Q.No.27 | Chapter 7 – Dissolution of a Partnership Firm | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 27 Chapter 7 of +2-A

27. A, B and C were equal partners. On 31st March 2018, their Balance Sheet stood as:

Liabilities		Amount	Assets	Amount
Creditors		50,400	Cash	3,700
Reserve		12,000	Stock	20,100
Capital A/cs:			Debtors	62,600
A	30,000		Investments	16,000
B	25,000		Furniture	6,500
C	15,000	70,000	Building	23,500
		1,32,400		400

The firm was dissolved on the above date on the following terms:
a For the purpose of dissolution, Investments were valued at 18,000 and A took over the Investments at this value.
b Fixed Assets realised 29,700 whereas Stock and Debtors realised 80,000.
c Expenses of realisation amounted to 1,300.
d Creditors allowed a discount of 800.
e One Bill receivable for 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay anything and hence the bill had to be met by the firm.
Prepare Realisation Account, Partner's Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.

 

The solution of Question 27 Chapter  7 of +2-A: -

 

Realization Account

Particular		Amount	Particular		Amount
Stock		20,100	Creditors		50,400
Debtors		62,600	A’s Capital A/c Investments		18,000
Investments		16,000
Furniture		6,500	Cash A/c:
Building		23,500	Furniture and Building	29,700
Cash A/c:			Stock and Debtors	80,000	1,09,700
Expenses	1,300
Creditors	49,600
Bills	1,500	52,400
			Loss transferred to:
			A’s Capital A/c	1,000
			B’s Capital A/c	1,000
			C’s Capital A/c	1,000	3,000
		1,81,100			1,81,100

 

Partners’ Capital Account
Part.	A	B	C	Part.	A	B	C
To Realization A/c Investment	18,000	-	-	By Balance B/d	30,000	25,000	15,000
To Realization loss A/c	1,000	1,000	1,000	By Reserve A/c	4,000	4,000	4,000
To Realization A/c
To Cash A/c	15,000	28,000	18,000
	34,000	29,000	19,000		34,000	29,000	19,000

 

 

Bank Account

Particular		Amount	Particular		Amount
Balance b/d		3,700	Realization A/c		52,400
Realization A/c		1,09,700	A’s Capital A/c		15,000
			B’s Capital A/c		28,000
			C’s Capital A/c		18,000
		1,13,400			1,13,400

 

 

 

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 – Company Accounts –  Accounting for Share Capital
• Chapter No. 9 – Company Accounts – Issue of Debentures
• Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis 
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

 

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