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   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.

 

 

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

 

 

 

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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2 Book 1 min - Question 25 Chapter 7 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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