Question 29 Chapter 7 of +2-A

Question 29 Chapter 7 of +2-A

29. A and B are partners in a firm sharing profits and losses in the ratio of 2: 1. On 31st March 2018, their Balance Sheet was:

LiabilitiesAmountAssets Amount
Bank Overdraft30,000Cash in Hand 6,000
General Reserve56,000Bank Balance 10,000
Investments Fluctuation Reserve20,000Sundry Debtors26,000 
A’s Loan34,000Less: Provision for Doubtful Debtors2,00024,000
Capital A/c: Investments 40,000
A50,000Stock 10,000
  Furniture 10,000
  Building 60,000
  B’s Capital 30,000
 1,90,000  1,90,000

On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of 35,000. Other assets were realised as follows: Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. The building was sold at 1,00,000. Compensation to employees paid by the firm amounted to 10,000. This liability was not provided for in the above Balance Sheet. You are required to close the books of the firm by preparing Realisation Account, Partners’ Capital Accounts and Bank Account

 

The solution of Question 29 Chapter  7 of +2-A: –

 

Realization Account
Particular
AmountParticular Amount
Sundry Debtors26,000Provision for Doubtful Debts 2,000
Investments 40,000Bank Overdraft 30,000
Stock 10,000Investments Fluctuation Reserve 20,000
Furniture 10,000A’s Capital A/c Investments 35,000
Building 60,000   
Bank A/c     
Compensation to Employees10,000 Bank  
Bank Overdraft30,00040,000Sundry Debtors26,000 
   Stock8,500 
   Furniture8,000 
Profit transferred to  Building1,00,0001,42,500
A’s Capital A/c29,000    
B’s Capital A/c14,50043,500   
  2,29,500  2,29,500

 

Partners’ Capital Account
Part.AB

Part.

AB
To Balance b/d 30,000By Balance B/d50,000 
To Realization loss A/c56,600By Realization Liabilities A/c37,33318,667
   By Realization profit A/c29,00014,500
      
To Cash A/c81,3333,167   
 1,16,33333,167 1,16,33333,167

 

A’s Loan Account
Particular
AmountParticular Amount
Bank A/c34,000Balance b/d 34,000
      
      
      
  34,000  34,000

 

Bank Account
Particular
AmountParticular Amount
Balance b/d10,000Realization A/c 40,000
Cash A/c 6,000A’s Capital A/c 81,333
Realization A/c 1,42,500A’s Capital A/c 3,167
   A’s Loan A/c 34,000
  1,58,500  1,58,500

 

 

 

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 - Question 29 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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