Question

A, B and C were equal partners. On 31st March, 2018, their Balance Sheet stood as:
The firm was dissolved on the above date on the following terms:
(a) For the purpose of dissolution, Investments were valued at ₹ 18,000 and A took over the Investments at this value.
(b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
(c) Expenses of realisation amounted to ₹ 1,300.
(d) Creditors allowed a discount of ₹ 800.
(e) One Bill receivable for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay anything and hence the bill had to be met by the firm.
Prepare Realisation Account, Partner’s Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.

Answer 1

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

Explanation:

REALISATION ACCOUNT:

Particulars (Dr.)

To Stock A/c  - Rs. 20,100

To Debtors A/c  - Rs. 62,600

To Investments A/c  - Rs. 16,000

To Furniture A/c  - Rs. 6,500

To Building A/c  - Rs. 23,500

To Cash A/c

• Expenses - Rs. 1,300
• Creditors  - Rs. 49,600
• Bills - Rs. 1,500

Total = Rs. 52,400

Adding all, we get,

= 20100 + 62600 + 16000 + 6500 + 23500 + 52400

= Rs. 1,81,100

Particulars (Cr.)

By Creditors A/c - Rs. 50,400

By A's Capital A/c (Investments) - Rs. 18,000

By Cash A/c:

• Furniture and Building  - Rs. 29,700
• Stock and Debtors  - Rs. 80,000

Total = Rs. 1,09,700

By Loss transferred to:

• A's Capital A/c  - Rs. 1000
• B's Capital A/c  - Rs. 1000
• C's Capital A/c - Rs. 1000

Total = Rs. 3000

Adding all, we get,

= 50400 + 18000 + 109700 + 3000

= Rs. 1,81,100

As per the Parner's Capital Accounts,

The Dr. and the Cr. of P, Q and R will be Rs. 34,000, Rs. 29,000 and Rs. 19,000 respectively.

The cash account are calculated and prepared below: