`"Stock taken over by Rita"= ("Book Value of Stock" xx  25/100 xx 80/100)`

`"Stock taken over by Rita" = ₹(75,000 xx 25/100 xx 80/100) = ₹15,000`

WN2: Value of Stock Sold

Book value of balance of stock sold = Value of stock - Stock taken over by rita

Book Value of Balance of stock sold = ₹ (75,000 - 18,750) = ₹56,250

Value of stock sold = ₹ `(56,250 xx130/100) = ₹73,123" "`[sold at 30%]

Concept: Accounting Treatment of Bill - Journal Entries and Ledger
  Is there an error in this question or solution?
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 7 Dissolution of a Partnership Firm
Exercise | Q 35 | Page 63
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