Question

There are two partners X and Y in a firm and their capitals are ₹ 50,000 and ₹ 40,000. The creditors are ₹ 30,000. The assets of the firm realise ₹ 1,00,000. How much will X and Y receive ?

Answer 1

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

Explanation:  

Calculating Realisation Account :

• It is obtained 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 X and Y are Rs. 50,000 and Rs. 40,000 respectively.

As per the Cash Account,

An amount of Rs. 30000, Rs. 40000 and Rs. 30000 has been debited from the Realisation account, X and Y's capital account respectively and it has been credited an amount of Rs. 1,00,000 to the Realisation account.

The Realisation account and the Memorandum balance sheet are prepared and calculated below: