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The Partnership Between A And B Was Dissolved on 31st March, 2019. - Accountancy

Numerical

The partnership between A and B was dissolved on 31st March, 2019. On that date the respective credits to the capitals were A − ₹ 1,70,000 and B − ₹ 30,000. ₹ 20,000 were owed by B to the firm; ₹ 1,00,000 were owed by the firm to A and ₹ 2,00,000 were due to the Trade Creditors. Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B.
The assets represented by the above stated net liabilities realise ₹ 4,50,000 exclusive of ₹ 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners' Capital Accounts and Cash Account showing the distribution to the partners.

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Solution

Realisation Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Sundry Assets (WN)

4,80,000

Trade Creditors

2,00,000

B’s Loan

20,000

 

 

 

 

Cash (Assets realised)

4,50,000

Cash A/c (Creditors)        

2,00,000

B’s Capital A/c (B’s Loan)

20,000

 

 

Loss transferred to:

 

 

 

A’s Capital A/c

20,000

 

 

 

B’s Capital A/c

10,000

30,000

 

7,00,000

 

7,00,000

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

Particulars

A

B

Realisation A/c

20,000

Balance b/d

1,70,000

30,000

Realisation A/c (Loss)

20,000

10,000

 

 

 

Cash A/c

1,50,000

 

 

 

 

 

1,70,000

30,000

 

1,70,000

30,000

 

Cash Account

Dr.

 

Cr.

Particulars

Amount

(₹)

Particulars

Amount

(₹)

Realisation A/c (Assets)

4,50,000

Realisation A/c (Creditors)

2,00,000

 

 

A’s Capital A/c

1,50,000

 

 

A’s Loan A/c

1,00,000

 

4,50,000

 

4,50,000


Working Notes:
 

Memorandum Balance Sheet
as at 31st March, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Capital A/cs:

 

B’s Loan

20,000

A

1,70,000

 

 

 

B

30,000

2,00,000

Sundry Assets

4,80,000

A’s Loan

1,00,000

(Balancing figure)

 

Trade Creditors

2,00,000

 

 

 

5,00,000

 

5,00,000

Concept: Accounting Treatment of Bill - Journal Entries and Ledger
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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 51 | Page 68
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