Srijan, Raman and Manan Were Partners in a Firm Sharing Profits and Losses in the Ratio of 2: 2: 1. on 31st March 2017 Their Balance Sheet Was as Follows: - Accountancy

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Sum

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March 2017 their Balance Sheet was as follows:

Balance Sheet of Srijan , Raman and Manan
as on 31.3.2017
Liabilities

Amount

Rs

Assets

 

Amount

Rs

Capitals:

      Srijan       2,00,000

      Raman      1,50,000

Creditors

Bills Payable

Outstanding Salary

 

 

 

3,50,000

75,000

40,000

35,000

 

Capital: Manan

Plant

Investment

Stock

Debtors

Bank

Profit & Loss A/c

10,000

2,20,000

70,000

50,000

60,000

10,000

80,000

  5,00,000   5,00,000
   

On the above date, they decided to dissolve the firm.

1) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.

2) Assets were realised as follows:

   Rs
Plant 85,000
Stock 33,000
Debtors 47,000

3) Investments were realised at 95% of the book value.

4) The firm had to pay Rs 7,500 for an outstanding repair bill not provided for earlier.

5) A contingent liability in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for Rs 15,000.

6) Expenses of realisation amounting to Rs 3,000 were paid Srijan.

Prepare Realisation Account Partners' Capital Accounts and Bank Account.

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Solution

Realisation Account
Dr.   Cr.
Particulars Rs Particulars Rs

To Plant A/c

To Investment A/c

To Stock A/c

To Debtors A/c

To Bank A/c

Creditors                 75,000

Bills Payable             40,000

Outstanding Salary   35,000

To Bank A/c

 Outstanding Bill for Repair    7,500

 Dishonour of Discount Bill   15,000

To Srijan’s Capital A/c Commission

(2,31,500x0.05)

2,20,000

70,000

50,000

60,000

 

 

 

1,50,000

 

 

22,500

 

11,575

By Creditors

By Bills Payable

By Outstanding Salary

By Bank A/c

    Plant            85,000

    Stock           33,000

    Debtors        47,000

    Investment   66,500

By Partners Capital A/c

   Srijan         81,030

   Raman        81,030

   Manan        40,515

 

75,000

40,000

35,000

 

 

 

 

2,31,500

 

 

 

2,02,575

 

  5,84,075   5,84,075

 

Partner’s Capital Account
Dr. Cr.
Particulars Srijan Raman Manan Particulars Srijan Raman Manan

To Balance b/d

To P/L A/c

To Realisation A/c

(Loss)

To Bank A/c

 

32,000

 

81,030

98,545

 

32,000

 

81,030

36,970

10,000

16,000

 

40,515

 

By Balance b/d

By Realisation A/c

(Commission)

By Bank A/c

 

2,00,000

 

11,575

 

 

1,50,000

 

 

 

 

 

 

 

66,515

 

  2,11,575 1,50,000 66,515   2,11,575 1,50,000 66,515
           

 

Bank Account
Dr. Cr.
Particulars Rs  Particulars Rs

To Balance b/d

To Realisation A/c (Asset realised)

To Manan’s Capital A/c

 

10,000

2,31,500

66,515

 

By Realisation A/c

By Realisation A/c

By Srijan’s Capital A/c

By Raman’s Capital A/c

1,50,000

22,500

98,545

36,970

  3,08,015   3,08,015
  Is there an error in this question or solution?
2017-2018 (March) Delhi Set 1

RELATED QUESTIONS

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.


Mala, Neela and Kala were partners sharing profits in the ratio of 3: 2: 1. On 1.3.2015 their firm was dissolved. The assets were realized and liabilities were paid off. The accountant prepared Realisation Account, Partners' Capital Accounts and Cash Account, but forgot to post few amounts in these accounts.

You are required to complete these below-given accounts by posting correct amounts.

