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Question 41 Chapter 7 of +2-A
40. A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2018. As on that date their capitals were: A 7,000 and B 4,000. There were also due on Loan A/c to A 4,500 and to B 750. The other liabilities amounted to 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised 24,000. Prepare necessary accounts showing the final settlement between partners.
Realization Account
| Particular |
Amount | Particular | Amount | ||
|---|---|---|---|---|---|
| Sundry Assets (WN) | 21,250 | Other liabilities | 5,000 | ||
| Cash A/c Liabilities | 5,000 | Cash A/c (Assets realized) | 24,000 | ||
| Profit transferred to: | |||||
| A’s Capital A/c | 1,750 | ||||
| B’s Capital A/c | 1,000 | 2,750 | |||
| 29,000 | 29,000 | ||||
Partners’ Capital Account
| Part. | A | B |
Part. |
A | B |
|---|---|---|---|---|---|
| By Balance B/d | 7,000 | 4,000 | |||
| By Realization A/c Profit | 1,750 | 1,000 | |||
| To Cash A/c | 8,750 | 5,000 | |||
| 8,750 | 5,000 | 8,750 | 5,000 |
Partners’ Loan Account
| Part. | A | B |
Part. |
A | B |
|---|---|---|---|---|---|
| By Balance B/d | 4,500 | 750 | |||
| To Cash A/c | 4,500 | 750 | |||
| 4,500 | 750 | 4,500 | 750 |
Bank Account
| Particular |
Amount | Particular | Amount | ||
|---|---|---|---|---|---|
| Realisation A/c Assets | 24,000 | A’s Capital A/c | 8,750 | ||
| B’s Capital A/c | 5,000 | ||||
| A’s Loan A/c | 4,500 | ||||
| B’s Loan A/c | 750 | ||||
| Realization A/c | 5,000 | ||||
| 24,000 | 24,000 | ||||
Working Note:
Memorandum Balance Sheet
| Particular |
Amount | Particular | Amount | ||
|---|---|---|---|---|---|
| Other liabilities | 5,000 | Sundry Assets | 21,250 | ||
| Capital A/c | |||||
| A | 7,000 | ||||
| B | 4,000 | 11,000 | |||
| A’s Loan | 4,500 | ||||
| B’s Loan | 750 | ||||
| 21,250 | 21,250 | ||||
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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 "Q.No.41 | Chapter 7 – Dissolution of a Partnership Firm | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1.
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