The following is the balance sheet of A and B as on 31.12.1993:
laibilities amount asset amount
creditors 30,000 cash 500
B/p 8,000 Bank 8,000
mrs.A's loan 5,000 stock 5,000
mrs b's loan 10,000 investment 10,000
general reserve 10,000 debtors 20,000-2,000(provision) 18,000
IFF 1,000 plant 20,000
a's capital 10,000 building 15,000
B's capital 10,000 goodwill 4,000
advertisement suspense 3,500
84,000 84000
The firm was dissolved on 31.12.1993 on the following terms:
- A promised to pay Mrs. A's loan and took away stock at Rs.4,000
- B took away half of the investments at 10% discount.
- debtors realised Rs.19,000
- Creditors B/P were due on an average basis of one monthafter 31 december but they were paid immediately on 31december at 6% discount p.a.
- plant realised Rs.25,000 , building Rs. 40,000, goodwill Rs.6,000 and remaining investments at Rs 4,500
- There was an old typewriter in the firm which had been written off completely from the books, it was estimated to realize Rs.300, it was taken away by B at this estimated price
- you are required to prepare the realisation A/c, partner's capital A/c and bank A/c to close books of the firm
Dear Student,
The solution to your question is provided below:
Realisation Account |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||||
Sundry Assets |
|
Sundry Liabilities |
|
||||
Stock |
5,000 |
|
Creditors |
30,000 |
|
||
Investment |
10,000 |
|
Bills Payable |
8,000 |
|
||
Debtors |
20,000 |
|
Mrs. A’s Loan |
5,000 |
|
||
Plant |
20,000 |
|
Mrs. B’s Loan |
10,000 |
|
||
Building |
15,000 |
|
Investment Fluctuation Fund (IFF) |
1,000 |
|
||
Goodwill |
4,000 |
74,000 |
Provision for bad and doubtful debts |
2,000 |
56,000 |
||
|
|
|
|
||||
A’s Capital A/c (Mrs. A’s Loan) |
5,000 |
A’s Capital A/c (Stock) |
4,000 |
||||
|
|
B’s Capital A/c (Half investments and Typewriter) |
4,800 |
||||
Bank A/c- |
|
Bank A/c- |
|
||||
Creditors |
29,850 |
|
Debtors |
19,000 |
|
||
Bills Payable |
7,960 |
|
Plant |
25,000 |
|
||
Mrs. B’s Loan |
10,000 |
47,810 |
Building |
40,000 |
|
||
|
|
Goodwill |
6,000 |
|
|||
Profit transferred to- |
|
Investments |
4,500 |
94,500 |
|||
A’s Capital A/c |
16,245 |
|
|
|
|||
B’s Capital A/c |
16,245 |
32,490 |
|
|
|||
|
|
|
|
||||
|
1,59,300 |
|
1,59,300 |
||||
|
|
|
|
Partners’ Capital Accounts |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
A |
B |
Particulars |
A |
B |
|
||
|
|
|
|
|
|
|
||
Realisation A/c |
4,000 |
4,800 |
Balance b/d |
10,000 |
10,000 |
|
||
Advertisement suspense A/c |
1,750 |
1,750 |
Realisation A/c |
5,000 |
|
|
||
|
|
|
General Reserve |
5,000 |
5,000 |
|
||
Bank A/c |
30,495 |
24,695 |
Realisation A/c (Profit) |
16,245 |
16,245 |
|
||
|
|
|
|
|
|
|
||
|
31,245 |
26,245 |
|
36,245 |
31,245 |
|
||
|
|
|
|
|
|
|
||
Cash and Bank Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
||
|
|
|
|
||
Balance b/d (8,000+500) |
8,500 |
Realisation A/c |
47,810 |
||
Realisation A/c |
94,500 |
A’s Capital A/c |
30,495 |
||
|
|
B’s Capital A/c |
24,695 |
||
|
|
|
|
||
|
1,03,000 |
|
1,03,000 |
||
|
|
|
|
Hope this answers your query.
Keep posting and keep studying!!