Question 25 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 25 Chapter 7 of +2-A

Question 25 Chapter 7 of +2-A

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 AmountAssets Amount
Creditors 10,000Stock 5,500
Bills Payable 3,700Investments 15,000
Investments Fluctuation Reserve 4,500Debtors7,100 
   Less: Provision for Doubtful Debtors4506,650
Capital A/cs:  Cash 5,600
P37,550 R’s Capital A/c 8,000
Q15,00052,550Plant 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.

 

 

The solution of Question 25 Chapter  7 of +2-A: –

 

Realization Account
Particular
AmountParticular Amount
Plant and Machinery30,000Creditors 10,000
Stock 5,500Bills Payable 3,700
Investments 15,000Investments Fluctuation Reserve 4,500
Debtors 7,100Provision for Doubtful Debts 450
Cash A/c:  P’s Capital A/c Investments 12,500
Creditors10,000 Cash A/c:  
Bills Payable3,700 Stock and Debtors11,500 
Expenses90014,600Plant and Machinery22,500 
P’s Capital A/c 1,000Unrecorded Assets1,50035,500
   Realization Loss  
   P’s Capital A/c3,275 
   Q’s Capital A/c1,965 
   R’s Capital A/c1,3106,550
  73,200  73,200

 

Partners’ Capital Account
Part.PQR

Part.

PQR
To Balance B/d  8,000By Balance B/d37,55015,000
To Realization loss A/c3,2751,9651,310By Realization A/c1,000
To Realization A/c       
        
To Cash A/c22,77513,035 To Cash A/c  9,310
 38,50015,0009,310 38,50013,0009,310

 

 

Bank Account
Particular
AmountParticular Amount
Balance b/d5,600Realization A/c 14,600
Realization A/c 35,500P’s Capital A/c 22,775
R’s Capital A/c 9,310Q’s Capital A/c 13,035
  50,410  50,410

 

 

 

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)

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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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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