Following is the balance sheet of ramji and panna
LIABILITIES
Ramji Capital 16000 Panna capital 10000 Reserve 3600 Creditors 5400 b/p 2600
ASSETS
Goodwill 4000 Machinery 6000 Plant 12800
Debtor 10800
Less provision 800 = 10000
Bank 4800
They decided to dissolve the firm
Asset realised as follow
Machinery 10% less than book value . plant 12000 godwill 2520
Ramji is to take over debtor amounting to 6800 at 6000,remaining debtor were realised for 90% of the book value
One bill of 600 under discount having been dishonoured had to be taken up by them(explain clearly in wn)
The bp of 2600 to be assumed by panna at that figure
Creditors are paid off at discount of 10% the liquidation expenses amounted to 400
Prepare realisation partner capital and cash a/c

Priya. the solution of your query is here. 
 

Realisation Account
Dr.   Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Assets   Liabilities  
Goodwill 4,000   Creditors 5,400  
Machinery 6,000   Bills Payable 2,600  
Plant 12,800   Provisions 800 8,800
Debtors 10,800 33,600    
    Bank A/c  
Bank A/c     Machinery 5,400  
Creditors 4,860   Plant 12,000  
Expenses 400   Goodwill 2,520  
Unrecorded Bill 600 5,860 Debtors 3,600 23,520
Panna’s Capital A/c 2,600 Ramji’s Capital A/c 6,000
    Loss transferred to:  
    Ramji’s Capital A/c 1,870  
    Panna’s Capital A/c 1,870 3,740
  38,320   38,320
       
               
 
Partners’ Capital Account
Dr.   Cr.
Particulars Ramji Paana Particulars Ramji Paana
Realisation A/c 6,000   Balance b/d 16,000 10,000
Revaluation A/c (Loss) 1,870 1,870 General Reserve 1,800 1,800
      Realisation A/c   2,600
Cash A/c 9930 12,530      
  17,800 14,400   17,800 14,400
           
               
 
Bank Account
Dr.   Cr.
Particulars Amount
Rs
Particulars Amount
Rs
Balance b/d 4,800 Realisation A/c 5,860
Realisation A/c 23,520 Ramji’s Capital A/c 9,930
    Panna’s Capital A/c 12,530
  28,320   28,320
       

Note:  'Bill of 600 under discount having been discounted has to be taken up by the them', represents the unrecorded liability for the firm. It implies  that a bill payable has been discounted by its drawer and to be paid now. 

  • 5
What are you looking for?