Page No 8.58:
Question 33:
A
and
B are partners in a firm sharing profits and losses in the ratio of 2
: 1. On 31st March, 2019, their Balance Sheet was:
|
|
|
|||||
Liabilities |
Amount |
Assets |
Amount |
||||
Bank
Overdraft
|
30,000 |
Cash
in Hand |
6,000 |
||||
General
Reserve |
56,000 |
Bank
Balance |
10,000 |
||||
Investments
Fluctuation Reserve |
20,000 |
Sundry
Debtor |
26,000 |
|
|||
A's Loan |
34,000 |
Less: Provision for
Doubtful Debtor |
2,000 |
24,000 |
|||
Capital
A/c: |
|
|
|
||||
A |
50,000 |
Investments |
40,000 |
||||
|
|
|
Stock |
|
10,000 |
||
|
|
Furniture |
|
10,000 |
|||
|
|
Building |
|
60,000 |
|||
|
|
B's Capital |
|
30,000 |
|||
|
1,90,000 |
|
1,90,000 |
||||
|
|
|
|
||||
On that date, the partners decide to dissolve the firm. A took over
Investments at an agreed valuation of ` 35,000. Other
assets were realised as follows:
Sundry Debtor: Full amount. The firm could realise Stock at 15%
less and Furniture at 20% less than the book value. Building was
sold at ` 1,00,000.
Compensation to employees paid by the firm amounted to
`
10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation
Account, Partners' Capital Accounts and Bank Account.
Answer:
Realisation Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
|||||
Sundry Debtor |
26,000 |
Provision for Doubtful Debts |
2,000 |
|||||
Investments |
40,000 |
Bank Overdraft |
30,000 |
|||||
Stock |
10,000 |
Investments Fluctuation Reserve |
20,000 |
|||||
Furniture |
10,000 |
|
|
|||||
Building |
60,000 |
A’s Capital A/c (Investments) |
35,000 |
|||||
Bank A/c: |
|
Bank A/c: |
|
|||||
Compensation to |
10,000 |
|
Sundry Debtor |
26,000 |
|
|||
Bank Overdraft |
30,000 |
40,000 |
Stock |
8,500 |
|
|||
Profit transferred to: |
|
Furniture |
8,000 |
|
||||
A’s Capital A/c |
29,000 |
|
Building |
1,00,000 |
1,42,500 |
|||
B’s Capital A/c |
14,500 |
43,500 |
|
|
||||
|
2,29,500 |
|
2,29,500 |
|||||
|
|
|
|
|||||
Partners Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
Particulars |
A |
B |
||
Balance b/d |
– |
30,000 |
Balance b/d |
50,000 |
– |
||
Realisation A/c (Investment) |
35,000 |
|
General Reserve A/c |
37,333 |
18,667 |
||
Bank A/c |
81,333 |
3,167 |
Realisation A/c (Profit ) |
29,000 |
14,500 |
||
|
|
|
|
|
|
||
|
1,16,333 |
33,167 |
|
1,16,333 |
33,167 |
||
|
|
|
|
|
|
||
A’s Loan Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
||
|
|
Balance b/d |
34,000 |
||
Bank A/c |
34,000 |
|
|
||
|
34,000 |
|
34,000 |
||
|
|
|
|
||
Bank Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
|
Balance b/d |
10,000 |
Realisation A/c |
40,000 |
|
Cash A/c |
6,000 |
A’s Capital A/c |
81,333 |
|
Realisation A/c |
1,42,500 |
B’s Capital A/c |
3,167 |
|
|
|
A’s Loan A/c |
34,000 |
|
|
1,58,500 |
|
1,58,500 |
|
|
|
|
|
|
Page No 8.58:
Question 34:
Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the 31st March, 2019 when the Balance Sheet of the firm as under:
|
|
|
|||||
Liabilities |
Amount |
Assets |
Amount |
||||
Sundry
Creditors |
20,000 |
Bank |
7,500 |
||||
Bills
Payable |
25,500 |
Sundry
Debtor |
58,000 |
||||
Babu's
Loan |
30,000 |
Stock |
|
39,500 |
|||
Capital
A/cs: |
|
Machinery |
48,000 |
||||
Ashok |
70,000 |
|
Investments |
|
42,000 |
||
Babu |
55,000 |
|
Freehold
Property |
|
50,500 |
||
Chetan |
27,000 |
1,52,000 |
|
|
|
||
Current
A/cs: |
|
|
|
|
|
||
Ashok |
10,000 |
|
|
|
|
||
Babu |
5,000 |
|
|
|
|
||
Chetan |
3,000 |
18,000 |
|
|
|
||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
2,45,500 |
|
2,45,500 |
||||
|
|
|
|
||||
The Machinery was taken over by Babu for ` 45,000, Ashok
took over the Investments for ` 40,000 and
Freehold property took over by Chetan at ` 55,000. The
remaining Assets realised as follows:
Sundry Debtor ` 56,500 and Stock
