Seeta and Geeta are partners in the firm sharing Profits and Losses in the ratio of 4:1. They decided to dissolve the partnership on 31st March 2020 on - Book Keeping and Accountancy

[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)


Practical problem | Q 5 | Page 246

Seeta and Geeta are partners in the firm sharing Profits and Losses in the ratio of 4:1. They decided to dissolve the partnership on 31st March 2020 on which date their Balance Sheet stood as follows.

Balance Sheets as on 31st March 2020

Liabilities

Amount ₹

Assets

Amount ₹


Capital


Furniture

14,000


Seeta

90,000

Plant

65,000


Geeta

40,000

Trademark

8,000


Sundry Creditors

35,000

Sundry Debtors

48,000


Bank Loan

15,000

Less - R. D. D

3,000

45,000



Stock

30,000




Cash in hand

10,000




Advertisement Suspense

8,000



1,80,000


1,80,000


 

Additional Information :

1. Plant and Stock taken over by Seeta  78,000, and  22,000 respectively

2. Debtors Realised 90% of the Book Value and Trademark at  5,000. and Goodwill was realised for  27,000.

3. Unrecorded assets estimated 4,500 was sold for 1,500.

4.  1,000 Discount were allowed by creditors while paying their claim.

5. The Realisation Expenses amounted to  3,500

You are required to prepare Realisation A/c, Cash A/c, and Partners Capital A/c

SOLUTION: In the books of Seeta and Geeta

Realisation Account

Particulars

Amount (₹)

Amount (₹)

Particulars

Amount (₹)

Amount (₹)

To Sundry Assets A/c



By Sundry Liabilities A/c



Furniture

14,000


Bank Loan

15,000


Plant

65,000


Sundry Creditors

35,000

50,000

Trademark

8,000


By R.D.D. A/c

(Transfer)


3000

Sundry Debtors

48,000


By Seeta’s Capital A/c



Stock

30,000

1,65,000

Plant

78,000


To Cash A/c



Stock

22,000

1,00,000

Bank Loan

15,000


By Cash A/c



Sundry Creditors

34,000


Debtors

43,200


Expenses

3,500

52,500

Trademark

5,000


To Partners’ Capital A/c

(Profit)



Goodwill

27,000


Seeta

9,760


Unrecorded Assets

1,500

76,700

Geeta

2,440

12,200






2,29,700



2,29,700

 

Partners’ Capital Accounts

Particulars

Seeta (₹)

Geeta (₹)

Particulars

Seeta (₹)

Geeta (₹)

To Advertisement Suspense A/c
(Deferred Expense/Loss)

6,400

1,600

By Balance b/d

90,000

40,000

To Realisation A/c (Assets taken over)

1,00,000


By realisation A/c (Profit)

9,760

2,440

To Cash A/c
(Final payment)


40,840

By Cash A/c (Amount contributed)

6,640



1,06,400

42,440


1,06,400

42,440


Cash Account

Particulars

Amount (₹)

Particulars

Amount (₹)

To Balance b/d

10,000

By realisation A/c

52,500

To realisation A/c

76,700

By Geeta’s Capital A/c

40,840

To Seeta’s Capital A/c

6,640




93,340


93,340

Working Notes :

(1) Bank Loan is an external liability of the firm and therefore it is transferred to Realisation A/c.

(2) Amount recovered from Debtors = 90 % of Gross Debtors = (90/100) × 48000 =  43200.

(3) Amount paid to creditors = Value of Creditors – Discount given = 35,000 – 1,000 =  34,000.

(4) Sale of unrecorded assets for  1,500 is recorded on the credit side of realisation A/c and debit side of Cash A/c.

(5) It is presumed that Furniture realised nothing.

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