Realisation Account
Dr.   Cr.
Particulars

Amount

Rs

Particulars

Amount

Rs

To Sundry Assets :

   Machinery             10,000

   Stock                   21,000

   Debtors               20,000

   Prepaid Insurance     400

  Investment            3,000

To Mala’s Capital A/c

     Sheela Loan

To Cash – Creditors paid

To Cash – Dishonored bill paid

To Cash Expenses

 

 

 

 

 

54,400

13,000

 

15,000

5,000

800

By Provision for bad debts

By Sundry Creditors

By Sheela’s Loan

By Repairs and Renewals Reserve

By Cash – Assets sold

   Machinery         8,000

   Stock              14,000

   Debtors           16,000

By Mala’s Capital Investments

By ___________

 

1,000

15,000

13,000

1,200

 

 

 

38,000

2,000

______

 

 

88,200

 

88,200

 

Capital Account
Dr.   Cr.
Particulars

Mala

Rs

Neela

Rs

Kala

Rs

Particulars

Mala

Rs

Neela

Rs

Kala

Rs

----------

----------

To Cash

-----

-----

12,000

-----

-----

9,000

-----

-----

 

---------

---------

To Cash

-----

-----

 

-----

-----

 

-----

-----

1000

  23,000 15,000 3,000   23,000 15,000 3,000

 

Cash Account
Dr.   Cr.
Particulars

Amount

Rs

Particulars

Amount

Rs

To Balance b/d

To Realisation A/c

    Sale of Assets

To Kala’s Capital A/c

 

 

2,800

38,000

 

1,000

 

 

By Realisation A/c

    Creditors paid

By Dishonoured bill

_____________

By Mala’s Capital A/c

By Neela’s Capital A/c

15,000

 

5,000

 

12,000

9,000

 

41,800

 

41,800

 


Chopra, Shah and Patel were partners sharing profits in the ratio of 3:2:1. On 31.3.2014 their firm was dissolved. The assets were realized and liabilities were paid off. The accountant prepared Realisation Account, Partner's Capital Accounts and Cash Account but forgot to post few amounts in these accounts.

You are required to complete the below give accounts by posting correct amounts

Realisation Account
Dr.   Cr.
Particulars

Amount

Rs

Particulars

Amount

Rs

To Plant and Machinery 1,60,000 By Sundry Creditors 1,50,000
To Stock 1,50,000 By Mrs. Chopra Loan 1,30,000
To Sundry Debtors 2,00,000 By Repairs and Renewals Reserve 12,000
To Prepaid Insurance 4,000 By Provision for Bad debts 10,000
To Investment 30,000 By Cash A/c – (Assets sold)  
To Chopra’s Capital A/c
(Mrs. Chopra’s Loan)
1,30,000 Plant       1,20,000  
To Cash A/c (Dishonored Bill) 50,000 Stock      1,20,000  
To Cash (Creditors) 1,50,000 Debtors   1,60,000 3,80,000
To Cash (Expenses) 8,000 By Chopra’s Capital A/c
(Investment)
20,000
    ----------------- -------
  8,82,000   8,82,000

 

Capital Account
Dr.   Cr.
Particulars

Chopra

Rs

Shah

Rs

Patel

Rs

Particulars

Chopra

Rs

Shah

Rs

Patel

Rs

To Realisation 20,000 ----- ------ By bal b/d      
-------- -------- -------- -------- By Realisation
(Loan)
1,30,000    
-------- -------- -------- -------- ------------- -------- -------- --------
  2,30,000 1,50,000 30,000   2,30,000 1,50,000 30,000

 

Cash Account
Dr.   Cr.
Particulars

Amount

Rs

Particulars

Amount

Rs

--------------- -------- By Realisation A/c (Dishonored
Bill)
50,000
--------------- -------- By Realisation (Sundry  Creditors) 1,50,000
To Patel’s Capital A/c 10,000 --------------- --------
    By Chopra’s Capital A/c 1,20,000
    By Shah’s Capital A/c 90,000
  4,18,000   4,18,000

Jayant and Ramakant were partners in the firm. On 31st March 2013 their Balance Sheet was as follows:

Balance Sheet of Jayant and Ramakant as on 31st March 2013
Liabilities Amount (Rs) Assets Amount (Rs)

Creditors

Workman Compensation Fund

Satya’s Current Account

Capital's:

   Jayant

   Ramaknat

75,000

45,000

15,000

 

