Question

A, B and C are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2018, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:
During the course of realisation, a liability under a suit for damages is settled at ₹ 20,000 as against ₹ 5,000 only provided for in the books of the firm.
Land and Building were sold for ₹ 40,000 and the Stock and Sundry Debtors realised ₹ 30,000 and ₹ 42,000 respectively. The expenses of realisation amounted to ₹ 1,200.
There was a car in the firm, which was completely written off from the books. Ir was taken over by A for ₹ 20,000. He also agreed to pay Outstanding Salary of ₹ 20,000 not provided in books.
Prepare Realisation Account, Partners Capital Accounts and Bank Account in the books of the firm.

Answer 1

The Realisation Account, Partner’s Capital Accounts and Bank Account are calculated and prepared below:

Explanation:

REALISATION ACCOUNT:

Particulars (Dr.)

To Land and Building A/c - Rs. 57000

To Stock A/c  - Rs. 50000

To A's Salary A/c - Rs. 20000

To Sundry Debtors A/c  - Rs. 50000

To Bank A/c

• Creditors (40,000+15,000) - Rs. 55000
• Expenses - Rs. 1200

Total = Rs. 56,200

Adding all, we get,

=57000 + 50000 + 20000 + 50000 + 56200

= Rs. 2,33,200

Particulars (Cr.)

By Creditors A/c - Rs. 40,000

By A's Capital A/c (car) - Rs. 20,000

• By Land and Building A/c - Rs. 40,000
• By Stock A/c - Rs. 30,000
• By Sundry Debtors A/c  - Rs. 42,000

Total = Rs. 1,12,000

By Loss transferred to:

• A's Capital A/c  - Rs. 30,600
• B's Capital A/c - Rs. 20,400
• C's Capital A/c - Rs. 10,200

Total = 61,200

Adding all, we get,

=40000 + 20000 + 112000 + 61200

= Rs. 2,33,200

As per the Parner's Capital Accounts,

The Dr. and the Cr. of A, B and C will be Rs. 90,500, Rs. 47,000 and Rs. 13,700 respectively.

The loan and the bank account are calculated and prepared below: