[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)
Practical problem | Q 2 | Page 244
Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under.
Balance Sheets as on 31st March 2018.
Liabilities | Amount ₹ | Assets | Amount ₹ |
Creditors | 28,800 | Building | 1,02,000 |
Bills Payable | 21,600 | Machinery | 73,000 |
Capital A/c’s | Motor Car | 1,67,600 | |
Leela | 2,27,160 | Goodwill | 45,600 |
Manda | 1,44,000 | Investment | 62,400 |
Kunda | 1,08,000 | Debtors | 30,600 |
Stock | 45,000 | ||
Bank | 3,360 | ||
5,29,560 | 5,29,560 |
Leela agreed to take over the Building at ₹ 1,23,600.
Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable.
Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively.
Investments were taken by Kunda at an agreed value of ` 55,440.
Realisation expenses amounted to ₹ 6,800.
Pass necessary entries in the books of ‘Janki Stores.’
SOLUTION: In the books of ‘Janki Stores’
Journal Entries
Date | Particulars | Debit (₹) | Credit (₹) |
1 | Realisation A/c Dr. | 5,26,200 | |
To Building A/c | 1,02,000 | ||
To Machinery A/c | 73,000 | ||
To Motor Car A/c | 1,67,600 | ||
To Goodwill A/c | 45,600 | ||
To Investments A/c | 62,400 | ||
To Debtors A/c | 30,600 | ||
To Stock A/c | 45,000 | ||
(Being sundry assets transferred to Realisation A/c) | |||
2 | Creditors A/c Dr | 28,800 | |
Bills Payable A/c Dr | 21,600 | ||
To Realisation A/c | 50,400 | ||
(Being sundry liabilities transferred to realisation A/c) | |||
3 | Bank A/c Dr | 1,82,760 | |
To Realisation A/c | 1,82,760 | ||
(Being amount received for assets sold) | |||
4 | realisation A/c Dr | 6,800 | |
To Bank A/c | 6,800 | ||
(Being amount paid for realisation expense) | |||
5 | Leela’s Capital A/c Dr | 1,23,600 | |
To Realisation A/c | 1,23,600 | ||
(Being Building taken over by Leela) | |||
6 | Manda’s Capital A/c Dr | 1,21,200 | |
To Realisation A/c | 1,21,200 | ||
( Being Goodwill, Stock, Debtors taken over by Manda) | |||
7 | Kunda’s Capital A/c Dr. | 55,440 | |
To Realisation A/c | 55,440 | ||
(Being Investments taken over by Kunda) | |||
8 | Realisation A/c Dr | 50,400 | |
To Manda’s Capital A/c | 50,400 | ||
(Being creditors and Bills payable amount paid by Manda) | |||
9 | Leela’s Capital A/c Dr | 25,000 | |
Manda’s Capital A/c Dr | 16,667 | ||
Kunda’s Capital A/c Dr | 8,333 | ||
To Realisation A/c | 50,000 | ||
( Being loss of realisation transferred to Partners’ Capital A/c) | |||
10 | Leela’s Capital A/c Dr | 78,560 | |
Manda’s Capital A/c Dr | 56,533 | ||
Kunda’s Capital A/c Dr | 44,227 | ||
To Realisation A/c | 1,79,320 | ||
( Being final settlement made) | |||
1346120 | 1346120 |
Working Notes :
In the books of Leela, Manda and Kunda
Realisation Account
Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
To Sundry Assets A/c | By Sundry Liabilities A/c | ||||
Building | 1,02,000 | Creditors | 28,800 | ||
Machinery | 73,000 | Bills Payable | 21,600 | 50,400 | |
Motor car | 1,67,600 | By Bank A/c | |||
Goodwill | 45,600 | Motor Car | 1,51,080 | ||
Investments | 62,400 | Machinery | 31,680 | 1,82,760 | |
Debtors | 30,600 | By Leela’s Capital A/c | 1,23,600 | ||
Stock | 45,000 | 5,26,200 | Building | ||
To Bank A/c | By Manda’s Capital A/c | ||||
Realisation Expense | 6,800 | Goodwill | 45,600 | ||
To Manda’s Capital A/c | Stock | 45,000 | |||
Creditors | 28,800 | Debtors | 30,600 | 1,21,200 | |
Bills Payable | 21,600 | 50,400 | By Kunda’s Capital A/c | 55,440 | |
Investments | |||||
By Partners’ Capital A/c (Loss on realisation transferred) | |||||
Leela | 25,000 | ||||
Manda | 16,667 | ||||
Kunda | 8,333 | 50,000 | |||
583400 | 583400 |
