prakash, Kiran and Rishab are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Their Balance Sheet as on 31st March 2014 Stood as follows :
Balance sheet
as on 31st March, 2014
LiabilitiesRs.AssetsRs.Creditors
25,000
Cash at Bank
2,000
Bills Payable10,000Debtors20,000 General Reserve27,000Less ; Provision for Bad Debts(2,000)18,000Workmen's Compensation Fund3,000Stock25,200Mrs. Prakash's Loan5,000Investments20,000Capital A/cs : Bills Receivable8,000 Prakash60,000 Machinery60,000 Kiran40,0001,00,000Goodwill6,000 Profit & Loss A/c19,800 Rishab's Capital A/c11,000 1,70,000 1,70,000
On the above date, the firm was dissolved and the following transactions took place :
(i) The assets were sold off for the following amounts :
(ii) Kiran took over the Bills Receivable at Rs. 7,000 and the Bills Payable at book value.
(iii) There was an unrecorded asset of Rs. 4,000 which was sold for Rs. 1,800.
(iv) Prakash agreed to pay to his wife's loan.
(v) A contingent liability for a bill discounted at Rs. 8,000 was settled by Prakash.
(vi) Creditors were settled at a discount of 10% and goodwill realised Rs. 5,000.
(Vii) Realisation expenses were Rs. 2,100 which were met by Kiran.
You are required to :
(a) Pass the necessary Journal Entries.
(b) Prepare the Realisation Account on the dissolution of the firm.
(c) Prepare the Capital Accounts of the Partners.
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Answer:
321
Explanation:
3:2:1
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