`
36,500. Sundry Creditors were settled at
discount of 7%. A Office computer, not shown in the books of accounts realised
`
9,000. Realisation expenses amounted to ` 3,000.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
Answer:
Realisation
Account |
|||||||||
Dr. |
|
Cr. |
|
||||||
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||||||
Sundry
Debtor |
58,000 |
Sundry
Creditors |
20,000 |
||||||
Stock |
39,500 |
Bills
Payable |
25,500 |
||||||
Machinery |
48,000 |
Ashok’s
Current A/c (Investment) |
40,000 |
||||||
Investment |
42,000 |
Babu’s
Current A/c (Machinery) |
45,000 |
||||||
Freehold
property |
50,500 |
Chetan’s
Current A/c |
55,000 |
||||||
Bank: |
|
(Freehold
property) |
|
||||||
Sundry
Creditors |
18,600 |
|
Bank: |
|
|||||
Bills
Payable |
25,500 |
|
Sundry Debtor |
56,500 |
|
||||
Expenses |
3,000 |
47,100 |
Stock |
36,500 |
|
||||
Realisation
Profit |
|
Unrecorded Computer |
9,000 |
1,02,000 |
|||||
Ashok’s
Current A/c |
1,200 |
|
|
|
|
||||
Babu’s
Current A/c |
800 |
|
|
|
|
||||
Chetan’s
Current A/c |
400 |
2,400 |
|
|
|
||||
|
|
|
|
|
|||||
|
|
2,87,500 |
|
2,87,500 |
|||||
|
|
|
|
|
|||||
Partners'
Current Account |
|
|||||||||
Dr. |
|
Cr. |
|
|||||||
Particulars |
Ashok |
Babu |
Chetan |
Particulars |
Ashok |
Babu |
Chetan |
|||
Realisation |
40,000 |
45,000 |
55,000 |
Balance
b/d |
10,000 |
5,000 |
3,000 |
|||
(Assets
taken) |
|
|
|
Realisation (Profit) |
1,200 |
800 |
400 |
|||
|
|
|
|
Ashok's
Capital A/c |
28,800 |
|
|
|||
|
|
|
|
Babu's
Capital A/c |
|
39200 |
|
|||
|
|
|
|
Chetan's
Capital A/c |
|
|
51600 |
|||
|
40,000 |
45,000 |
55,000 |
|
40,000 |
45,000 |
55,000 |
|||
|
|
|
|
|
|
|
|
|||
Partners'
Capital Account |
|||||||||
Dr. |
|
Cr. |
|||||||
Particulars |
Ashok |
Babu |
Chetan |
Particulars |
Ashok |
Babu |
Chetan |
||
Ashok's
Current A/c |
28,800 |
|
|
Balance
b/d |
70,000 |
55,000 |
27,000 |
||
Babu's
Current A/c |
|
39200 |
|
Bank
A/c |
|
|
24,600 |
||
Chetan's
Current A/c |
|
|
51600 |
|
|
|
|
||
Bank
A/c |
41,200 |
15,800 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
70,000 |
55,000 |
51,600 |
|
70,000 |
55,000 |
51,600 |
||
|
|
|
|
|
|
|
|
||
Babu’s Loan A/c |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||
Bank
A/c |
30,000 |
Balance
b/d |
30,000 |
||
|
|
|
|
||
|
30,000 |
|
30,000 |
||
|
|
|
|
||
Bank Account |
|
||||
Dr. |
|
Cr. |
|||
Particulars |
Amount (
`) |
Particulars |
Amount (
`) |
||
Balance
b/d |
7,500 |
Realisation A/c
(Payment of Expenses& Liabilities) |
47,100 |
||
Realisation A/c
(Assets realised) |
102,000 |
and
Liabilities) |
|
||
Chetan’s
Capital A/c |
24,600 |
Babu’s
Loan |
30,000 |
||
|
|
Ashok’s
Capital A/c |
41,200 |
||
|
|
Babu’s
Capital A/c |
15,800 |
||
|
|
|
|
||
|
1,34,100 |
|
1,34,100 |
||
|
|
|
|
||
Page No 8.59:
Question 35:
Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2019, the Balance Sheet of the firm was:
|
|
|
|||||
Liabilities |
Amount |
Assets |
Amount |
||||
Sundry
Creditors |
75,000 |
Cash |
6,000 |
||||
Bills
Payable |
30,000 |
Bank |
30,000 |
||||
Rita's
Loan |
15,000 |
Stock |
75,000 |
||||
Reserve
|
24,000 |
Book
Debts |
66,000 |
|
|||
Capital
A/cs: |
|
Less:
Provision
for Doubtful Debts |
6,000 |
60,000 |
|||
Rita |
90,000 |
|
|
|
|
||
Sobha |
30,000 |
1,20,000 |
Plant
and Machinery |
|
45,000 |
||
|
|
Land
and Building |
48,000 |
||||
|
|
|
|
|
|||
|
2,64,000 |
|
2,64,000 |
||||
|
|
|
|
||||
The firm was dissolved on the date given above. The following transactions took
place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised ` 54,000; balance of the Stock
was sold at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a
discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised ` 75,000. Land and
Building ` 1,20,000.
(e) Rita took the goodwill of the firm at a value of
`
30,000.
(f) An unrecorded asset of ` 6,900 was handed
over to an unrecorded liability of ` 6,000 in full
settlement.
(g) Realisation expenses were ` 5,250.
Show Realisation Account, Partners' Capital Accounts and Bank Account in the
books of the firm.
Answer:
Realisation Account |
||||||
Dr. |
|
Cr. |
||||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
|||
Stock |
75,000 |
Provision for Doubtful Debts |
6,000 |
|||
Book Debts |
66,000 |
Sundry Creditors |
75,000 |
|||
Plant and Machinery |
45,000 |
Bills Payable |
30,000 |
|||
Land and building |
48,000 |
|
|
|||
|
|
Rita’s Capital A/c |
30,000 |
|||
|
|
(Goodwill taken over) |
|
|||
Bank A/c: |
|
Rita’s Loan A/c (Stock taken over) |
15,000 |
|||
Sundry Creditors |
67,500 |
|
|
|
||
Bills Payable |
30,000 |
|
Bank A/c: |
|
||
Expenses |
5,250 |
1,02,750 |
Book Debts |
54,000 |
|
|
Profit transferred to: |
|
Stock |
73,125 |
|
||
Rita’s Capital A/c |
70,688 |
|
Plant and Machinery |
75,000 |
|
|
Sobha’s Capital A/c |
70,687 |
1,41,375 |
Land and Building |
1,20,000 |
3,22,125 |
|
|
4,78,125 |
|
4,78,125 |
|||
|
|
|
|
|||
|
|
|
|
|||
|
|
|
|
|
|
|
Partners Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
Rita ( `) |
Sobha ( `) |
Particulars |
Rita ( `) |
Sobha ( `) |
||
Realisation A/c (Assets) |
30,000 |
– |
Balance b/d |
90,000 |
30,000 |
||
|
|
|
Reserve Fund |
12,000 |
12,000 |
||
Bank A/c |
1,42,688 |
1,12,687 |
Realisation A/c (Profit) |
70,688 |
70,687 |
||
|
|
|
|
|
|
||
|
1,72,688 |
1,12,687 |
|
1,72,688 |
1,12,687 |
||
|
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Rita’s Loan A/c |
|||
Dr. |
Cr. |
||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
To Realisation A/c |
15,000 |
Balance b/d |
15,000 |
|
|
|
|
|
15,000 |
|
15,000 |
|
|
|
|
|
|
|
|
Bank Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount ( `) |
Particulars |
Amount ( `) |
||
Balance b/d |
30,000 |
Realisation A/c |
1,02,750 |
||
Cash A/c |
6,000 |
Rita’s Capital A/c |
1,42,688 |
||
Realisation A/c |
3,22,125 |
Sobha’s Capital A/c |
1,12,687 |
||
|
|
|
|
||
|
3,58,125 |
|
3,58,125 |
||
|
|
|
|
||
Working Notes:
WN1: Value of Stock Taken Over
by Rita
Stock taken over by Rita=Book Value of Stock×25100×80100
[Since stock is taken over at a discount of 20%]Stock taken over by Rita=75,000×25100×80100=15,000
WN2: Value of Stock Sold
Book Value of Balance of Stock Sold=Value of Stock - Stock Taken over by RitaBook Value of Balance of Stock Sold
=(75,000 - 18,750)= 56,250
Value of Stock Sold=56,250×130100=73,125 [Sold at 30% Profit]
Page No 8.59:
Question 36:
Following is the Balance Sheet of Arvind and Balbir as at 31st
March, 2019:
Liabilities |
Amount ( `) |
Assets |
Amount ( `) |
||
Trade
Creditors |
45,000 |
Cash |
750 |
||
Bills
Payable |
12,000 |
Bank |
12,000 |
||
M
`.
Arvind's Loan |
7,500 |
Stock |
7,500 |
||
M
`.
