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Question 26 Chapter 7 of +2-Part-1
26. (Realisation A/c/Partner's Capital A/c/Cash A/e) L, M and N were partners in a firm sharing profits in the ratio of 2:2: 1. Balance sheet dated December 31, 2018 is as here under :
| Liabilities | Rs. | Assets | Rs. |
| Creditors | 4,000 | Cash | 5,000 |
| Reserve | 10,000 | Debtors | 4,000 |
| Capital A/c | Stock | 5,000 | |
| L | 10,000 | Furniture | 2,000 |
| M | 4,000 | Building | 9,000 |
| N | 2,000 | ||
| 25,000 | 25,000 |
Assets realised as follows:
Building Rs. 8,500: Furniture Rs. 1,500 : Stock Rs. 7,000 and Debtors Rs. 3,700. Creditors were settled at 2% less. L agreed to bear all realisation expenses for a consideration of Rs. 120. An unrecorded asset was taken over by M at Rs. 400.
Prepare necessary accounts to close the firm's books.
We are providing a solution of Question 26 Chapter 7 of +2 Part-1 in two formats. one is in Video format and another is in article format. Check out both formats as follows:
Realisation A/c
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To Debtors A/c | 4,000 | By Sundry Creditors | 4,000 | ||
| To Stock A/c | 5,000 | By M’s capital A/c | 400 | ||
| To furniture A/c | 2,000 | By Cash A/c | |||
| To building | 9,000 | Debtors | 3,700 | ||
| To Cash A/c (creditors ) | 3,920 | Furniture | 1,500 | ||
| To L’s capital A/c Expenses | 120 | Stock | 7,000 | ||
| To capital A/c | Building | 8,500 | 20,700 | ||
| L | 424 | ||||
| M | 424 | ||||
| N | 212 | 1,060 | |||
| 25,100 | 25,100 | ||||
Partners’ Capital Account
| Particulars | L | M | N | Particulars | L | M | N |
|---|---|---|---|---|---|---|---|
| To Realisation A/c | 400 | By Balance b/d | 10,000 | 4,000 | 2,000 | ||
| By reserve | 2,000 | 2,000 | 1,000 | ||||
| By REALISATION A/c | 424 | 424 | 212 | ||||
| By REALISATION A/c | 120 | ||||||
| To Cash A/c | 12,544 | 6,024 | 3,212 | ||||
| 12,544 | 6,424 | 3,212 | 12,544 | 6,424 | 3,212 |
| Actual payment to creditors | Rs |
| Claim | 4,000 |
| less 2% | 80 |
| 3,920 |
Cash A/c
| Particulars | Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To balance b/d | 5,000 | By Realisation A/c | |||
| To Realisation A/c | Creditors | 3,920 | |||
| Assets | 20,700 | By Capital A/c | |||
| L | 12,544 | ||||
| M | 6,024 | ||||
| N | 3,212 | ||||
| 25,700 | 25,700 | ||||
Comment if you have any questions.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 26 Chapter 7 of +2 Part-1 - USHA Publication 12 Class Part - 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to USHA Publication +2 Part 1.
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