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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.

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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
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