Question 41 Chapter 7 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 41 Chapter 7 of +2-A

Question 41 Chapter 7 of +2-A

40. A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2018. As on that date their capitals were: A 7,000 and B 4,000. There were also due on Loan A/c to A 4,500 and to B 750. The other liabilities amounted to 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised 24,000. Prepare necessary accounts showing the final settlement between partners.

 

 

The solution of Question 41 Chapter  7 of +2-A: –

 

Realization Account
Particular
AmountParticular Amount
Sundry Assets (WN)21,250Other liabilities 5,000
Cash A/c Liabilities 5,000Cash A/c (Assets realized) 24,000
      
Profit transferred to:     
A’s Capital A/c1,750    
B’s Capital A/c1,0002,750   
  29,000  29,000

 

 

Partners’ Capital Account
Part.AB

Part.

AB
   By Balance B/d7,0004,000
   By Realization A/c Profit1,7501,000
      
      
To Cash A/c8,7505,000   
 8,7505,000 8,7505,000

 

Partners’ Loan Account
Part.AB

Part.

AB
   By Balance B/d4,500750
      
      
      
To Cash A/c4,500750   
 4,500750 4,500750

 

Bank Account
Particular
AmountParticular Amount
Realisation A/c Assets24,000A’s Capital A/c 8,750
   B’s Capital A/c 5,000
   A’s Loan A/c 4,500
   B’s Loan A/c 750
   Realization A/c 5,000
  24,000  24,000


Working Note:

 

Memorandum Balance Sheet
Particular
AmountParticular Amount
Other liabilities5,000Sundry Assets 21,250
Capital A/c     
A7,000    
B4,00011,000   
A’s Loan 4,500   
B’s Loan 750   
  21,250  21,250

 

 

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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