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Shanti and Satya Were Partners in Firm in a Sharing Profit in the Ratio of 4:1. on 31st March ,2013 Their Balance Sheet Was as Follows - Accountancy

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Shanti and Satya were partners in firm in a sharing profit in the ratio of 4:1. On 31st march ,2013 their Balance Sheet was as follows:

                     Balance Sheet of Shanti and Satya as on 31st March, 2013

Liabilities Amount(Rs.) Assets Amount(Rs.)

Creditors

Workman Compention Fund

Satya’s Current Account

Capital’s:

        Shanti

        Satya

 

45,000

40,000

65,000

 

2,00,000

1,00,000

 

Bank

Debtors

Stock

Furniture

Machinery

Shanti’s Current Account

 

55,000

60,000

85,000

1,00,000

1,30,000

20,000

 

  4,50,000   4,50,000

On the above date the firm was dissolved:

1. Shanti took over 40% of the stock at 10% less than its book value and the remaining stock was sold for Rs.40,000. Furniture realized Rs.80,000.

2. An unrecorded investment was sold for Rs.20,000. Machinery was sold at a loss of Rs.60,000.

3. Debtors realized Rs.55,000.

4. There was an outstanding bill for repairs for which Rs.19,000 were paid.

Prepare Realisation Account.

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Solution

                                                            Retaliation Account

Dr.                                                                                                                                               Cr.

Particular Amount(Rs.) Particular Amount(Rs.)

To Sundry Asset

         Debtors                    60,000

         Stock                       85,000

         Furniture                1,00,000

         Machinery              1,30,000 

 

To Cash A/c (Liabilities)

         Creditors                   45,000

         Outstanding Bill          19,000

 

 

 

 

 

 

 

3,75,000

 

 

 

64,000

 

 

 

By Creditors A/c

By Shanti’s Current A/c (stock)

By Cash A/c (Assets Realised)

    Stock                              40,000

    Furniture                         80,000

    Unrecorded Investment    20,000

    Machinery                       70,000

    Debtors                           55,000 

 

By Realisation Loss 

      Shanti’s Current A/c       78,720

      Satya’s Current A/c        19,680 

45,000

30,600

 

 

 

 

 

2,65,000

 

 

 

98,400

  4,39,000   4,39,000
Concept: Dissolution of a Partnership Firm - Preparation of Realization Account, and Other Related Accounts
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