Balbir's Loan |
15,000 |
Investments |
15,000 |
||
Reserve
Fund |
15,000 |
Book
Debts |
30,000 |
|
|
Investments
Fluctuation Reserve |
1,500 |
Less: Provision for
Doubtful Debts |
3,000 |
27,000 |
|
Capital
A/cs: |
|
Building |
|
22,500 |
|
Arvind |
15,000 |
|
Plant |
30,000 |
|
Balbir |
15,000 |
30,000 |
Goodwill |
6,000 |
|
|
|
|
Profit
and Loss A/c |
5,250 |
|
|
1,26,000 |
|
1,26,000 |
||
|
|
|
|
The firm was dissolved on the above date under the following arrangement:
(a) Arvind promised to pay off M `. Arvind's Loan
and took Stock at ` 6,000.
(b) Balbir took half the Investments @ 10% discount.
(c) Book Debts realised ` 28,500.
(d) Trade Creditors and Bills Payable
were due on average basis of one month after 31st March, but were paid
immediately on 31st March @ 2% discount per annum.
(e) Plant realised ` 37,500; Building
`
60,000; Goodwill ` 9,000 and remaining
Investments ` 6,750.
(f) An old typewriter, written off completely from the firm's books, now
estimated to realise ` 450. It was taken by Balbir
at this estimated price.
(g) Realisation expenses were ` 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.
Answer:
Realisation
Account |
||||||||
Dr. |
|
Cr. |
||||||
Particulars |
Amount ` |
Particulars |
Amount ` |
|||||
Stock |
7,500 |
Provision
for Doubtful Debts |
3,000 |
|||||
Investments |
15,000 |
Trade
Creditors |
45,000 |
|||||
Book
Debts |
30,000 |
Bills
Payable |
12,000 |
|||||
Building |
22,500 |
M
`.
Arvid’s Loan |
7,500 |
|||||
Plant |
30,000 |
M
`.
Balbir’s Loan |
15,000 |
|||||
Goodwill |
6,000 |
Investments
Fluctuation Reserve |
1,500 |
|||||
Arvind’s
Capital A/c (M `. Arvind’s Loan) |
7,500 |
Arvind’s
Capital A/c (Stock) |
6,000 |
|||||
Bank
A/c: |
|
Balbir’s
Capital A/c (Investments 7500 × 90%) |
6,750 |
|||||
Trade
Creditors |
44,925 |
|
Balbir’s
Capital A/c (Unrecorded Typewriter ) |
450 |
||||
Bills
Payable |
11,980 |
|
Bank
A/c: |
|
||||
Expense |
1,500 |
|
Book
Debts |
28,500 |
|
|||
M
`.
Balbir’s Loan |
15,000 |
73,405 |
Plant |
37,500 |
|
|||
Profit
transferred to: |
|
Building |
60,000 |
|
||||
Arvind’s
Capital A/c |
23,522.50 |
|
Goodwill |
9,000 |
|
|||
Balbir’s
Capital A/c |
23,522.50 |
47,045 |
Investments |
6,750 |
1,41,750 |
|||
|
|
|
|
|||||
|
2,38,950 |
|
2,38,950 |
|||||
|
|
|
|
|||||
Partners Capital
Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
Arvind |
Balbir |
Particulars |
Arvind |
Balbir |
||
Profit
and Loss A/c |
2,625 |
2,625 |
Balance
b/d |
15,000 |
15,000 |
||
Realisation
A/c (Assets) |
6,000 |
7,200 |
Realisation
A/c |
7,500 |
– |
||
Bank
A/c |
44,897.50 |
36,197.50 |
Reserve
Fund |
7,500 |
7,500 |
||
|
|
|
Realisation
A/c (Profit) |
23,522.50 |
23,522.50 |
||
|
|
|
|
|
|
||
|
53,522.50 |
46,022.50 |
|
53,522.50 |
46,022.50 |
||
|
|
|
|
|
|
||
Bank Account |
|||||
Dr. |
|
Cr. |
|||
Particulars |
Amount ` |
Particulars |
Amount ` |
||
Balance
b/d |
12,000 |
Realisation
A/c |
73,405 |
||
Cash
A/c |
750 |
Arvind’s
Capital A/c |
44,897.5 |
||
Realisation
A/c |
1,41,750 |
Balbir’s
Capital A/c |
36,197.5 |
||
|
|
|
|
||
|
1,54,500 |
|
1,54,500 |
||
|
|
|
|
||
Working Notes:
Creditors
|
45,000 |
Less:2% discount for
1 month |
(75) |
Payment made to
Creditors |
44,925 |
|
|
Bills
Payable |
12,000 |
Less:
2%
discount for 1 month |
(20) |
Payment made for
Bills Payable |
11,980 |
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