Ganesh and Kartik are partners sharing Profits and Losses equally. They decided to dissolve the firm on 31st March 2018. Their Balance Sheets - Book Keeping and Accountancy
[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)
Practical problem | Q 1 | Page 244
Ganesh and Kartik are partners sharing Profits and Losses equally. They decided to dissolve the firm on 31st March 2018. Their Balance Sheets was as under :
Balance Sheets as on 31st March 2018.
Liabilities | Amount ₹ | Assets | Amount ₹ |
Creditors | 18,400 | Building | 88,000 |
Bills Payable | 5,600 | Furniture | 12,000 |
Reserve Fund | 20,000 | Debtors | 32,000 |
Capital A/c : | Stock | 24,000 | |
Ganesh | 40,000 | Bills Receivable | 4,000 |
Kartik | 80,000 | Cash | 4,000 |
1,64,000 | 1,64,000 |
Assets were realised as under :
Building ₹82,000, Debtors ₹ 22,000, Stock ₹ 20,000. Bills Receivable ₹ 3,200 and Ganesh agreed to take over Furniture for ₹10,000. Realisation Expenses amounted to ₹ 2,000.
Show Realisation A/c, Partners’ Capital A/c and Cash A/c.
SOLUTION:
In the books of Ganesh and Kartik
Realisation Account
Dr | Cr | ||||
Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
To Sundry Assets A/c | By Sundry Liabilities A/c | ||||
Building | 88,000 | Creditors | 18,400 | ||
Furniture | 12,000 | Bills Payable | 5,600 | 24,000 | |
Debtors | 32,000 | By cash A/c | |||
Stock | 24,000 | Building | 82,000 | ||
Bills receivable | 4,000 | 1,60,000 | Debtors | 22,000 | |
To Cash A/c | Stock | 20,000 | |||
Creditors | 18,400 | Bills receivable | 3,200 | 1,27,200 | |
Bills Payable | 5,600 | By Ganesh’s Capital A/c | |||
realisation Expense | 2,000 | 26,000 | Furniture | 10,000 | |
By Partners’ Capital A/c (Loss on realisation transferred) | |||||
Ganesh | 12,400 | ||||
Kartik | 12,400 | 24,800 | |||
1,86,000 | 1,86,000 |
Partners’ Capital Accounts
Particulars | Ganesh (₹) | Kartik (₹) | Particulars | Ganesh (₹) | Kartik |
To realisation A/c | 10,000 | By Balance b/d | 40,000 | 80,000 | |
To realisation A/c | 12,400 | 12,400 | By reserve Fund A/c | 10,000 | 10,000 |
To Cash A/c | 27,600 | 77,600 | |||
50,000 | 90,000 | 50,000 | 90,000 |
Cash Account
Particulars | Amount (₹) | Particulars | Amount (₹) |
To Balance b/d | 4,000 | By realisation A/c (Liabilities) | 26,000 |
To realisation A/c (Assets) | 1,27,200 | By Ganesh’s Capital A/c | 27,600 |
By Kartik’s Capital A/c | 77,600 | ||
1,31,200 | 1,31,200 |
Working Notes :
(1) Amount paid to Ganesh and Kartik are ₹ 27,600 and ₹ 77,600 respectively.
(2) Loss on realisation and reserve fund amounts are equally distributed.
(3) Furniture is taken over by Ganesh so his Capital A/c is debited.