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Question 41 Chapter 7 of +2-A
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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: –
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| Realization Account | |||||
| Particular | Amount | Particular | Amount | ||
| Sundry Assets (WN) | 21,250 | Other liabilities | 5,000 | ||
| Cash A/c Liabilities | 5,000 | Cash A/c (Assets realized) | 24,000 | ||
| Profit transferred to: | |||||
| A’s Capital A/c | 1,750 | ||||
| B’s Capital A/c | 1,000 | 2,750 | |||
| 29,000 | 29,000 | ||||
| Partners’ Capital Account | |||||
| Part. | A | B | Part. | A | B |
| By Balance B/d | 7,000 | 4,000 | |||
| By Realization A/c Profit | 1,750 | 1,000 | |||
| To Cash A/c | 8,750 | 5,000 | |||
| 8,750 | 5,000 | 8,750 | 5,000 | ||
| Partners’ Loan Account | |||||
| Part. | A | B | Part. | A | B |
| By Balance B/d | 4,500 | 750 | |||
| To Cash A/c | 4,500 | 750 | |||
| 4,500 | 750 | 4,500 | 750 | ||
| Bank Account | |||||
| Particular | Amount | Particular | Amount | ||
| Realisation A/c Assets | 24,000 | A’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:
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| Memorandum Balance Sheet | |||||
| Particular | Amount | Particular | Amount | ||
| Other liabilities | 5,000 | Sundry Assets | 21,250 | ||
| Capital A/c | |||||
| A | 7,000 | ||||
| B | 4,000 | 11,000 | |||
| 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)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
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