Question 38 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 38 Chapter 7 of +2-A

Question 38 Chapter 7 of +2-A

38. Krishna and Arjun are partners in a firm. They share profits in the ratio of 4: 1. They decided to dissolve the firm on 31st March 2018 at which date their Balance Sheet stood as:

Liabilities   Amount Assets   Amount
Bank Loan   1,500 Trademarks   1,200
Creditors for Goods   8,000 Machinery   12,000
Bills Payable   500 Furniture   400
Capital A/cs:     Stock   6,000
Krishna 16,000   Debtors 9,000  
Arjun 6,000 22,000 Provision for Bad 400 8,600
      Cash at Bank   2,800
      Advertisement Suspense   1,000
    32,000     32,000

The realization shows the following results:
a Goodwill was sold for 1,000.
b Debtors were realized at book value less 10%.
c Trademarks were realized for 800.
d Machinery and Stock-in-Trade were taken over by Krishna for 14,400 and 3,600 respectively.
e An unrecorded asset estimated at 500 was sold for 200.
f Creditors for goods were settled at a discount of 80. The expenses on realization were 800.
Prepare Realization Account, Partners’ Capital Accounts and Bank Account.

 

The solution of Question 38 Chapter  7 of +2-A: –

 

Realization Account
Particular
Amount Particular Amount
Trade Marks 1,200 Provision for Doubtful Debts   3,000
Machinery   12,000 Bank Loan   45,000
Furniture   400 Creditors for Goods   12,000
Stock   6,000 Bills Payable   7,500
Debtors   9,000      
      Bank A/c:    
Bank A/c :-     Goodwill 1,000  
Bank Loan 1,500   Debtors 8,100  
Creditors 7,920   Trade Marks 800  
Bills Payable 500   Unrecorded Assets 2000 10,100
Expense 800   Krishna’s Capital A/c:    
      Machinery 14,400  
      Stock in Trade 3,600 18,000
      Loss on Revaluation    
      Krishna’s Capital A/c 656  
      Arjun’s Capital A/c 164 820
    39,320     39,320

 

 

Partners’ Capital Account
Part. Krishna Arjun

Part.

Krishna Arjun
To Advertisement Suspense A/c 800 200 By Balance B/d 16,000 6,000
To Realization A/c Assets 18,000 By Realization A/c 38,000
To Realization A/c Loss 656 164      
           
To Cash A/c   5,363 By cash A/c 3,456  
  19,456 6,000   19,456 6,000

 

Bank Account
Particular
Amount Particular Amount
Balance b/d 2,800 Realization A/c   10,720
Krishna’s Capital A/c   10,100 Arjun’s Capital A/c   5,636
Realization A/c   3,456      
           
           
    16,356     16,356

 

 

 

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 38 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

Leave a Reply