Question 34 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 34 Chapter 7 of +2-A

Question 34 Chapter 7 of +2-A

34. Anju, Manju and Sanju were partners in firm sharing profits in the ratio of 2 : 2: 1. On 31st March 2018, their Balance Sheet was:

Liabilities   Amount Assets   Amount
Creditors   50,000 Cash   60,000
Bank Loan   35,000 Debtors   75,000
Employees Provident Fund   15,000 Stock   40,000
Investments Fluctuation Reserve   10,000 Investments   20,000
Commission Received in Advance   8,000 Plant   50,000
Capital A/cs:     Profit and Loss A/c   3,000
Anju 50,000        
Manju 50,000        
Sanju 50,000 1,30,000      
    2,48,000     2,48,000

On this date, the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets except for cash and was to bear all expenses of realisation. Anju realised the assets as follows : Debtors 60,000; Stock 35,500; Investments 16,000; Plant 90% of the book value . Expenses of Realisation amounted to 7,500. The commission received in advance was returned to customers after deducting 3,000. The firm had to pay 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to 17,000. This liability was not provided for in the above Balance Sheet. 20,000 had to be paid for the Employees’ Provident Fund. Prepare Realisation Account, Capital Accounts of Partners and Cash Account

 

The solution of Question 34 Chapter  7 of +2-A: –

 

Realization Account
Particular
Amount Particular Amount
Debtors 75,000 Creditors   50,000
Stock   40,000 Bank Loan   35,000
Investment   20,000 Provident Fund   15,000
Plant   50,000 Commission Received in Advance   8,000
      Investments Fluctuation Fund   10,000
Cash A/c:          
Commission Received in Advance 5,000 7,500 Cash A/c:    
Outstanding Salary 8,500   Debtors 60,000  
Compensation paid to Employees 17,000   Stock 35,500  
Provident Fund 20,000   Investments 16,000  
Creditors 50,000   Plant 45,000 1,56,500
Bank Loan 35,000 1,35,500      
Anuj’s Capital A/c   7,825 Loss transferred to:    
      Anju’s Capital A/c 21,530  
      Manju’s Capital A/c 21,530  
      Sanju’s Capital A/c 10,765 53,825
    3,28,325     3,28,325

 

 

Partners’ Capital Account
Part. Anju Manju Sanju

Part.

Anju Manju Sanju
To Profit and Loss A/c 1,200 1,200 600 By Balance B/d 50,000 50,000 30,000
To Realization A/c Loss 21,530 21,530 10,765 By Realization A/c 7,825  
               
               
               
To Cash A/c 35,095 27,270 18,635        
  57,825 50,000 30,000   57,825 50,000 30,000

 

 

Bank Account
Particular
Amount Particular Amount
Balance b/d 60,000 Realization A/c   1,35,500
      Anju’s Capital A/c   35,095
Realization A/c   1,56,500 Manju’s Capital A/c   27,270
      Sanju’s Capital A/c   18,635
    2,16,500     2,16,500

 

WORKING NOTE:-

Anju’s commission

Anju’s commission = Assets Realised X 5
100
         
  = 1,56,500 X 5
100
         
  = Rs 7,825    

 

Realisation of the Profit = 50,000 X 90
100
         
  = Rs 45,000    

 

 

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 34 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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