Bank

Debtors

Stock

Furniture

Machinery

Shanti’s Current Account

70,000

2,00,000

20,000

20,000

3,12,000

13,000

 

6,35,000

 

6,35,000

On the above date the firm was dissolved:

1. Jayant took over 40% of the stock at 20% less than its book value and the remaining stock was sold for Rs 15,000. Furniture realized Rs 20,000.
2. An unrecorded asset was sold for Rs 3,000. Machinery was sold at a loss of Rs 75,000.
3. Debtors realized Rs 10,000.
4. There was an outstanding bill for repairs for which Rs 38,000 were paid.

Prepare Realisation Account


Kumar and Gaurav were partners in the firm in a sharing profit in the ratio of their capitals. On 31st March 2013 their Balance Sheet was as follows:

Balance Sheet of Kumar and Gaurav as on 31st March 2013
Liabilities

Amount

Rs

Assets

Amount

Rs

Creditors

Workman Compensation Fund

Satya’s Current Account

Capital’s:

   Kumar        1,50,000

   Gaurav       1,00,000

80,000

25,000

24,000

 

 

2,50,000

Bank

Debtors

Stock

Machinery

Shanti’s Current Account

 

79,000

1,70,000

34,000

79,000

17,000

 

 

3,79,000

  3,79,000

On the above date the firm was dissolved:

1. Kumar took over 50% of stock at 10% less than its book value. The remaining stock was sold for Rs 10,000.
2. Debtors were realized at a discount of 5%.
3. An unrecorded asset was sold for Rs 9,000 and machinery was sold for Rs 18,000.
4. Creditors were paid in full.
5. There was an outstanding bill for repairs for amounting to Rs 14,000 which was settled at Rs 12,000.

Prepare Realisation Account


Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals. On the 31st March 2013 their Balance Sheet was as follows:

Balance Sheet of Hanif and Jubed as on 31st March 2013
Liabilities Rs Assets Rs

Creditors

Workman Companion Fund

General Reserve

Hanif’s Current Account

Capital's:

   Hanif      10,00,000

   Jubed       5,00,000

1,50,000

3,00,000

75,000

25,000

 

 

15,00,000

Bank

Debtors

Stock

 

Furniture

Machinery

Jubed’s Current Account

2,00,000

3,40,000

1,50,000

 

4,60,000

8,20,000

80,000

  20,50,000   20,50,000

On the above date the firm was dissolved:

a. Debtors were realised at a discount of 5%, 50% of the stock was taken over by Hanif at 10% less than the book value. Remaining stock was sold for Rs 65,000.
b. Furniture was taken over by Jubed for Rs 1,35,000. Machinery was sold as scrap for Rs 74,000.
c. Creditors were paid in full.
d. Expenses on realisation Rs 8,000 were paid by Hanif.

Prepare Realisation Account.


Pass the necessary journal entries for the following transaction of the dissolution of the firm of James and Haider who were sharing profits and losses in the ratio of 2 : 1.

The various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

(i) James agreed to pay off his brother’s loan Rs 10,000

(ii) Debtors realized Rs 12,000

(iii) Haider took over all investment at Rs 12,000

(iv) Sundry creditors Rs 20,000 were paid at 5% discount

(v) Realisation expenses amounted to Rs 2,000

(vi) Loss on realization was Rs 10,200.


Niyati, Kartik, and Ratik were partners in firm sharing profits and losses in the ratio of 5 : 3: 2. The firm was dissolved on 31st March 2019 by the order of the court. After transfer of assets (other than cash) and external liabilities to Realization Account, the following transactions took place:
(a) An unrecorded liability of the firm of ₹ 45,000 was paid by Niyati.
(b) Creditors, to whom ₹ 67,000 were due to be paid, accepted furniture at ₹ 35,000 and the balance was paid to them in cash.
(c) Kartik had given a loan of ₹ 18,000 to the firm which was paid to him.
(d) Stock worth ₹ 85,000 was taken over by Ratik at ₹ 72,000.
(e) Expenses on dissolution amounted to ₹ 6,000 and were paid by Kartik.
(f) Loss on dissolution amounted to ₹ 40,000.
Pass the necessary journal entries for the above transactions in the books of the firm.


