Question 29 Chapter 7 – Class 12 Part 1 Unimax

Question 29 Chapter 7 - Class 12 Part 1 Unimax

29. A, B and C were partners in a firm and shared profits in the ratio of 3 : 2 : 1. On 31.12.2022, their Balance Sheet was as follows :

Liabilities		Amount	Assets		Amount
creditors		65,000	Cash		22,500
Bills payable		20,000	Debtors		52,300
Provident Fund		12,000	Stock		36,000
Investment Fluctuation Fund		6,000	Investments		15,000
Commission Received in Advance		8,000	Plant		91,200
Capitals:			Profit & Loss A/c		54,000
A	80,000
B	50,000
C	30,000	1,60,000
		2,71,000			2,71,000

On this date the firm was dissolved. A was appointed to realise the assets. A was to receive 5% commission on the sale of assets (except cash) and was to bear all the expenses of realisation.
A realised the assets as follows: Debtor's Z 30,000, Stock Z 26,000, Investments 75% of book value, Plant 42,750.
Expenses of realisation amounted to 4,000. Commission received in advance was returned to the customers after deducting 3,000. Firm had to pay Z 7,200 for outstanding salary not provided for earlier. Compensation paid to employees amounted to 9,800. The liability was not provided for in the above Balance Sheet. Z 25,000 had to be paid for Provident. Fund. Prepare Realisation Account, Capital Accounts and Cash Account Expenses of realisation were paid out of firm' s cash.

The solution of Question 29 Chapter 7 - Class 12 Part 1 Unimax: -

Realisation a/c

Particulars		Amount	Particulars		Amount
To Debtors		52,300	By Creditors		65,000
To Stock		36,000	By Bills Payable		20,000
To Investment		15,000	By Provident Fund		12,000
To Plant		91,200	By Investment Fluctuation Fund		6,000
To A's Capital A/c		5,500	By Commission received in advance		8,000
-Commission			By Cash A/c
To Cash A/c			-Debtors	30,000
-Commission received in advance	5,000		-Stock	26,000
-Outstanding salary (not recorded)	7,200		-Investments	11,250
-Compensation to employees	9,800		-Plant	42,750
-Provident fund	25,000		By loss transferred to capital A/cs
-Creditors	65,000		A	55,500
-Bills Payable	20,000	1,32,000	B	37,000
			C	18,500	1,11,000
		3,32,000			3,32,000

Partner’s Capital a/c

Particulars	A	B	C	Particulars	A	B	C
To Profit and loss A/c	27,000	18,000	9,000	By balance b/d	80,000	50,000	30,000
To Realisation A/c	55,500	37,000	18,500	By Realisation A/c	5,500
(Loss)				Commission
To cash A/c (Exp.)	4,100			By Cash A/c	1,100	5,000
To cash A/c			2,500
	86,600	55,000	30,000		86,600	55,000	30,000

Cash A/c

Particulars	Amount	Particulars	Amount
To Balance b/d	22,500	By Realisation A/c	1,32,000
To Realisation A/c	1,10,000	(Payment of Liabilities)
(assets realised)		By A’s capital A/c (Exp.)	4,100
To A’s capital account	1,100	By C’s capital account	2,500
To B’s capital account	5,000
	1,38,600		1,38,600