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 AmountAssets Amount
Bank Loan 1,500Trademarks 1,200
Creditors for Goods 8,000Machinery 12,000
Bills Payable 500Furniture 400
Capital A/cs:  Stock 6,000
Krishna16,000 Debtors9,000 
Arjun6,00022,000Provision for Bad4008,600
   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
AmountParticular Amount
Trade Marks1,200Provision for Doubtful Debts 3,000
Machinery 12,000Bank Loan 45,000
Furniture 400Creditors for Goods 12,000
Stock 6,000Bills Payable 7,500
Debtors 9,000   
   Bank A/c:  
Bank A/c :-  Goodwill1,000 
Bank Loan1,500 Debtors8,100 
Creditors7,920 Trade Marks800 
Bills Payable500 Unrecorded Assets200010,100
Expense800 Krishna’s Capital A/c:  
   Machinery14,400 
   Stock in Trade3,60018,000
   Loss on Revaluation  
   Krishna’s Capital A/c656 
   Arjun’s Capital A/c164820
  39,320  39,320

 

 

Partners’ Capital Account
Part.KrishnaArjun

Part.

KrishnaArjun
To Advertisement Suspense A/c800200By Balance B/d16,0006,000
To Realization A/c Assets18,000By Realization A/c38,000
To Realization A/c Loss656164   
      
To Cash A/c 5,363By cash A/c3,456 
 19,4566,000 19,4566,000

 

Bank Account
Particular
AmountParticular Amount
Balance b/d2,800Realization A/c 10,720
Krishna’s Capital A/c 10,100Arjun’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

 

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

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