OMTEX CLASSES: Devendra and Ganesh were partners sharing profits and losses in the ratio of 3:2. They dissolved the partnership firm on 31st March, 2013 when their position was as follows.:

Balance Sheet as on 31. 03. 2013

The assets realised as follows:

(1) Debtors Rs. 45,000, stock Rs. 1,00,000 and goodwill Rs. 12,500

(2) Motor car was taken over by Devendra for Rs. 35,000 and furniture by Ganesh for Rs. 30,000.

(3) The creditors were paid Rs. 11,250 in full settlement.

(4) The realisation expenses were Rs. 5,000.

Pass necessary journal entries in the books of the firm.

Solution:

Date	Particulars	LF	Debit	Credit
1.	Reserve Fund A/c ……… Dr.		15,000
	To Devendra's Capital A/c			9000
	To Ganesh's Capital A/c			6000
	[Being the Reserve fund Transferred to Partners' capital account at the time of Realisation]

2.	Realisation A/c …………Dr.		231250
	To Debtors			56250
	To Stock			112500
	To Furniture			25000
	Motor car			37500
	[Being the Sundry Assets Transferred to Realisation A/c at book value]

3.	Sundry Creditors A/c .... Dr.		12500
	To Realisation A/c			12500
	[Being the Sundry Liabilities transferred to Realisation A/c]

4.	Cash A/c ……… Dr.		157500
	To Realisation A/c [W.N. 1]			1,57,500
	[Being the Sundry Assets Realised]

5.	Devendra's A/c ………… Dr.		35000
	Ganesh's A/c …………… Dr.		30,000
	To Realisation A/c			65,000
	[Being Motor car and Furniture were taken over by former and later respectively]

6.	Realisation A/c ………… Dr.		11,250
	To Cash A/c			11250
	[Being the Creditors were paid at a discount on Realisation]

7.	Realisation A/c ………… Dr.		5000
	To Cash A/c			5000
	[Being the realisation expenses incurred and paid]

8.	Bank Overdraft A/c ………… Dr.		10000
	To Cash A/c			10000

9.	Devendra's Capital A/c .... Dr.		3750
	Ganesh's capital A/c .... Dr.		2500
	To Realisation A/c			6250
	[Being loss made on Realisation A/c Transferred to Partners Capital A/c]

10.	Devendra's capital A/c ……… Dr		85250
	Ganesh's Capital A/c ………… Dr.		48500
	To Cash A/c			133750
	[Being the final settlement is made between the partners on Realisation]

W.N. 1. Realisation A/c

Particulars	Rs.	Rs.	Particulars	Rs.	Rs.
To Sundry Assets A/c			By Sundry Liabilities A/c
Debtors	56250		Sundry Creditors		12,500
Stock	112500
Furniture	25000		By R.D.D.		6250
Motor Car	37500	231250

To Cash A/c		11,250	By Cash A/c
[Creditors were paid]			Debtors	45000
			Stock	100000
To Cash A/c		5000	Goodwill	12500	157500
[Realisation expenses paid]
			By Devendra's Capital A/c [Motor Car Taken Over]		35000

			By Ganesh 's Capital A/c [Furniture Taken Over]		30,000

			By Loss On Realisation A/c [3:2]
			Devendra	3750
			Ganesh	2500	6250
		247500			247500

W.N. 2. Partners Capital A/c

Particulars	Devendra	Ganesh	Particulars	Devendra	Ganesh
To Realisation A/c	35000	30000	By Balance B/d	115000	75000
To Realisation A/c [3:2] [Loss on Realisation]	3750	2500	By Reserve Fund [3:2]	9000	6000

To Cash A/c [Balancing Fig.]	85250	48500
	124000	81000		124000	81000

W.N. 3. Cash A/c

W.N. 4. Bank Overdraft A/c

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