The following is the Balance Sheet of Gupta and Sharma as on December 31,2012:

 

Balance Sheet of Gupta and Sharma as on December 31, 2012
Liabilities		Amount Rs	Assets	Amount Rs
Sundry Creditors		38,000	Cash at Bank	12,500
Mrs.Gupta’s loan		20,000	Sundry Debtors	55,000
Mrs.Sharma’s loan		30,000	Stock	44,000
Reserve fund		6,000	Bills Receivable	19,000
Provision of doubtful debts		4,000	Machinery	52,000
Capital			Investment	38,500
Gupta	90,000		Fixtures	27,000
Sharma	60,000	1,50,000
		2,48,000		2,48,000

 

The firm was dissolved on December 31, 2012 and asset realised and settlements of liabilities as follows:

(a) The Realisation of the assets were as follows:

	Rs
Sundry Debtors	52,000
Stock	42,000
Bills receivable	16,000
Machinery	49,000

(b) Investment was taken over by Gupta at agreed value of Rs 36,000 and agreed to pay of Mrs. Gupta’s loan.

(c) The Sundry Creditors were paid off less 3% discount.

(d) The Realisation expenses incurred amounted to Rs 1,200.

Journalise the entries to be made on the dissolution and prepare Realisation Account, Bank Account and Partners Capital Accounts.

 

 

Books of Gupta and Sharma

Journal

Date

Particulars

L.F.

Amount

Rs

Amount

Rs

2012

Dec. 31

Realisation A/c

Dr.

2,35,500

To Sundry Debtors A/c

55,000

To Stock A/c

44,000

To Bills Receivable A/c

19,000

To Machinery A/c

52,000

To Investment A/c

38,500

To Fixtures A/c

27,000

(Assets transferred to Realisation Account)

Dec. 31

Sundry Creditors A/c

Dr.

38,000

Mrs. Gupta’s Loan A/c

Dr.

20,000

Mrs. Sharma’s Loan A/c

Dr.

30,000

Provision for Doubtful Debts

Dr.

4,000

To Realisation A/c

92,000

(Liabilities transferred to Realisation Account)

Dec. 31

Bank A/c

Dr.

1,59,000

To Realisation A/c

1,59,000

(Assets realised: Sundry Debtors Rs 52,000, Stock Rs 42,000,

Bills Receivable Rs 16,000, Machinery Rs 49,000)

Dec. 31

Realisation A/c

Dr.

20,000

To Gupta’s Capital A/c

20,000

(Gupta took over Mrs. Gupta's Loan)

Dec. 31

Gupta’s Capital A/c

Dr.

36,000

To Realisation A/c

36,000

(Investment taken over by Gupta)

Dec. 31

Realisation A/c

Dr.

66,860

To Bank A/c

66,860

(Liabilities paid: Mrs. Sharma's Loan Rs 30,000 and Creditors

Rs 38,000 paid off less 3% discount)

Dec. 31

Realisation A/c

Dr.

1,200

To Bank A/c

1,200

(Realisation expenses paid)

Dec. 31

Gupta’s Capital A/c

Dr.

18,280

Sharma’s Capital A/c

Dr.

18,280

To Realisation A/c

36,560

(Loss on Realisation transferred to Partners’ capital Account)

Dec. 31

Reserve Fund A/c

Dr.

6,000

To Gupta’s Capital A/c

3,000

To Sharma’s Capital A/c

3,000

(Reserve fund distributed among partners ratio)

Dec. 31

Gupta’s Capital A/c

Dr.

58,720

Sharma’s Capital A/c

Dr.

44,720

To Bank A/c

1,03,440

(Final payment made to partners)

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Debtors

55,000

Sundry Creditors

38,000

Stock

44,000

Mrs. Gupta’s Loan

20,000

Bills Receivable

19,000

Mrs. Sharma’s Loan

30,000

Machinery

52,000

Provision for Doubtful Debts

4,000

Investment

38,500

Bank :

Fixtures

27,000

Sundry Debtors

52,000

Gupta’s Capital A/c (Mrs. Gupta Loan)

20,000

Stock

42,000

Bank A/c:

Bills Receivable

16,000

Creditors

36,860

Machinery

49,000

1,59,000

Mrs. Sharma’s Loan

30,000

Gupta’s Capital A/c (Investment)

36,000

Expense

1,200

68,060

Loss transferred to

Gupta’s Capital A/c

18,280

Sharma’s Capital A/c

18,280

36,560

3,23,560

3,23,560

Partners’ Capital Account

Dr.

Cr.

Particulars

Gupta

Sharma

Particulars

Gupta

Sharma

Realisation (Investment)

36,000

Balance b/d

90,000

60,000

Realisation (Loss)

18,280

18,280

Realisation (Mrs. Gupta Loan)

20,000

Bank

58,720

44,720

Reserve Fund

3,000

3,000

1,13,000

63,000

1,13,000

63,000

Bank Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

12,500

Realisation 

68,060

Realisation (Assets realised)

1,59,000

(Payment of expenses and liabilities)

Gupta’s Capital A/c

58,720

Sharma’s Capital A/c

44,720

1,71,500

1,71,500