X and Y are equal partners. The firm was dissolved on 31st March, 2012.

The following is their Balance Sheet as on 31st March, 2012.

Liabilities	Rs.	Rs.	Assets	Rs.	Rs.
X’s Capital Y’s Capital Reserve Fund X’s Loan Creditors		40000 30000 8000 2000 15000	Building Machinery Furniture Debtors Less: R.D.D. Stock Investments Commission Receivable Bank	8800 - 800	30000 10000 12000 8000 20000 4000 1000 10000
		95000			95000

The firm was dissolved on 31st March, 2012. 

(i) The Assets realised as follows:

Stock Rs. 19,000, Debtors Rs. 7,500, Machinery Rs. 11,000, Building Rs. 14,000

ii. Y took over the investments Rs. 5000 and Furniture at Book Value.

iii. X agreed to accept Rs. 1500 in full settlement of his Loan Account.

iv. Dissolution expenses amounted to Rs. 2000.

v. Commission Receivable could not be recovered.

Prepare Realisation Account, X’s Loan Account, Capital Accounts and Bank Account.

Solution:

Realisation Account

Particulars	Rs.	Rs.	Particulars	Rs.	Rs
To Sundry Assets			By Sundry Liabilities
Building	30000		Creditors		15000
Machinery	10000		By R.D.D. A/c		800
Furniture	12000		By Bank A/c
Debtors	8800		Stock	19000
Stock	20000		Debtors	7500
Investments	4000		Machinery	11000
Commission Receivable	1000	85800	Building	14000	51500
To Bank A/c		2000	BY Y’s Capital A/c
(Dissolution Expenses)			Investments	5000
To Bank A/c			Furniture	12000	17000
Creditors		15000	By X’s Loan A/c		500
			By Loss on Realisation A/C
			X	9000
			Y	9000	18000
		102800			102800

Partners Capital Account

Particulars	X	Y	Particulars	X	Y
To Realisation A/c		17000	By Balance b/d	40000	30000
To Realisation A/c (loss)	9000	9000	By Reserve Fund (1:1)	4000	4000
To Bank A/c	35000	8000
	44000	34000		44000	34000

X’s Loan Account

Particulars	Rs.	Rs.	Particulars	Rs.	Rs
To Bank A/c		1500	By Balance b/d		2000
To Realisation A/c		500
		2000			2000

Bank Account

Particulars	Rs.	Rs.	Particulars	Rs.	Rs
To Balance b/d		10000	By Realisation A/c		2000
To Realisation A/c		51500	By Realisation A/c		15000
			By X’s Loan A/c		1500
			By X’s Capital A/c		35000
			By Y’s Capital A/c		8000
		61500			61500