# X, Y And Z Entered into Partnership on 1st April, 2016. They Contributed Capital ₹ 40,000, ₹ 30,000 And ₹ 20,000 Respectively - Accountancy

Numerical

X, Y and Z entered into partnership on 1st April, 2016. They contributed capital ₹ 40,000, ₹ 30,000 and ₹ 20,000 respectively and agreed to share profits in the ratio of 3 : 2 : 1. Interest on capital was to be allowed @ 15% p.a. and interest on drawings was to be charged at an average rate of 5%. During the two years ended 31st March, 2018, the firm made profit of ₹ 21,600 and ₹ 25,140 respectively before allowing or charging interest on capital and drawings. The drawings of each partner were ₹ 6,000 per year.
On 31st March, 2018, the partners decided to dissolve the partnership due to difference of opinion. On that date, the creditors amounted to ₹ 20,000. The assets, other than cash ₹ 2,000, realised ₹ 1,21,000. Expenses of dissolution amounted to ₹ 760.
Draw up necessary Ledger Accounts to close the books of the firm.

#### Solution

Profit and Loss Appropriation

for the year ended March 31, 2017

 Dr. Cr. Particulars Amount Rs Particulars Amount Rs Interest on Capital A/c: Profit and Loss A/c 21,600 X    (40,000 × 15%) 6,000 Interest on Drawings Y (30,000 × 15%) 4,500 X (6,000 × 5%) 300 Z (20,000 × 15%) 3,000 13,500 Y (6,000 × 5%) 300 Z (6,000 × 5%) 300 900 Profit transferred to: X’s Capital A/c 4,500 Y’s Capital A/c 3,000 Z’s Capital A/c 1,500 9,000 22,500 22,500

Partners’ Capital Accounts

for the year 2016-17

 Dr. Cr. Particulars X Y Z Particulars X Y Z Drawings A/c 6,000 6,000 6,000 Cash A/c 40,000 30,000 20,000 Interest on Drawings 300 300 300 Interest on Capital A/c 6,000 4,500 3,000 P/L Appropriation A/c 4,500 3,000 1,500 Balance c/d 44,200 31,200 18,200 50,500 37,500 24,500 50,500 37,500 24,500

Profit and Loss Appropriation Account

for the year ended March 31, 2018

 Dr. Cr. Particulars Amount Rs Particulars Amount Rs Interest on Capital  A/c Profit and Loss 25,140 X (44,200 × 15%) 6,630 Interest on Drawings Y (31,200 × 15%) 4,680 X (6,000 × 5%) 300 Z (18,200 × 15%) 2,730 14,040 Y (6,000 × 5%) 300 Profit transferred to : Z (6,000 × 5%) 300 900 X’s Capital A/c 6,000 Y’s Capital A/c 4,000 Z’s Capital A/c 2,000 12,000 26,040 26,040

Partners’ Capital Accounts

for the year ended March 31,2018

 Particulars X Y Z Particulars X Y Z Drawings A/c 6,000 6,000 6,000 Balance b/d 44,200 31,200 18,200 Interest on Drawing 300 300 300 Interest on Capital A/c 6,630 4,680 2,730 Balance c/d 50,530 33,580 16,630 P/L Appropriation A/c 6,000 4,000 2,000 56,830 39,880 22,930 56,830 39,880 22,930 Balance b/d 50,530 33,580 16,630 Cash A/c 51,280 34,080 16,880 Realisation A/c (Profit) 750 500 250 51,280 34,080 16880 51,280 34,080 16,880

Realisation Account

 Dr. Cr. Particulars Amount Rs Particulars Amount Rs Sundry Assets 1,18,740 Creditors 20,000 Cash A/c: Cash (Assets realised) 1,21,000 Creditors 20,000 Expanses 760 20,760 Profit transferred to: X’s Capital A/c 750 Y’s Capital A/c 500 Z’s Capital A/c 250 1,500 1,41,000 1,41,000

Partners’ Capital Accounts

 Dr. Cr. Particulars X Y Z Particulars X Y Z Balance b/d 50,530 33,580 16,630 Cash A/c 51,280 34,080 16,880 Realisation A/c (Profit) 750 500 250 51,280 34,080 16880 51,280 34,080 16,880

Cash Account

 Dr. Cr. Particulars Amount Rs Particulars Amount Rs Balance b/d 2,000 Realisation A/c 20,760 Realisation A/c 1,21,000 X’s Capital A/c 51,280 Y’s Capital A/c 34,080 Z’s Capital A/c 16,880 1,23,000 1,23,000

Memorandum Balance Sheet

as on March 31, 2018

 Liabilities Amount Rs Assets Amount Rs Capital A/cs: Cash 2,000 X 50,530 Sundry Assets 1,18,740 Y 33,580 Z 16,630 1,00,740 Creditors 20,000 1,20,740 1,20,740
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 54 | Page 68