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Question 25 Chapter 7 of +2-A
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25. P, Q and R were partners in firm sharing profits and losses in the ratio of 5 : 3: 2. They agreed to dissolve their partnership firm on 31st March 2018. P was deputed to realise the assets and pay the liabilities. He as paid 1,000 as commission for his services. The financial position of the firm was:
Liabilities | Amount | Assets | Amount | ||
Creditors | 10,000 | Stock | 5,500 | ||
Bills Payable | 3,700 | Investments | 15,000 | ||
Investments Fluctuation Reserve | 4,500 | Debtors | 7,100 | ||
Less: Provision for Doubtful Debtors | 450 | 6,650 | |||
Capital A/cs: | Cash | 5,600 | |||
P | 37,550 | R’s Capital A/c | 8,000 | ||
Q | 15,000 | 52,550 | Plant and Machinery | 30,000 | |
70,750 | 70,750 |
P took over Investments for 12,500. Stock and Debtors realized 11,500. Plant and Machinery were sold to Q for 22,500 for cash. Unrecorded assets realized 1,500. Realization expenses paid amounted to 900. Prepare necessary Ledger Accounts to close the books of the firm.
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The solution of Question 25 Chapter 7 of +2-A: –
Realization Account | |||||
Particular | Amount | Particular | Amount | ||
Plant and Machinery | 30,000 | Creditors | 10,000 | ||
Stock | 5,500 | Bills Payable | 3,700 | ||
Investments | 15,000 | Investments Fluctuation Reserve | 4,500 | ||
Debtors | 7,100 | Provision for Doubtful Debts | 450 | ||
Cash A/c: | P’s Capital A/c Investments | 12,500 | |||
Creditors | 10,000 | Cash A/c: | |||
Bills Payable | 3,700 | Stock and Debtors | 11,500 | ||
Expenses | 900 | 14,600 | Plant and Machinery | 22,500 | |
P’s Capital A/c | 1,000 | Unrecorded Assets | 1,500 | 35,500 | |
Realization Loss | |||||
P’s Capital A/c | 3,275 | ||||
Q’s Capital A/c | 1,965 | ||||
R’s Capital A/c | 1,310 | 6,550 | |||
73,200 | 73,200 |
Partners’ Capital Account | |||||||
Part. | P | Q | R | Part. | P | Q | R |
To Balance B/d | 8,000 | By Balance B/d | 37,550 | 15,000 | – | ||
To Realization loss A/c | 3,275 | 1,965 | 1,310 | By Realization A/c | 1,000 | – | – |
To Realization A/c | |||||||
To Cash A/c | 22,775 | 13,035 | To Cash A/c | 9,310 | |||
38,500 | 15,000 | 9,310 | 38,500 | 13,000 | 9,310 |
Bank Account | |||||
Particular | Amount | Particular | Amount | ||
Balance b/d | 5,600 | Realization A/c | 14,600 | ||
Realization A/c | 35,500 | P’s Capital A/c | 22,775 | ||
R’s Capital A/c | 9,310 | Q’s Capital A/c | 13,035 | ||
50,410 | 50,410 |
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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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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