Q.No.33 | Chapter 7 – Dissolution of a Partnership Firm | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 33 Chapter 7 of +2-A

33. Following is the Balance Sheet of Arvind and Balbir as at 31st March 2018:

Liabilities		Amount	Assets		Amount
Trade Creditors		45,000	Cash		750
Bills Payable		12,000	Bank		12,000
Mrs Arvind's Loan		7,500	Stock		7,500
Mrs Balbir's Loan		15,000	Investments		15,000
Reserve Fund		15,000	Book Debts	30,000
Investments Fluctuation Reserve		1,500	Less: Provision for D. Debts	3,000	27,000
Capital A/cs:			Building		22,500
Arvind	15,000		Plant		30,000
Balbir	15,000	30,000	Goodwill		6,000
			Profit and Loss A/c		5,250
		1,26,000			1,26,000

The firm was dissolved on the above date under the following arrangement: a Arvind promised to pay off Mrs Arvind's Loan and took Stock at 6,000.
b Balbir took half the Investments @ 10% discount.
c Book Debts realised 28,500. d Trade Creditors and Bills Payable were due on the average basis of one month after 31st March but were paid immediately on 31st March @ 2% discount per annum.
e Plant realised 37,500; Building 60,000; Goodwill 9,000 and remaining Investments 6,750.
f An old typewriter, written off completely from the firm's books, now estimated to realise 450. It was taken by Balbir at this estimated price.
g Realisation expenses were 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.

 

The solution of Question 33   Chapter  7 of +2-A: -

 

Realization Account

Particular		Amount	Particular		Amount
Stock		7,500	Provision for Doubtful Debts		3,000
Investments		15,000	Trade Creditors		45,000
Book Debts		30,000	Bills Payable		12,000
Building		22,500	Mrs. Arvid’s Loan		7,500
Plant		30,000	Mrs. Balbir’s Loan		15,000
Goodwill		6,000	Investments Fluctuation Reserve		1,500
Arvind’s Capital A/c		7,500	Arvind’s Capital A/c		6,000
			Balbir’s Capital A/c		6,750
Bank A/c :-			Balbir’s Capital A/c		450
Trade Creditors	44,925
Bills Payable	11,980		Bank
Expenses	1,500		Book Debts	28,500
Mrs. Balbir’s Loan	15,000	73,405	Plant	37,500
Profit transferred to:			Building	60,000
Arvind’s Capital A/c	23,522.50		Goodwill	9,000
Balbir’s Capital A/c	23,522.50	47,045	Investments	6,750	1,41,750
		2,38,950			2,38,950

 

 

Partners’ Capital Account

Part.	Arvind	Balbir	Part.	Arvind	Balbir
To Profit and Loss A/c	2,625	2,625	By Balance B/d	15,000	15,000
To Realization A/c Assets	6,000	7,200	By Reserve Fund A/c	7,500	7,500
			By Realization A/c	7,500	-
			By Realization profit A/c	23,522.50	23,522.50
To Cash A/c	44,897.50	44,897.50
	53,522.50	46,022.50		53,522.50	46,022.50

 

 

Bank Account

Particular		Amount	Particular		Amount
Balance b/d		12,000	Realization A/c		73,405
Cash A/c		750	Arvind’s Capital A/c		44,897.5
Realization A/c		1,41,750	Balbir’s Capital A/c		36,197.5
		3,33,750			3,33,750

 

WORKING NOTE:-

Creditors	45,000
Less:2% discount for 1 month	75
Payment made to Creditors	44,925
Bills Payable	12,000
Less: 2% discount for 1 month	20
Payment made for Bills Payable	11,980

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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