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
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:

 

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)

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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