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

Question 26 Chapter 7 of +2-A

Question 26 Chapter 7 of +2-A

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   Amount Assets Amount
Capital A/cs:      Building 80,000
Ashu 1,08,000   Machinery 70,000
Harish 54,000 1,62,000 Furniture 14,000
Creditors   88,000 Stock 20,000
Bank Overdraft   50,000 Investments 60,000
      Debtors 48,000
      Cash in Hand 8,000
    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: –

 

Realization Account
Particular
Amount Particular Amount
Building 80,000 Creditors   88,000
Machinery   70,000 Bank overdraft   50,000
Furniture   14,000 Ashu’s Capital A/c (see working note)   1,43,000
Stock   20,000 Harish’s Capital A/c (see working note)   1,12,000
Investments   60,000 Cash 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/c 3,600        
Harish’s Capital A/c 2,400 6,000      
    4,39,000     4,39,000

 

Partners’ Capital Account
Part. Ashu Harish

Part.

Ashu Harish
To Realization Assets taken 1,43,000 1,12,000 By Balance B/d 1,08,000 8,000
To Realization A/c 56,600 1,965 By Realization Liabilities A/c 88,000 50,000
To Realization A/c     By Realization profit A/c 3,600 2,400
           
To Cash A/c 56,600   By Cash A/c   5,600
  1,99,600 1,12,000   1,99,600 1,12,000

 

 

Bank Account
Particular
Amount Particular Amount
Balance b/d 8,000 Realization Expenses   3,000
Realization Debtors   46,000 Ashu’s Capital A/c   56,600
Harish’s Capital A/c   5,600      
    59,600     59,600

 

Working Notes:

 
Particular
Ashu Harish
Building 95,000
Machinery and Furniture   80,000
Stock 3:2   12,000 8,000
Investment 3:2   36,000 24,000
    1,43,000 1,12,000

 

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 26 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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