At the time of dissolution of a partnership firm, its Balance Sheet showed the stock of ₹ 30,000 comprising easily marketable items, obsolete items and a few miscellaneous other items. These items were realized as:

  • Easily Marketable Items: 65% of the total inventory in full.
  • Obsolete items: 20% of the total inventory had to be discarded.
  • The miscellaneous other items in the stock are at 40% of their book value.

You are required to pass the journal entry for the realisation of stock.


Sita and Gita were partners sharing profits and losses in the ratio of 4 : 5. They dissolved their partnership on 31st March, 2021, when their Balance Sheet showed the following balances:

Particulars (₹)
Sita’s Capital 30,000
Gita’s Capital 35,000
Gita’s Current A/c (Dr) 2,000
Contingency Reserve 18,000
P/L A/c (Dr) 4,500

On the date of dissolution:

  1. The firm, upon realisation of assets and settlement of liabilities, made a profit of ₹ 9,000.
  2. Gita paid the realisation expenses of ₹ 2,000.
  3. Gita discharged the outstanding salary of the manager of the firm of ₹ 1,000 which was unrecorded in the books.

You are required to prepare the Partners’ Capital Accounts.


When is Realisation Account opened?


Consider the following statements

Statement 1: At the time of dissolution of Partnership Firm all assets should be transferred to Realisation A/c.

Statement 2: All assets except the cash or bank balances are transferred to the Realisation Account.


Where would the interest on capital be recorded if the fixed capital account is followed in the partnership firm?


Unrecorded liability when paid on the dissolution of a firm is transferred to ______


On dissolution of the firm, the amount received from the sale of the unrecorded asset is credited to ______.


Pick the odd one out:


On dissolution, the final balance of the Partner's Capital Account is transferred to ______.


If goodwill is already appearing in the books of accounts at the time of retirement of a partner, then it should be written off in ______.


On dissolution of a firm, realisation account is debited with:


If in case of dissolution of the partnership, there was no Workmen Compensation Fund and firm had to pay ₹ 3,000 as compensation to workers where will be this ₹ 3,000 recorded in the books of accounts?


Give the necessary Journal entries for the following transactions on dissolution of the firm of Sonu and Monu on 31st March, 2021, after transfer of various assets (other than cash and bank balance) and the third party liabilities to Realisation Account. They shared profits and losses in the ratio of 2 : 1.

  1. Sonu agreed to take over the firm's goodwill (not recorded in the books of the firm) at a valuation of ₹ 40,000.
  2. Bills payable of ₹ 30,000 falling due on 30th April, 2021 were discharged at ₹ 29,550.
  3. Stock worth ₹ 8,00,000 was taken over by partner, Sonu at 10% discount.
  4. Creditors off ₹ 2,00,000 accepted machinery valued at ₹ 2,20,000 in full settlement of their claim.
  5. Expenses of realisation ₹ 10,000 were paid by partner, Sonu.

Anu, Bhanu and Charu were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Anu decided to retire from the firm on 31st March, 2021. The balance sheet of the firm on that date was as follows:

Balance sheet of Anu, Bhanu and Charu
as on 31st March, 2021:
Liabilities   Amount (₹) Assets   Amount (₹)
Creditors   24,000 Bank   10,000
Profit & Loss A/c   5,000 Debtors 20,000 19,600
Capitals:     Less: Provision for
Doubtful debts
400
Anu 31,000 83,000 Stock   27,000
Bhanu 30,000 Investments   10,000
Charu 22,000 Patents   2,400
      Premises   43,000
    1,12,000     1,12,000

On retirement of Anu, following terms were agreed upon:

  1. Anu sold her share of premium for goodwill to Bhanu for ₹ 6,000 and to Charu for ₹ 3,000.
  2. Provision for doubtful debts was to be raised to 5% on debtors.
  3. Patents were considered valueless.
  4. Anu was paid ₹ 9,600 through a cheque and balance was transferred to her Loan A/c.

Prepare Revaluation Account and Anu's Capital Account on her retirement.


