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Question 20 of 33
Q.

Hema, Manisha and Limsy were in partnership firm sharing profits and losses in the ratio of 5:3:2. They decided to dissolve their partnership firm on 31

st

March 2019 and their Balance sheet as on that date stood as:

Balance sheet as on 31st March,2019
LiabilitiesAmount ₹AssetsAmount ₹
Capital Account:Machinery1,00,000
Hema1,50,000Debtors50,000
Manisha80,000Stock70,000
Reserve Fund10,000Cash at Bank30,000
Sundry Creditors20,000Limsy Capital A/c20,000
Bills payable10,000
2,70,0002,70,000
The firm was dissolved on 31
st
March, 2019 and assets were realised as under:
Machinery realised 60% of its book value.
Out of debtors, Mr. Jagdish, our customer for ₹ 20,000 was declared insolvent and nothing could be recovered from him. Other debtors are good and recovered and realised.
Hema took stock at an agreed value of ₹ 50,000.
Creditors and Bills payable were paid at 10% discount.
Limsy became insolvent and nothing was recovered from her estate.
Prepare:
Realisation Account
Partners’ Capital Account
Bank Account
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2023Subjective· 10mImportance★★★★★
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Transfer assets to the Realisation A/c at book value; machinery realises 60% (₹60,000), good debtors ₹30,000 (Jagdish ₹20,000 bad), Hema takes stock at ₹50,000, and creditors + bills payable are paid at 10% discount. Realisation shows a loss of ₹77,000 (5:3:2). Reserve Fund ₹10,000 is shared 5:3:2. Limsy's account shows a debit deficiency of ₹33,400 which, as she is insolvent, is borne by Hema and Manisha in 5:3. Hema is paid ₹45,625 and Manisha ₹47,375; the Bank Account balances at ₹1,20,000.

Working Note 1 — realisation of assets and settlement of liabilities

ItemBook value ₹Realised / settled ₹
Machinery (60% of 1,00,000)1,00,00060,000 (cash)
Debtors (Jagdish 20,000 bad; balance 30,000 good)50,00030,000 (cash)
Stock (taken over by Hema)70,00050,000 (to Hema's Capital)
Sundry Creditors (less 10% discount)20,00018,000 (cash paid)
Bills Payable (less 10% discount)10,0009,000 (cash paid)

Realisation Account

Dr — Particulars₹Cr — Particulars₹
To Machinery A/c1,00,000By Sundry Creditors A/c20,000
To Debtors A/c50,000By Bills Payable A/c10,000
To Stock A/c70,000By Bank A/c (Machinery)60,000
To Bank A/c (Creditors paid)18,000By Bank A/c (Debtors)30,000
To Bank A/c (Bills Payable paid)9,000By Hema's Capital A/c (Stock)50,000
By Loss transferred to Capital A/cs:
  Hema 38,500
  Manisha 23,100
  Limsy 15,40077,000
Total2,47,000Total2,47,000

Loss on realisation ₹77,000, shared 5:3:2 → Hema ₹38,500, Manisha ₹23,100, Limsy ₹15,400.

Working Note 2 — Reserve Fund ₹10,000 shared 5:3:2 → Hema ₹5,000, Manisha ₹3,000, Limsy ₹2,000.

Partners' Capital Account

ParticularsHema ₹Manisha ₹Limsy ₹ParticularsHema ₹Manisha ₹Limsy ₹
To Balance b/d——20,000By Balance b/d1,50,00080,000—
To Realisation A/c (loss)38,50023,10015,400By Reserve Fund5,0003,0002,000
To Realisation A/c (Stock)50,000——By Hema's & Manisha's Capital (deficiency)——33,400

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