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Question 40 Chapter 7 of +2-Part – 1
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40. (Journal/Realisation A/e/Partner’s Capital A/e) Prakash, Kiran and Rishabh are partners in a firm sharing profits and losses in the ratio of 3:21 Their Balance sheet an at 31 March, 2015 stood as follows:
| Liabilities | Rs. | Assets | Rs. |
| Creditors | 25,000 | Cash at bank | 2,000 |
| Bills payable | 10,000 | Debtors 20,000 | |
| General reserve | 27,000 | Less provision 2,000 | 18,000 |
| Workmen’s compensation | 3,000 | Stock | 25,200 |
| Mrs Prakash’s fund loan | 5,000 | Investments | 20,000 |
| Capital A/c : | Bills receivable | 8,000 | |
| Prakash | 60,000 | Machinery | 60,000 |
| Kiran | 40,000 | Goodwill | 6,000 |
| Profit & loss A/c | 19,800 | ||
| Rishabh’s capital A/c | 11,000 | ||
| 1,70,000 | 1,70,000 |
On the above date, the firm was dissolved and the following transactions took place:
(i)The Assets were sold off for the following amounts:
Stock-Rs. 20,200, Debtors Rs. 15,000;
Machinery Rs. 40,000 and Investments Rs. 18,000.
(ii) Kiran took over the Bill Receivable at Rs. 7.000 and the Bills Payable at book value.
(iii) There were an unrecorded assets of Rs. 4,000 which was sold for Rs. 1,200.
(iv) Prakash agreed to pay off is wife’s loan.
(v) A contingent liability for a bill discounted at Rs. 8,000 was settled by Prakash.
(vi) Creditors were settled at a discount of 10% and Goodwill realised Rs. 5,000.
(vii) Realisation expenses were Rs. 2,100 which were met by Kiran.
You are required to Pass the necessary journal entries, prepare the Realisation Account on the dissolution of the firm and capital accounts of the partners
The solution of Question 40 Chapter 7 of +2 Part – 1: –
| Journal | |||||
| Date | Particulars | L.F. | Debit | Credit | |
| a) | Realisation A/c | Dr. | 1,39,200 | ||
| To Debtors A/c | 20,000 | ||||
| To Stock A/c | 25,200 | ||||
| To investments A/c | 20,000 | ||||
| To Bill receivable A/c | 8,000 | ||||
| To Machinery A/c | 60,000 | ||||
| To Goodwill A/c | 6,000 | ||||
(Being different assets transferred to realisation A/c ) | |||||
| b) | Creditors | Dr. | 25,000 | ||
| Bills payable | Dr. | 10,000 | |||
| Provision for bad debts | Dr. | 2,000 | |||
| Mrs. Prakash Loan A/c | Dr. | 5,000 | |||
| To Realisation A/c | 42,000 | ||||
| (Being the creditors , bill payable . Provision for bad debts & Mrs. Prakash loan transferred to Realisation A/c ) | |||||
| c) | Bank A/c | Dr. | 98,200 | ||
| To Realisation A/c | 98,200 | ||||
| (Being realisation of different addets stock 22,000+debtors 15,000+machinery 40,000 +investment 18,000+ Goodwill 5,000 ) | |||||
| d) | Kiran’s capital A/c | Dr. | 7,000 | ||
| To Realisation A/c | 7,000 | ||||
| (Being Kiran’s took over the bills receivable ) | |||||
| e) | Realisation A/c | Dr. | 10,000 | ||
| To Kiran’s capital A/c | 10,000 | ||||
| (Being Kiran’s took over the bills payable at book halves ) | |||||
| f) | Bank A/c | Dr. | 1,200 | ||
| To Realisation A/c | 1,200 | ||||
| (Being unrecorded assets sold ) | |||||
| g) | Realisation A/c | Dr. | 22,500 | ||
| To Bank A/c | 22,500 | ||||
| (Being creditors were settled at 10 % discount ) | |||||
| h) | Realisation A/c | Dr. | 8,000 | ||
| To Prakash’s capital A/c | 8,000 | ||||
| (Being contingent liability for a bill discounted settled by Prakash ) | |||||
| i) | Realisation A/c | Dr. | 5,000 | ||
| To Prakash’s capital A/c | 5,000 | ||||
| (Being Mrs. Prakash ‘s loan accepted by Prakash ) | |||||
| j) | Realisation A/c | Dr. | 2,100 | ||
| To Kiran’s capital A/c | 2,100 | ||||
| (Being realisation expenses met by Kiran) | |||||
| k) | General reserve A/c | Dr. | 27,000 | ||
| To Prakash’s capital A/c | 13,500 | ||||
| To Kiran ’s capital A/c | 9,000 | ||||
| To Rishabh’s capital A/c | 4,500 | ||||
| (Being general reserve distributed among the partners in PSR) | |||||
