The following is the balance sheet of A and B as at 31st March, 2014:
liabilities:-
Mrs. A's Loan - 15000
Mrs. B' Loan - 10000
Trade Creditors - 30000
Bills Payable - 10000
Outstanding Expenses - 5000
A: Capital - 100000
B: Capital - 80000
Total= 250000
Assets:-
Cash - 4200
Bank - 3400
Debtors: 30000
Less: Provision - 2000
Investments - 10000
Stock - 40000
Truck - 75000
Plant and Machinery - 80000
B : Drawings - 9400
Total 250000
Adjustments---
1) Half of the stock was sold at 10% less than the book value and the remaining half was taken over by A at 20% more than the book value.
2) During the course of dissolution a liability under action for damages was settled at 12000 against 10000 included in the creditors.
3) Assets realised as follows-
Plant machinery- 100000 ; Truck-120000; Goodwill was sold for 25000 ; Bad Debts amounted to 5000 ; Half the investments were sold at book value.
4) A promised to pay off Mrs.A's Loan and took away half the investments at 10% discount.
5) Trade Creditors and Bills Payable were due on average basis of one month after 31st march, but were paid immediately on 31st march, at 12% discount p.a.
Prepare Necessary Accounts
Hey Nikita,
The solution to your query is provided below:
Realisation Account |
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Dr. |
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Cr. |
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Particulars |
Amount Rs |
Particulars |
Amount Rs |
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Sundry Assets |
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Sundry Liabilities |
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Stock |
40,000 |
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Outstanding Expenses |
5,000 |
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Investment |
10,000 |
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Bills Payable |
10,000 |
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Debtors |
30,000 |
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Mrs. A’s Loan |
15,000 |
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Truck |
75,000 |
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Mrs. B’s Loan |
10,000 |
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Plant and Machinery |
80,000 |
2,35,000 |
Provision for bad and doubtful debts |
2,000 |
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Trade Creditors |
30,000 |
72,000 |
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A’s Capital A/c (Mrs. A’s Loan) |
15,000 |
A’s Capital A/c |
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Investments |
5,000 |
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50% Stock |
22,000 |
27,000 |
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Bank A/c- |
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Outstanding Expenses |
5,000 |
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Bank A/c- |
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Remaining Creditors |
19,800 |
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Debtors |
25,000 |
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Liability for damages |
12,000 |
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50% Stock |
18,000 |
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Bills Payable |
9,900 |
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Plant |
1,00,000 |
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Mrs. B’s Loan |
10,000 |
56,700 |
Truck |
1,20,000 |
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Goodwill |
25,000 |
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Profit transferred to- |
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Investments |
5,000 |
2,75,000 |
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A’s Capital A/c |
33,650 |
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B’s Capital A/c |
33,650 |
67,300 |
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3,74,000 |
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3,74,000 |
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Partners’ Capital Accounts |
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Dr. |
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Cr. |
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Particulars |
A |
B |
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Particulars |
A |
B |
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Realisation A/c |
27,000 |
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Balance b/d |
1,00,000 |
80,000 |
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Drawings A/c |
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9,400 |
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Realisation A/c |
15,000 |
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Bank A/c |
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Realisation A/c (Profit) |
33,650 |
33,650 |
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1,21,650 |
1,04,250 |
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1,48,650 |
1,13,650 |
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Cash and Bank Account |
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Dr. |
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Cr. |
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Particulars |
Amount Rs |
Particulars |
Amount Rs |
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Balance b/d (8,000+500) |
7,600 |
Realisation A/c |
56,700 |
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Realisation A/c |
2,75,000 |
A’s Capital A/c |
1,21,650 |
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B’s Capital A/c |
1,04,250 |
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2,82,600 |
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2,82,600 |
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Hope this answers your query.
Keep posting for further doubts!!