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Question 40 Chapter 7 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 40 Chapter 7 of +2- Part
Q-40. - CH-7 - Usha +2 Book 2018 - Solution

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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. 
Creditors25,000Cash at bank 2,000
Bills payable 10,000Debtors                 20,000 
General reserve 27,000Less provision       2,00018,000
Workmen’s compensation3,000Stock 25,200
Mrs   Prakash’s  fund loan 5,000Investments 20,000
Capital A/c : Bills receivable 8,000
Prakash 60,000Machinery 60,000
Kiran 40,000Goodwill 6,000
  Profit & loss A/c19,800
  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.DebitCredit
a)Realisation A/cDr. 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)CreditorsDr. 25,000 
 Bills payableDr. 10,000 
 Provision for bad debtsDr. 2,000 
 Mrs. Prakash Loan A/cDr. 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/cDr. 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/cDr. 7,000 
 To Realisation A/c   7,000
 (Being Kiran’s took over the bills receivable )    
      
e)Realisation A/cDr. 10,000 
 To Kiran’s capital A/c   10,000
 (Being Kiran’s took over the bills payable at book halves )    
      
f)Bank A/cDr. 1,200 
 To Realisation A/c   1,200
 (Being unrecorded assets sold )    
      
g)Realisation A/cDr. 22,500 
 To Bank A/c   22,500
 (Being creditors were settled at 10 % discount )    
      
h)Realisation A/cDr. 8,000 
 To Prakash’s capital A/c   8,000
 (Being contingent liability for a bill discounted settled by Prakash )    
      
i)Realisation A/cDr. 5,000 
 To Prakash’s capital A/c   5,000
 (Being Mrs. Prakash ‘s loan accepted by Prakash )    
      
j)Realisation A/cDr. 2,100 
 To Kiran’s capital A/c   2,100
 (Being realisation expenses met by Kiran)    
      
k)General reserve A/cDr. 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/cDr. 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/cDr. 6,600 
 Kiran ’s capital A/cDr. 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/cDr. 19,200 
 Kiran ’s capital A/cDr. 12,800 
 Rishabh’s capital A/cDr. 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/cDr. 58,900 
 Kiran ’s capital A/cDr. 35,700 
 To Bank A/c   94,600
 (Being the final payment on dissolution )    
      
p)Bank A/cDr. 15,700 
 To Rishabh’s capital A/c   15,700
 (Being the deficiency brought by rishab )    
     
Revaluation A/c
Particulars
AmountParticularsAmount
To Sundry Assets  By provision for bad debts 2,000
Debtors A/c20,000 By Creditors 25,000
Stock A/c25,200 By bills payable 10,000
investments A/c20,000 By Mrs. Prakash loan A/c 5,000
Bill receivable A/c8,000 By bank A/c assets  
Machinery A/c60,000 Stock20,200 
Goodwill A/c6,0001,39,200Debtors15,000 
To Kiran ’s capital A/c bills payable 10,000Machinery40,000 
To Prakash’s capital A/c  Investments18,000 
Contingent liability8,000 Goodwill5,00098,200
Wife’s loan5,00013,000By Kiran ’s capital A/c bills receivable 7,000
To Bank A/c creditors 22,500By bank A/c unrecorded assets 1,200
To Kiran ’s capital A/c Expenses 2,100By loss transferred  
   Prakash’s capital A/c19,200 
   Kiran ’s capital A/c12,800 
   Rishabh’s capital A/c6,40038,400
  1,86,800  1,86,800
Partners’ Capital Account 
ParticularsPrakash Kiran Rishabh
ParticularsPrakash Kiran Rishabh
To balance b/d  11,000By Balance b/d60,00040,000 
To Realisation A/c loss19,20012,8006,400By workmen’s cop. fund1,5001,000500
To Profit & loss A/c9,9006,6003,300By gen. reserve13,5009,0004,500
To Bank A/c 7,000 By realisation A/c   
    Contingent liability8,000  
    Wife’s loan5,000  
    Realisation expenses 2,100 
    Bills payable 10,000 
To Cash A/c58,90035,700By Cash A/c  15,700
 88,00062,10020,700 88,00062,10020,700
Bank A/c 
ParticularsAmountParticularsAmount
To balance b/d 2,000By realisation A/c  
To Realisation A/c  Liabilities paid 6,140
Assets realised 98,200By Y’s capital A/c 1,933
To Realisation A/c 1,200By Z’s capital A/c 717
Recorded Assets realised     
To Rishabh’s capital A/c 15,700   
      
  1,17,100  1,17,100

Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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