Question

The following is the Balance Sheet of partners Aarti and Akanksha as on 31st March, 2019:

Liabilities	Amt. (₹)	Assets		Amt. (₹)
Capital:	12,000	Furniture		12,000
Aarti		Patents		2,400
Akanksha	10,000	Goodwill		4,000
General Reserve	4,000	Debtors	7,600	7,200
Aarti’s Loan A/c	4,000	Less: R.D.D.	400
Creditors	6,000	Stock		10,000
Bills Payable	2,000	Bank		2,400
	38,000			38,000

On 1st April, 2019 the firm was dissolved:

1. Aarti took over patents at a value of ₹ 4,000.
2. The assets were realised as under:
   Furniture ₹ 13,000; Goodwill ₹ 6,000; Stock ₹ 8,000 and Debtors ₹ 6,000.
3. Creditors were paid off at a discount of 10% and other liabilities were paid in full.
4. Expenses for realisation amounted to ₹ 3,000 which were borne by Akanksha.

Prepare:

1. Realisation Account
2. Partner’s Capital Account
3. Bank Account

Answer 1

In the books of Partnership Firm
Dr.	Realisation Account				Cr.
Particulars	Amt. (₹)	Amt. (₹)	Particulars	Amt. (₹)	Amt. (₹)
To Sundry Assets:	12,000	36,000	By Sundry Liabilities:	6,000	8,000
Furniture			Creditors
Patents	2,400		Bills Payable	2,000
Goodwill	4,000		By R.D.D. A/c		400
Debtors	7,600		By Aarti’s Capital A/c (Patent taken over)		4,000
Stocks	10,000		By Bank A/c:	13,000	33,000
To Bank A/c:	5,400	7,400	Furniture
Creditors			Goodwill	6,000
Bills Payable	2,000		Stock	8,000
To Akanksha’s Capital A/c (Expenses paid)		3,000	Debtors	6,000
			By Partner’s Capital A/c:	500	1,000
			Aarti
			Akanksha	500
		46,400			46,400

 

Dr.	Partner’s Capital Accounts				Cr.
Particulars	Aarti (₹)	Akanksha (₹)	Particulars	Aarti (₹)	Akanksha (₹)
To Realisation A/c (Loss)	500	500	By Balance b/d	12,000	10,000
To Realisation A/c (Patent taken over)	4,000	-	By General Reserve (Transfer)	2,000	2,000
To Bank A/c (Final settlement)	9,500	14,500	To Realisation A/c (Expenses paid)	-	3,000
	14,000	15,000		14,000	15,000

 

Dr.	Bank Account		Cr.
Particulars	Amt. (₹)	Particulars	Amt. (₹)
To Balance b/d	2,400	By Realisation A/c (liabilities paid)	7,400
To Realisation A/c (Assets realised)	33,000	By Aarti’s Loan A/c (Loan paid)	4,000
		By Aarti’s Capital Ale (Final settlement)	9,500
		By Akanksha’s Capital A/c (Final settlement)	14,500
	35,400		35,400

Working Notes:

(1) Amount paid to Creditors = Book Value − 10% of Book Value

= `6,000 - 10/100 xx 6,000`

= 6,000 − 600

= ₹ 5,400

(2) Realisation expenses paid by Akanksha are debited to Realisation A/c and credited to Akanksha’s Capital A/c.

(3) Patents taken over by Aarti are debited to Aarti’s Capital A/c and credited to Realisation A/c.