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Question 26 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 26 Chapter 7 of +2-A
Question No.26 Chapter No.7 - T.S. Grewal +2 Book 2019-Solution

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Question 26 Chapter 7 of +2-A

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26. Ashu and Harish are partners sharing profits and losses as 3: 2. They decided to dissolve the firm on 31st March 2018. Their Balance Sheet on the above date was:

Liabilities AmountAssetsAmount
Capital A/cs:   Building80,000
Ashu1,08,000 Machinery70,000
Harish54,0001,62,000Furniture14,000
Creditors 88,000Stock20,000
Bank Overdraft 50,000Investments60,000
   Debtors48,000
   Cash in Hand8,000
  3,00,000 3,00,000

The firm was dissolved on 1st April 2018 and the Assets and Liabilities were settled as follows :
a Land and Building b realised 4,30,000.
b Debtors realized 2,25,000 with interest and 1,000 were recovered for Bad Debts written off last year.
c There was an Unrecorded Investment which was sold for 25,000.
d Vichal took over Machinery at 2,80,000 for cash.
e 50% of the Creditors were paid 4,000 less in full settlement and the remaining Creditors were paid the full amount.
Pass necessary journal entries for dissolution of the firm.
Ashu is to take over the building at 95,000 and Machinery and Furniture is taken over by Harish at a value of 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partners in profit-sharing ratio. Debtors realised for 46,000, expenses of realisation amounted to 3,000. Prepare necessary Ledger Accounts

 

 

The solution of Question 26 Chapter  7 of +2-A: –

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Realization Account
Particular
AmountParticular Amount
Building80,000Creditors 88,000
Machinery 70,000Bank overdraft 50,000
Furniture 14,000Ashu’s Capital A/c (see working note) 1,43,000
Stock 20,000Harish’s Capital A/c (see working note) 1,12,000
Investments 60,000Cash Debtors 46,000
Debtors 48,000   
Ashu’s Capital A/c Creditors 88,000   
Harish’s Capital A/c Bank Overdraft 50,000   
Cash Expenses 3,000   
      
Realization Profit     
Ashu’s Capital A/c3,600    
Harish’s Capital A/c2,4006,000   
  4,39,000  4,39,000

 

Partners’ Capital Account
Part.AshuHarish

Part.

AshuHarish
To Realization Assets taken1,43,0001,12,000By Balance B/d1,08,0008,000
To Realization A/c56,6001,965By Realization Liabilities A/c88,00050,000
To Realization A/c  By Realization profit A/c3,6002,400
      
To Cash A/c56,600 By Cash A/c 5,600
 1,99,6001,12,000 1,99,6001,12,000

 

 

Bank Account
Particular
AmountParticular Amount
Balance b/d8,000Realization Expenses 3,000
Realization Debtors 46,000Ashu’s Capital A/c 56,600
Harish’s Capital A/c 5,600   
  59,600  59,600

 

Working Notes:

 
Particular
AshuHarish
Building95,000
Machinery and Furniture 80,000
Stock 3:2 12,0008,000
Investment 3:2 36,00024,000
  1,43,0001,12,000

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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)

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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