Question

Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows:    

Balance Sheet of Rose and Lily as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)	Amount (Rs.)
Creditors	40,000	Cash		16,000
Lily’s loan	32,000	Debtors	80,000	76,400
Profit and Loss	50,000	Less: Provision for doubtful Debts	3600
Capitals:		Inventory		109,600
Lily	160,000	Bills Receivable		40,000
Rose	240,000	Buildings		280,000
	522,000			522,000

Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised Rs 4,84,000.  Creditors agreed to take Rs 38,000. Cost of Realisation was Rs 2,400. There was a Motor Cycle in the firm which was bought out of the firm’s money, was not shown in the books of the firm. It was now sold for Rs 10,000. There was a contingent liability in respect of outstanding electric bill of Rs 5,000, Bill Receivable taken over by Rose at Rs 33,000.

Show Realisation Account, Partners Capital Account, Loan Account and Cash Account.

Answer 1

Books of Rose and Lily
Realisation Account
Dr.                                                                                        Cr.

Particulars	Amount (Rs.)	Amount (Rs.)	Particulars	Amount (Rs.)	Amount (Rs.)
Debtors		80,000	Provision for Doubtful Debts		3,600
Inventory		109,600	Creditors		40,000
Bills Receivables		40,000	Cash:		494,000
Buildings		280,000	Motor cycle	10,000
			Other Assets	484,000
Cash:		45,400
Outstanding Electricity Bill	5,000		Rose’s Capital (Bills Receivable)		33,000
Creditors	38,000
Expenses	2,400
Profit transferred to:		15,600
Rose' Capital	6,240
Lily's Capital	9,360
		570,600			570,600

                             Partners’ Capital Accounts
Dr.                                                                                             Cr. 

Particulars	Rose	Lily	Particulars	Rose	Lily
Realisation  (Bills Receivable)	33,000	-	Balance b/d	2,40,000	1,60,000
Cash A/c	233,240	199,360	Profit and Loss	20,000	30,000
			Realisation  (Profit)	6,240	9,360
	2,66,240	1,99,360		266,240	199,360

Lily's Loan Account
Dr.                                                                                                 Cr.

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Cash	32,000	Balance b/d	32,000
	32,000		32,000

                                           Cash Account
Dr.                                                                                             Cr.

Particulars	Amount (Rs.)	Amount (Rs.)	Particulars	Amount (Rs.)	Amount (Rs.)
Balance b/d		16,000	Realisation:		45,400
Realisation:		494,000	Creditors	38,000
Motor Cycle	10,000		Outstanding Electricity Bill	5,000
Other Assets	484,000		Expenses	2,400
			Lily's Loan		32,000
			Rose’s Capital A/c		233,240
			Lily’s Capital A/c		199,360
		510,000			510,000

Note: In the solution Contingent Liability of Electricity Bill has been treated as Electricity Bill Payable.