Sridevi and Sripriya are partners sharing profits and losses equally. Their balance sheet as on 31/03/2024 was as follows.
Balance Sheet as on 31-03-2024
| LIABILITIES | ₹ | ASSETS | ₹ |
|---|---|---|---|
| Creditors | 50,000 | Cash at bank | 18,000 |
| Bills payable | 30,000 | Bills Receivables | 20,000 |
| Reserve fund | 10,000 | Stock | 30,000 |
| Capitals: | Debtors | 40,000 | |
| Sridevi – 75,000 | Building | 50,000 | |
| Sripriya – 60,000 | Motor car | 27,000 | |
| 1,35,000 | Furniture | 40,000 | |
| 2,25,000 | 2,25,000 |
On the above date, they decided to dissolve the firm.
Additional information:
a) Assets realised as follows :
Stock – ₹ 30,400, Bills Receivables – ₹ 19,000, Furniture – ₹ 35,000, Debtors – ₹ 42,600 (with interest)
b) Sridevi took over Buildings at ₹ 60,000 and Sripriya agreed to take over motor car at ₹ 26,600.
c) All liabilities were paid in full by the firm.
d) Realisation expenses were ₹ 5,000.
Prepare:
i) Realisation Account
ii) Partner's Capital Accounts and
iii) Bank Account
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Start your 14-day free trial to unlock the full solution →Profit on realisation ₹1,600 (equally); Sridevi paid ₹20,800, Sripriya paid ₹39,200; Bank A/c totals ₹1,45,000.
Sridevi and Sripriya share equally. Cash at bank ₹18,000 is opening balance (not transferred to Realisation A/c).
i) Realisation Account:
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Bills Receivable | 20,000 | By Creditors | 50,000 |
| To Stock | 30,000 | By Bills Payable | 30,000 |
| To Debtors | 40,000 | By Bank (assets realised): | |
| To Building | 50,000 | Stock 30,400 | |
| To Motor Car | 27,000 | Bills Receivable 19,000 | |
| To Furniture | 40,000 | Furniture 35,000 | |
| To Bank (Creditors paid) | 50,000 | Debtors 42,600 | 1,27,000 |
| To Bank (Bills Payable paid) | 30,000 | By Sridevi's Capital (Building) | 60,000 |
| To Bank (Realisation expenses) | 5,000 | By Sripriya's Capital (Motor Car) | 26,600 |
| To Profit to Capitals: | |||
| Sridevi 800 | |||
| Sripriya 800 | 1,600 | ||
| Total | 2,93,600 | Total | 2,93,600 |
Profit on realisation = 2,93,600 − 2,92,000 = ₹1,600, shared equally ₹800 each. Totals ₹2,93,600 = ₹2,93,600 ✓.
Reserve Fund ₹10,000 distributed equally = ₹5,000 each.
ii) Partners' Capital Accounts:
| Particulars | Sridevi ₹ | Sripriya ₹ | Particulars | Sridevi ₹ | Sripriya ₹ |
|---|---|---|---|---|---|
| To Realisation A/c (asset taken over) | 60,000 | 26,600 | By Balance b/d | 75,000 | 60,000 |
| To Bank A/c (final payment) | 20,800 | 39,200 | By Reserve Fund | 5,000 | 5,000 |
| By Realisation A/c (profit) | 800 | 800 | |||
| Total | 80,800 | 65,800 | Total | 80,800 | 65,800 |
| … |
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