Question

Following is the Balance Sheet of Arvind and Balbir as at 31st March, 2018:
The firm was dissolved on the above date under the following arrangement:
(a) Arvind promised to pay off Mrs. Arvind’s Loan and took Stock at ₹ 6,000.
(b) Balbir took half the Investments @ 10% discount.
(c) Book Debts realised ₹ 28,500.
(d) Trade Creditors and Bills Payable were due on average basis of one month after 31st March,but were paid immediately on 31st March @ 2% discount per annum.
(e) Plant realised ₹ 37,500; Building ₹ 60,000; Goodwill ₹ 9,000 and remaining Investments ₹ 6,750.
(f) An old typewriter, written off completely from the firm’s books now estimated to realise ₹ 450. It was taken by Balbir at this estimated price.
(g) Realisation expenses were ₹ 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.

Answer 1

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The outcome of politics of social divisions

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statement

Answer 2

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

Explanation:

Calculating Realisation Account :

It is prepared by: moving all assets to the debit side of the account except Cash or Bank account.  Transferring all the liabilities to the credit side of the account except Partner's Loan Account and Partners' Capital Accounts. Crediting the receipt on the account's sale of assets.

Calculating Partner's Capital Account:

The opening capital account balance of a partner usually exceeds the amount of its contribution to the partnership. (i.e. cash + the total value of any qualified property).

Here,

Payment made to the creditors = Creditors - 2% discount for 1 month

= Rs. 45000 - Rs. 75 = Rs. 44925

Payment made to for the Bills payable = Bills payable  - 2% discount for 1 month

= Rs. 12000- Rs. 20= Rs. 11980