Question 31 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 31 Chapter 7 of +2-A

Question 31 Chapter 7 of +2-A

31. X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2: 1, dissolved their firm as at 31st March 2018 on which date their Balance Sheet was as follows:

Liabilities   Amount Assets   Amount
Sundry Creditors   41,500 Cash at Bank   22,500
Bills Payable   20,000 Stock   80,000
Bank Loan   40,000 Debtor 50,000  
General Reserve   50,000 Less: Provision for Doubtful Debts 2,500 47,500
Investments Fluctuation Reserve   40,000 Investments   55,000
Capital A/cs:     Premises   1,51,500
X 75,000        
Y 75,000        
Z 15,000 1,65,000      
    3,56,500     3,56,500

A bill for 5,000 received from Mohan discounted from the bank is not met on maturity. The assets except for Cash at Bank and Investments were sold to a company which paid 3,25,000 in cash. The Investments were sold and 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors including Bills Payable were paid 57,500 in full settlement. Realisation Expenses amounted to 15,000. Prepare Realisation Account, Partners’ Capital Accounts and Bank Account.

 

The solution of Question 31 Chapter  7 of +2-A: –

 

Realization Account
Particular
Amount Particular Amount
Stock 80,000 Creditors   41,500
Debtors   50,000 Bills Payable   20,000
Investment   55,000 Bank Loan   40,000
Premises   1,51,500 Investment Fluctuation Reserve   40,000
Bank A/c:-     Provision for Doubtful Debts   2,500
Bill 5,000        
Creditors & Bills Payable 57,500   Bank    
Expenses 15,000   Assets 3,25,000  
Bank loan 40,000 1,17,500 Investments 56,500  
      Bill 2,500 3,84,000
Profit transferred to          
X’s Capital A/c 29,600        
Y’s Capital A/c 29,600        
Z’s Capital A/c 14,800 74,000      
    5,28,000     5,28,000

 

 

Partners’ Capital Account
Part. X Y Z

Part.

X Y Z
        By Balance B/d 75,000 75,000 15,000
        By Realization Profit 29,600 29,600 14,800
        By General Reserve 20,000 20,000 10,000
               
               
To Cash A/c 1,24,600 1,24,600 39,800         
  1,24,600 1,24,600 39,800   1,24,600 1,24,600 39,800

 

 

Bank Account
Particular
Amount Particular Amount
Balance b/d 22,500 Realization A/c   1,17,500
Realization A/c   3,84,000 X’s Capital A/c   1,24,600
      Y’s Capital A/c   1,24,600
      Z’s Capital A/c   39,800
    4,06,500     4,06,500

 

 

 

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

 

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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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