X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2018 on which date their Balance Sheet was as follows:
A bill for ₹ 5,000 received from Mohan discounted from bank is not met on maturity.
The assets except Cash at Bank and Investments were sold to a company which paid ₹ 3,25,000 in cash.The Investments were sold and ₹ 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors (including Bills Payable) were paid ₹ 57,500 in full settlement. Realisation Expenses amounted to ₹ 15,000.
Prepare Realisation Account, Partners Capital Accounts and Bank Account.
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X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2018 on which date their Balance Sheet was as follows: A bill for Rs. 5,000 received from Mohan discounted from bank is not met on maturity. The assets except Cash at Bank and Investments were sold to a company which paid Rs. 3,25,000 in cash.The Investments were sold and Rs. 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors (including Bills Payable) were paid Rs. 57,500 in full settlement. Realisation Expenses amounted to Rs. 15,000. Prepare Realisation Account, Partners Capital Accounts and Bank Account.Read more on Sarthaks.com - https://www.sarthaks.com/470636/carrying-business-merchants-sharing-profits-losses-ratio-dissolved-their-firm-31st-march
The Realisation Account, Partner’s Capital Accounts and Bank Account are calculated and prepared below:
Explanation:
REALISATION ACCOUNT:
Particulars (Dr.)
To Stock A/c - Rs. 80000
To Debtors A/c - Rs. 50000
To Investment A/c - Rs. 55000
To Premises A/c - Rs. 1,51,500
To Bank A/c:
- Bill - Rs. 5000
- Creditor and Bills payable - Rs. 57,500
- Expenses - Rs. 15,000
- Bank loan - Rs. 40,000
Total = Rs. 1,17,500
To Profit transferred to:
- X's Capital A/c - Rs. 29,600
- Y's Capital A/c - Rs. 29,600
- Z's Capital A/c - Rs. 14,800
Total = Rs. 74000
Adding all, we get
= 80,000 + 50,000 + 55,000 + 1,51,500 + 1,17,500 + 74,000
= Rs. 5,28,000
Particulars (Cr.)
By Creditor A/c - Rs. 41500
By Bills payable A/c - Rs. 20000
By Bank Loan A/c - Rs. 40000
By Investment Fluctuation Reserve A/c - Rs. 40000
By Provision for Doubtful Debts A/c - Rs. 2500
By Bank A/c-
- By Assets - Rs. 325000
- By Investments - Rs. 56500
- By Bill - Rs. 2500
Total = Rs. 3,84,000
Adding all, we get
= 41500 + 20000 + 40000 + 40000 + 2500 + 384000
= Rs. 5,28,000
As per the Parner's Capital Accounts,
The Dr. and the Cr. of X, Y and Z will be Rs. 1,24,600, Rs. 1,24,600 and Rs. 39,800 respectively.
The bank account are calculated and prepared below:
