Mohan and Punith are partners sharing profits as 3:1. Their Balance Sheet as on 31st March 2021 was as under :
Balance Sheet as on 31.03.2021
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Loan | 3,000 | Cash at bank | 6,000 |
| Creditors | 3,000 | Stock | 10,000 |
| Reserve Fund | 8,000 | Furniture | 4,000 |
| Capital account : | Debtors | 20,000 | |
| Mohan 40,000 | Plant and Machinery | 22,000 | |
| Punith 20,000 | 60,000 | Profit and Loss account | 12,000 |
| 74,000 | 74,000 |
On the above date they decided to dissolve the firm :
Additional Information :
a) Mohan took over plant and machinery at an agreed value of ₹ 25,000
b) Stock and furniture were realised for ₹ 9,000 and ₹ 3,500 respectively
c) Debtors took over by Punith at ₹ 18,000
d) Liabilities were paid in full by the firm
e) Realisation expenses were ₹ 500
Prepare :
i) Realisation Account
ii) Partners Capital Accounts
iii) Bank Account.
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Start your 14-day free trial to unlock the full solution →Realisation A/c loss ₹1,000 (3:1). Reserve fund ₹8,000 credited (3:1); P&L Dr. balance ₹12,000 debited (3:1). Mohan takes machinery ₹25,000, Punith takes debtors ₹18,000; final cash paid Mohan ₹11,250, Punith ₹750; Bank A/c = ₹18,500.
i) Realisation Account
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Stock A/c | 10,000 | By Loan A/c | 3,000 |
| To Furniture A/c | 4,000 | By Creditors A/c | 3,000 |
| To Debtors A/c | 20,000 | By Mohan's Capital (P&M taken over) | 25,000 |
| To Plant & Machinery A/c | 22,000 | By Punith's Capital (Debtors taken over) | 18,000 |
| To Bank A/c (Loan paid) | 3,000 | By Bank A/c (Stock realised) | 9,000 |
| To Bank A/c (Creditors paid) | 3,000 | By Bank A/c (Furniture realised) | 3,500 |
| To Bank A/c (Realisation expenses) | 500 | By Loss: Mohan 750; Punith 250 | 1,000 |
| 62,500 | 62,500 |
ii) Partners' Capital Accounts
| Particulars | Mohan | Punith | Particulars | Mohan | Punith |
|---|---|---|---|---|---|
| To Profit & Loss A/c (3:1) | 9,000 | 3,000 | By Balance b/d | 40,000 | 20,000 |
| To Realisation A/c (P&M / Debtors) | 25,000 | 18,000 | By Reserve Fund (3:1) | 6,000 | 2,000 |
| To Realisation A/c (loss 3:1) | 750 | 250 | |||
| To Bank A/c (final payment) | 11,250 | 750 | |||
| 46,000 | 22,000 | 46,000 | 22,000 | ||
| … |
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