Question 22 Chapter 7 of +2-A
22. A and B are partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March 2018, their Balance Sheet was as follows:
| Liabilities | Amount | Assets | Amount | |
| Creditors | 38,000 | Cash at Bank | 11,500 | |
| Mrs. A’s Loan | 10,000 | Stock | 6,000 | |
| B’s Loan | 15,000 | Debtors | 19,000 | |
| Reserve | 5,000 | Furniture | 4,000 | |
| A’s Capital | 10,000 | Plant | 28,000 | |
| B’s Capital | 8,000 | 18,000 | Investments | 10,000 |
| Profit and Loss A/c | 7,500 | |||
| 86,000 | 86,000 |
The firm was dissolved on 31st March 2018 and both the partners agreed to the following :
a A took Investments at an agreed value of 8,000. He also agreed to settle Mrs. A’s Loan.
b Other assets realised as : Stock — 5,000; Debtors— 18,500; Furniture— 4,500; Plant— 25,000.
c Expenses of realisation came to 1,600.
d Creditors agreed to accept 37,000 in full settlement of their claims.
Prepare Realisation Account, Partners’ Capital Accounts and Bank Account
The solution of Question 22 Chapter 7 of +2-A: –
| Realization Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Stock | 6,000 | Creditors | 38,000 | ||
| Debtors | 19,000 | Mrs. A’s Loan | 10,000 | ||
| Furniture | 4,000 | A’s Capital A/c Investments | 8,000 | ||
| Plant | 28,000 | Shilpa’s Capital A/c Stock | 35,000 | ||
| Investments | 10,000 | Stock | 5,000 | ||
| A’s Capital A/c Mrs. A’s loan | 10,000 | Debtors | 18,500 | ||
| Bank A/c: | Furniture | 4,500 | |||
| Expenses | 1,600 | Plant | 25,000 | 53,000 | |
| Creditors | 1,200 | 38,600 | Realization Loss | ||
| A’s Capital A/c | 3,960 | ||||
| B’s Capital A/c | 2,640 | 6,600 | |||
| 1,15,600 | 1,15,600 | ||||
| Partners’ Capital Account |
|||||
| Part. | A | B |
Part. |
A | B |
| To Realization loss | 3,960 | 2,640 | By Balance B/d | 10,000 | 8,000 |
| To Realization A/c | 8,000 | – | By Reserve A/c | 3,000 | 2,000 |
| To Profit and Loss A/c | 4,500 | 3,000 | By Realization A/c | 10,000 | – |
| To Balance c/d | 6,540 | 4,360 | |||
| 23,000 | 10,000 | 23,000 | 10,000 | ||
| B’s Loan Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Bank A/c | 15,000 | Balance b/d | 15,000 | ||
| 15,000 | 15,000 | ||||
| Bank Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Balance b/d | 11,500 | Realization A/c | 38,600 | ||
| Realization A/c | 53,000 | A’s Capital A/c | 6,540 | ||
| B’s Capital A/c | 4,360 | ||||
| B’s Loan A/c | 15,000 | ||||
| 64,500 | 64,500 | ||||
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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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