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

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Assets

 

Sundry Liabilities

 

Stock

40,000

 

Outstanding Expenses

5,000

 

Investment

10,000

 

Bills Payable

10,000

 

Debtors

30,000

 

Mrs. A’s Loan

15,000

 

Truck

75,000

 

Mrs. B’s Loan

10,000

 

Plant and Machinery

80,000

2,35,000

Provision for bad and doubtful debts

2,000

 

 

 

Trade Creditors

30,000

72,000

 

 

 

 

A’s Capital A/c (Mrs. A’s Loan)

15,000

A’s Capital A/c

 

 

 

Investments

5,000

 

 

 

50% Stock

22,000

27,000

Bank A/c-

 

 

 

Outstanding Expenses

5,000

 

Bank A/c-

 

Remaining Creditors

19,800

 

Debtors

25,000

 

Liability for damages

12,000

 

50% Stock

18,000

 

Bills Payable

9,900

 

Plant

1,00,000

 

Mrs. B’s Loan

10,000

56,700

Truck

1,20,000

 

 

 

Goodwill

25,000

 

Profit transferred to-

 

Investments

5,000

2,75,000

A’s Capital A/c

33,650

 

 

 

B’s Capital A/c

33,650

67,300

 

 

 

 

 

 

 

3,74,000

 

3,74,000

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

 

Particulars

A

B

 

 

 

 

 

 

 

 

 

Realisation A/c

27,000

 

 

Balance b/d

1,00,000

80,000

 

Drawings A/c

 

9,400

 

Realisation A/c

15,000

 

 

Bank A/c

 

 

 

Realisation A/c (Profit)

33,650

33,650

 

 

 

 

 

 

 

 

 

 

1,21,650

1,04,250

 

 

1,48,650

1,13,650

 

 

 

 

 

 

 

 

 

Cash and Bank Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

 

 

 

 

Balance b/d (8,000+500)

7,600

Realisation A/c

56,700

Realisation A/c

2,75,000

A’s Capital A/c

1,21,650

 

 

B’s Capital A/c

1,04,250

 

 

 

 

 

2,82,600

 

2,82,600

 

 

 

 

Hope this answers your query.

Keep posting for further doubts!!

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