Question 28 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 28 Chapter 7 of +2-A

Question 28 Chapter 7 of +2-A

28. A, B and C are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March 2018, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet :

Liabilities   Amount Assets Amount
Creditors   40,000 Cash at Bank 3,000
Loan A/c: A   10,000 Stock 50,000
Workmen Compensation Reserve   21,000 Land and Building 57,000
Capital A/cs:     Profit and Loss A/c 6,000
A 60,000   Advertisement Suspense A/c 6,000
B 40,000      
C 10,000 1,10,000    
    1,81,000   1,81,000

During the course of realisation, liability under a suit for damages is settled at 20,000 as against 5,000 only provided for in the books of the firm. Land and Building were sold for 40,000 and the Stock and Sundry Debtors realised 30,000 and 42,000 respectively. The expenses of realisation amounted to 1,200. There was a car in the firm, which was completely written off from the books. Ir was taken over by A for 20,000. He also agreed to pay Outstanding Salary of 20,000 not provided in books. Prepare Realisation Account, Partners’ Capital Accounts and Bank Account in the books of the firm.

 

The solution of Question 28 Chapter  7 of +2-A: –

 

Realization Account
Particular
Amount Particular Amount
Land and Building 57,000 Creditors   40,000
Stock   50,000      
      Bank A/c    
      Land and building 40,000  
Bank A/c     Stock  30,000  
Creditors 40,000 + 15,000 55,000   Sundry Debtors 42,000 1,12,000
Expenses 1,200 56,200      
           
      Loss transferred to:    
      A’s Capital A/c 30,600  
      B’s Capital A/c 20,400  
      C’s Capital A/c 10,200 61,200
    2,13,200     2,13,200

 

Partners’ Capital Account  
Part. A B C

Part.

A B C
To Profit and Loss A/c 7,500 5,000 2,500 By Balance B/d 60,000 40,000 10,000
To Realization loss A/c 30,600 20,400 10,200 By Compensation Reserve A/c 10,500 7,000 3,500
To Suspense A/c Realization 3,000 2,000 1,000        
               
To Cash A/c 29,400 19,600   By cash A/c     200 
  70,500 47,000 13,700   70,500 47,000 13,700

 

A’s Loan Account
Particular
Amount Particular Amount
Bank A/c 10,000 Balance b/d   10,000
           
           
           
    10,000     10,000

 

Bank Account
Particular
Amount Particular Amount
Balance b/d 3,000 A’s Loan A/c   10,000
Realization A/c   1,12,000 A’s Capital A/c   56,200
C’s Capital A/c   200 A’s Capital A/c   29,400
      B’s Capital A/c   19,600
    1,15,200     1,15,200

 

 

 

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 28 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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