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Question 45 Chapter 7 of +2-Part-1
45. (Comprehensive) Amar, Akbar and Anthony commenced business on 1st April 2018, sharing profits and losses in the ratio of 2: 2:1. Capitals contributed were: Amar Rs. 40,000: Akbar Rs. 30,000 and Anthony RS. 20,000. The partners were entitled to interest on capital @6% p.a. During the year ended 31st March 2019, the firm earned a profit (before interest) of Rs. 25,000.
The partners had drawn Amar Rs. 10.000, Akbar Rs. 8,000 and Anthony Rs. 5,000
On 31st March, 2019 the firm was dissolved. The assets realised RS. 1,00,000. The creditors which totaled Rs. 15,000 were paid at a discount of 3%. There was a contingent liability of Rs. 500 on bills discounted which was also paid. Expenses of realisation amounted to Rs. 1,450. Prepare accounts to close the books of the firm.
Profit & loss appropriation A/c for ending of the year 31-3-2019
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To interest on capital A/c | By profit b/d (before interest) | 25,000 | |||
| Amar (40,000 X 6/100) | 2,400 | ||||
| Akbar (30,000 X 6/100) | 1,800 | ||||
| Anthony (20,000 X 6/100) | 1,200 | 5,400 | |||
| To profit transferred to | |||||
| To Amar’s capital A/c 2/5 | 7,840 | ||||
| To Akbar’s capital A/c 2/5 | 7,840 | ||||
| Anthony (20,000 X 6/100) | 3,920 | 19,600 | |||
| 25,000 | 25,000 | ||||
Partners’ Capital Account
| Particulars | Amar | Akbar | Anthony |
Particulars | Amar | Akbar | Anthony |
|---|---|---|---|---|---|---|---|
| To Drawings A/c | 10,000 | 8,000 | 5,000 | By Balance b/d | 40,000 | 30,000 | |
| By intt. On capital | 2,400 | 1,800 | 1,200 | ||||
| By P & L A/c (profit ) | 7,840 | 7,840 | 3,920 | ||||
| To Balance c/d |
40,240 | 31,640 | 20,120 | ||||
| 50,240 | 39,640 | 25,120 | 50,240 | 39,640 | 25,120 |
Balance sheet
| Liabilities | Amount | Asstes | Amount | ||
|---|---|---|---|---|---|
| Capital A/c | Sundry Assets (balancing figures ) | 1,07,000 | |||
| Amar | 40,240 | ||||
| Akbar | 31,640 | ||||
| Anthony | 20,120 | ||||
| Creditors | 15,000 | ||||
| 1,07,000 | 1,07,000 | ||||
Realisation A/c
| Particulars |
Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To sundry assets A/c | 1,07,000 | By Creditors | 15,000 | ||
| To cash A/c (liabilities & expenses paid | By cash | ||||
| Creditors | 14,550 | Assets realised | 1,00,000 | ||
| Contingent liability | 500 | By loss on realisation | |||
| Expenses on Realisation | 1,450 | Amar | 3,400 | ||
| Akbar | 3,400 | ||||
| Anthony | 1,700 | 8,500 | |||
| 1,23,500 | 1,23,500 | ||||
Partners’ Capital Account
| Particulars | Amar | Akbar | Anthony |
Particulars | Amar | Akbar | Anthony |
|---|---|---|---|---|---|---|---|
| To Realisation A/c Loss | 3,400 | 3,400 | 1,700 | By Balance b/d | 40,240 | 31,640 | 20,120 |
| To Balance c/d |
36,840 | 28,240 | 18,420 | ||||
| 40,240 | 31,640 | 20,120 | 40,240 | 31,640 | 20,120 |
Cash A/c
| Particulars | Amount | Particulars | Amount | ||
|---|---|---|---|---|---|
| To Realisation A/c | By realisation A/c | ||||
| Assets realised | 1,00,000 | Creditors | 14,550 | ||
| Contingent liability | 500 | ||||
| Expenses on Realisation | 1,450 | ||||
| By Amar’s capital A/c | 36,840 | ||||
| By Akbar ’s capital A/c | 28,240 | ||||
| By Akbar ’s capital A/c | 18,420 | ||||
| 1,00,000 | 1,00,000 | ||||
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.
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