Question

Following is the Balance Sheet of Vishnu, Sanjiv and Sudhir as at 31st March, 2018:
Profit-sharing ratio of the partners is 5 : 3 : 2. At the above date, the partners decided to dissolve the firm.
The assets were realised as follows:
Bill Receivable were realised at a discount of 5%. All Debtors were good. Stock realised ₹ 22,000. Land and Building realised 40% higher than the book value. Furniture was sold for ₹ 8,000 by auction and auctioneer’s commission amounted to ₹ 500.
Computers were taken by Vishnu for ana greed valuation of ₹ 3,000. Investments were sold in the open market at a price of ₹ 45,000 for which commission of ₹ 600 was paid to the broker.
Bills Payable were paid at full amount. Creditors however agreed to accept 10% less. All other liabilities were paid off at their book value.
The firm retrenched their employees three months before the dissolution of the firm and firm had to pay ₹ 20,000 as compensation.
Prepare Realisation Account, Partners Capital Accounts and Cash Account.

Answer 1

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,

As per the Partner's Capital Account,

The Dr. and the Cr. of Vishnu, Sanjiv and Sudhir are Rs. 58,550, Rs. 41,130 and Rs. 25,420 respectively.