T, U and V were partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. Their firm was incurring huge losses thus it had to be closed. After transferring assets (other than cash in hand and bank) and third party liabilities to Realization Account the following transactions took place:

  1. T took away 50% of the stock at book value less 10% for ₹ 90,000, and the remaining stock was sold for ₹ 40,000.
  2. Creditors of ₹ 78,000 took over machinery of ₹ 80,000 in full settlement of their claim.
  3. ₹ 5,000 debtors previously written off were recovered.
  4. Mrs. V's loan of ₹ 72,000 was paid by the firm.
  5. Loss on dissolution was ₹ 80,000.

Pass necessary journal entries for the above transactions in the book of T. U and V.


G and M were partners in a firm sharing profits and losses in the ratio of 3 : 2. on 31st March 2022, their balance sheet was as follows:

Balance Sheet of G and M as on 31st March, 2022
Liabilities Amount (₹) Amount (₹) Assets Amount (₹)
Creditors   50,000 Bank 75,000
Outstanding Expenses   45,000 Other Current Assets 4,80,000
Provision for Doubtful Debts   5,000 Machinery 7,00,000
9% Loan   15,00,000 Land and Building 15,00,000
Capitals:     Patents 10,000
G 6,00,000   Profit and Loss Account 15,000
M 7,00,000   Goodwill 1,20,000
Total 29,00,000   Total 29,00,000

On the above date, the firm was dissolved. Other current assets realised 10% less. Land and building and machinery were sold at their book value. 9% loan was discharged with unrecorded interest of ₹1,35,000. Expenses on dissolution amounted to ₹10,000.

Prepare Realisation Account.


On dissolution of the partnership firm of A, B and C, the accumulated profits of ₹ 40,000 will be transferred to which of the following account? 


C, D, E were partners in a firm sharing profits in the ratio of 3 :1: 1. Their Balance Sheet as at 31st March, 2022 were as follows:

 Balance Sheet of C, D and E as at 31st March,2022  
Liabilities Amount (₹) Amount (₹) Assets Amount (₹)
Capitals:      Machinery 3,20,000
C 4,00,000 7,00,000 Investments 3,00,000
D 2,00,000 Stock 2,00,000
E 1,00,000 Debtors 1,00,000
C's Loan   1,20,000 Cash at Bank 2,00,000
Sundry Creditors   1,00,000    
Bills Payable   2,00,000    
    11,20,000   11,20,000

On the above date the firm was dissolved due to certain disagreements among the partners:

  1. Machinery of ₹ 3,00,000 were given to creditor in full settlement of their amount and remaining machinery was sold for  ₹ 10,000.
  2. Investments realised ₹ 2,90,000.
  3. Stock was sold for  ₹  1,80,000.
  4. Debtors for ₹ 20,000 proved bad.
  5. Realisation expenses amounted at ₹  10,000

Prepare Realisation Account.


On the dissolution of the firm, Partner Rex agreed to take over the responsibility of completing the dissolution work at an agreed remuneration of ₹ 1000 and to bear all realisation expenses. The actual realisation expenses amounted to ₹ 1,300 which were paid by the firm on Rex's behalf.

What amount will be debited by the firm to the Realisation Account?


Adit and Shiv were partners sharing profits and losses in the ratio of 5 : 4. They dissolved their partnership firm on 31st March 2023, when their Balance Sheet showed the following balances:

Particulars (₹)
Adit's Capital 40,000
Shiv's Capital 30,000
Adit's Current A/c (Cr.) 3,000
Loan by the firm to Shiv 22,000
Profit & Loss Account (Dr.) 4,500

On the date of dissolution of the firm:

  1. The firm suffered a loss of ₹ 18,000 upon realisation of assets and settlement of liabilities.
  2. The expenses of dissolution of ₹ 3,000, to be borne by Shiv, were paid by the firm on his behalf.
  3. The firm had furniture of ₹ 15,000. Adit took over some pieces of the furniture at ₹ 9,000 (being 10% less than the book value). Shiv took over the remaining furniture at 80% of its book value.

You are required to prepare the Partners Capital Accounts.


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