| l) | Woman Compensations Fund A/c | Dr. | 3,000 | ||
| To Prakash’s capital A/c | 1,500 | ||||
| To Kiran ’s capital A/c | 1,000 | ||||
| To Kishan’s capital A/c | 500 | ||||
| (Being women compensation fund distributed among the partners) | |||||
| Dr. | 9,900 | ||||
| m) | Prakash’s capital A/c | Dr. | 6,600 | ||
| Kiran ’s capital A/c | Dr. | 3,300 | |||
| Rishabh’s capital A/c | 19,800 | ||||
| To profit & loss A/c | |||||
| (Being the undistributed loss distributed among the partners in ratio 3:2:1) | |||||
| n) | Prakash’s capital A/c | Dr. | 19,200 | ||
| Kiran ’s capital A/c | Dr. | 12,800 | |||
| Rishabh’s capital A/c | Dr. | 6,400 | |||
| To realisation A/c | 38,400 | ||||
| (Being realisation loss distributed among the partners in ratio 3:2:1) | |||||
| o) | Prakash’s capital A/c | Dr. | 58,900 | ||
| Kiran ’s capital A/c | Dr. | 35,700 | |||
| To Bank A/c | 94,600 | ||||
| (Being the final payment on dissolution ) | |||||
| p) | Bank A/c | Dr. | 15,700 | ||
| To Rishabh’s capital A/c | 15,700 | ||||
| (Being the deficiency brought by rishab ) | |||||
| Revaluation A/c | |||||
| Particulars | Amount | Particulars | Amount | ||
| To Sundry Assets | By provision for bad debts | 2,000 | |||
| Debtors A/c | 20,000 | By Creditors | 25,000 | ||
| Stock A/c | 25,200 | By bills payable | 10,000 | ||
| investments A/c | 20,000 | By Mrs. Prakash loan A/c | 5,000 | ||
| Bill receivable A/c | 8,000 | By bank A/c assets | |||
| Machinery A/c | 60,000 | Stock | 20,200 | ||
| Goodwill A/c | 6,000 | 1,39,200 | Debtors | 15,000 | |
| To Kiran ’s capital A/c bills payable | 10,000 | Machinery | 40,000 | ||
| To Prakash’s capital A/c | Investments | 18,000 | |||
| Contingent liability | 8,000 | Goodwill | 5,000 | 98,200 | |
| Wife’s loan | 5,000 | 13,000 | By Kiran ’s capital A/c bills receivable | 7,000 | |
| To Bank A/c creditors | 22,500 | By bank A/c unrecorded assets | 1,200 | ||
| To Kiran ’s capital A/c Expenses | 2,100 | By loss transferred | |||
| Prakash’s capital A/c | 19,200 | ||||
| Kiran ’s capital A/c | 12,800 | ||||
| Rishabh’s capital A/c | 6,400 | 38,400 | |||
| 1,86,800 | 1,86,800 | ||||
| Partners’ Capital Account | |||||||
| Particulars | Prakash | Kiran | Rishabh | Particulars | Prakash | Kiran | Rishabh |
| To balance b/d | 11,000 | By Balance b/d | 60,000 | 40,000 | |||
| To Realisation A/c loss | 19,200 | 12,800 | 6,400 | By workmen’s cop. fund | 1,500 | 1,000 | 500 |
| To Profit & loss A/c | 9,900 | 6,600 | 3,300 | By gen. reserve | 13,500 | 9,000 | 4,500 |
| To Bank A/c | 7,000 | By realisation A/c | |||||
| Contingent liability | 8,000 | ||||||
| Wife’s loan | 5,000 | ||||||
| Realisation expenses | 2,100 | ||||||
| Bills payable | 10,000 | ||||||
| To Cash A/c | 58,900 | 35,700 | – | By Cash A/c | 15,700 | ||
| 88,000 | 62,100 | 20,700 | 88,000 | 62,100 | 20,700 | ||
| Bank A/c | |||||
| Particulars | Amount | Particulars | Amount | ||
| To balance b/d | 2,000 | By realisation A/c | |||
| To Realisation A/c | Liabilities paid | 6,140 | |||
| Assets realised | 98,200 | By Y’s capital A/c | 1,933 | ||
| To Realisation A/c | 1,200 | By Z’s capital A/c | 717 | ||
| Recorded Assets realised | |||||
| To Rishabh’s capital A/c | 15,700 | ||||
| 1,17,100 | 1,17,100 | ||||
End of Solution
Check Out the Solution of all questions of this chapter:
The solution to all questions of Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
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Question 18 Chapter 7 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Question 36 Chapter 7 of +2 Part-1 – USHA Publication 12 Class Part – 1
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Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
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Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
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