Question 33 Chapter 7 of +2-A
33. Following is the Balance Sheet of Arvind and Balbir as at 31st March 2018:
| Liabilities | Amount | Assets | Amount | ||
| Trade Creditors | 45,000 | Cash | 750 | ||
| Bills Payable | 12,000 | Bank | 12,000 | ||
| Mrs Arvind’s Loan | 7,500 | Stock | 7,500 | ||
| Mrs Balbir’s Loan | 15,000 | Investments | 15,000 | ||
| Reserve Fund | 15,000 | Book Debts | 30,000 | ||
| Investments Fluctuation Reserve | 1,500 | Less: Provision for D. Debts | 3,000 | 27,000 | |
| Capital A/cs: | Building | 22,500 | |||
| Arvind | 15,000 | Plant | 30,000 | ||
| Balbir | 15,000 | 30,000 | Goodwill | 6,000 | |
| Profit and Loss A/c | 5,250 | ||||
| 1,26,000 | 1,26,000 |
The firm was dissolved on the above date under the following arrangement: a Arvind promised to pay off Mrs Arvind’s Loan and took Stock at 6,000.
b Balbir took half the Investments @ 10% discount.
c Book Debts realised 28,500. d Trade Creditors and Bills Payable were due on the average basis of one month after 31st March but were paid immediately on 31st March @ 2% discount per annum.
e Plant realised 37,500; Building 60,000; Goodwill 9,000 and remaining Investments 6,750.
f An old typewriter, written off completely from the firm’s books, now estimated to realise 450. It was taken by Balbir at this estimated price.
g Realisation expenses were 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.
The solution of Question 33 Chapter 7 of +2-A: –
| Realization Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Stock | 7,500 | Provision for Doubtful Debts | 3,000 | ||
| Investments | 15,000 | Trade Creditors | 45,000 | ||
| Book Debts | 30,000 | Bills Payable | 12,000 | ||
| Building | 22,500 | Mrs. Arvid’s Loan | 7,500 | ||
| Plant | 30,000 | Mrs. Balbir’s Loan | 15,000 | ||
| Goodwill | 6,000 | Investments Fluctuation Reserve | 1,500 | ||
| Arvind’s Capital A/c | 7,500 | Arvind’s Capital A/c | 6,000 | ||
| Balbir’s Capital A/c | 6,750 | ||||
| Bank A/c :- | Balbir’s Capital A/c | 450 | |||
| Trade Creditors | 44,925 | ||||
| Bills Payable | 11,980 | Bank | |||
| Expenses | 1,500 | Book Debts | 28,500 | ||
| Mrs. Balbir’s Loan | 15,000 | 73,405 | Plant | 37,500 | |
| Profit transferred to: | Building | 60,000 | |||
| Arvind’s Capital A/c | 23,522.50 | Goodwill | 9,000 | ||
| Balbir’s Capital A/c | 23,522.50 | 47,045 | Investments | 6,750 | 1,41,750 |
| 2,38,950 | 2,38,950 | ||||
| Partners’ Capital Account |
|||||
| Part. | Arvind | Balbir |
Part. |
Arvind | Balbir |
| To Profit and Loss A/c | 2,625 | 2,625 | By Balance B/d | 15,000 | 15,000 |
| To Realization A/c Assets | 6,000 | 7,200 | By Reserve Fund A/c | 7,500 | 7,500 |
| By Realization A/c | 7,500 | – | |||
| By Realization profit A/c | 23,522.50 | 23,522.50 | |||
| To Cash A/c | 44,897.50 | 44,897.50 | |||
| 53,522.50 | 46,022.50 | 53,522.50 | 46,022.50 | ||
| Bank Account |
|||||
| Particular |
Amount | Particular | Amount | ||
| Balance b/d | 12,000 | Realization A/c | 73,405 | ||
| Cash A/c | 750 | Arvind’s Capital A/c | 44,897.5 | ||
| Realization A/c | 1,41,750 | Balbir’s Capital A/c | 36,197.5 | ||
| 3,33,750 | 3,33,750 | ||||
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WORKING NOTE:-
| Creditors | 45,000 |
| Less:2% discount for 1 month | 75 |
| Payment made to Creditors | 44,925 |
| Bills Payable | 12,000 |
| Less: 2% discount for 1 month | 20 |
| Payment made for Bills Payable | 11,980 |
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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
