[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)
Practical problem | Q 8 | Page 248
Sitaram, Gangaram, and Rajaram are partners sharing Profits and Losses in the ratio of 4:2:3. On. 1st April 2019 they agreed to dissolve the partnership, their Balance Sheet was as follows :
Balance Sheets as on 31st March 2019
Liabilities | Amount ₹ | Assets | Amount ₹ |
Capital: | Building | 55,000 | |
Sitaram | 65,000 | Machinery | 25,000 |
Gangaram | 45,000 | Furniture | 12,000 |
Rajaram | 7,000 | Investment | 15,000 |
Reserve Fund | 18,000 | Bills Receivable | 3,500 |
Profit and Loss Account | 5,400 | Sundry Debtors | 21,000 |
Loan from Tukaram | 10,000 | Stock | 28,000 |
Sundry Creditors | 12,000 | Cash in hand | 5,500 |
Bills Payable | 4,600 | Cash at Bank | 2000 |
1,67,000 | 1,67,000 |
The assets realised: Building ₹ 46,750 Machinery ₹ 18,550 Furniture ₹ 9,600; Investment ₹ 10,650 Bill Receivable and Debtors ₹ 20,750; All the liabilities were paid off. The cost of realisation was ₹ 800. Rajaram becomes bankrupt and ₹ 1,100 only was recovered from his estate.
Show Realisation Account, Bank Account, and Capital Account of the partners.
SOLUTION: In the books of Sitaram, Gangaram and Rajaram
Realisation Account.
Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
To Sundry Assets A/c | By Sundry Liabilities A/c | ||||
Building | 55,000 | Loan from Tukaram | 10,000 | ||
Machinery | 25,000 | Sundry Creditors | 12,000 | ||
Furniture | 12,000 | Bills Payable | 4,600 | 26,600 | |
Investments | 15,000 | By Bank A/c | |||
Bills receivable | 3,500 | Building | 46,750 | ||
Sundry Debtors | 21,000 | Machinery | 18,550 | ||
Stock | 28,000 | 1,59,500 | Furniture | 9,600 | |
To Bank A/c | Investments | 10,650 | |||
Loan from Tukaram | 10,000 | Bills receivable and Debtors | 20,750 | 1,06,300 | |
Realisation Expense | 800 | By Partners’ Capital A/c (Loss on realisation transferred) | |||
Sundry Creditors | 12,000 | Sitaram | 24,000 | ||
Bills Payable | 4,600 | 27,400 | Gangaram | 12,000 | |
Rajaram | 18,000 | 54,000 | |||
1,86,900 | 1,86,900 |
Partners’ Capital Accounts
Particulars | Sita ram (₹) | Ganga ram (₹) | Raja ram (₹) | Particulars | Sita ram (₹) | Ganga ram (₹) | Raja ram (₹) |
To Realistion A/c – Loss | 24,000 | 12,000 | 18,000 | By Balance b/d | 65,000 | 45,000 | 7,000 |
To Rajaram's Capital A/ | 1,400 | 700 | By reserve Fund A/c | 8,000 | 4,000 | 6,000 | |
To Bank A/c | 50,000 | 37,500 | By Profit and Loss A/c | 2,400 | 1,200 | 1,800 | |
By Bank A/c (Amount recovered) | 1,100 | ||||||
By Sitaram’s Capital A/c | 1,400 | ||||||
By Gangaram’s Capital A/c | 700 | ||||||
75,400 | 50,200 | 18,000 | 75,400 | 50,200 | 18,000 |
Bank Account
Particulars | Amount (₹) | Particulars | Amount (₹) |
To Balance b/d | 2,000 | By Realisation A/c – Liabilities | 27,400 |
To Cash A/c | 5,500 | By Sitaram’s Capital A/c | 50,000 |
To Realisation A/c – Assets | 1,06,300 | By Gangaram’s Capital A/c | 37,500 |
To Rajarams’ Capital A/c | 1,100 | ||
1,14,900 | 1,14,900 |
Working Notes :
(1) ₹ 1,100 is recovered from Rajaram's estate which is recorded in credit side of Rajaram's Capital Account and on debit side of Bank A/c.
(2) Capital deficiency of Rajaram = Debit total of Capital A/c – Credit total of Capital A/c
= 18,000 – 15,900 = ₹ 2,100
Deficit amount of Rajaram A/c ₹ 2,100 is distributed among continuing partners’ in 2: 1 ratio.
