[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)
Practical problem | Q 12 | Page 250
Shashwat and Shiv are equal partners. Their Balance Sheet stood as under :
Balance Sheets as on 31st March 2019.
Liabilities | ₹ | Assets | ₹ |
Shaswat’s Capital A/c | 6,000 | Plant and Machinery | 14,750 |
Creditors | 39,000 | Furniture | 4,000 |
Debtors | 5,000 | ||
Stock | 6,250 | ||
Cash at Bank | 3,000 | ||
Shiv’s Capital | 12,000 | ||
45,000 | 45,000 |
Due to weak financial position, all partners were declared bankrupt
The Assets were realised as follows :
Stock ₹3,500, Furniture ₹ 2,000, Debtors ₹ 5,000 and Machinery ₹ 7,000 The cost of collection and distributing the estate amounted to ₹ 1,500. Shashwat’s private estate in not sufficient even to pay his private debts, whereas in Shiv’s private estate there is a surplus of ₹ 500.
Prepare necessary ledger accounts to close the books of the firm.
SOLUTION: In the books of Shashwat and Shiv
Realisation Account
Particulars | ₹ | ₹ | Particulars | ₹ | ₹ |
To Sundry Assets A/c | By Bank A/c | ||||
Plant and Machinery | 14,750 | Stock | 3,500 | ||
Furniture | 4,000 | Furniture | 2,000 | ||
Debtors | 5,000 | Debtors | 5,000 | ||
Stock | 6,250 | 30,000 | Machinery | 5,000 | 17,500 |
To Bank A/c | 1,500 | By Partners’ Capital A/c (Loss on realisation transferred) | |||
Realisation Exp. | Shashwat | 7,000 | |||
Shiv | 7,000 | 14000 | |||
31,500 | 31,500 |
Partners’ Capital Accounts
Particulars | Shashwat (₹) | Shiv (₹) | Particulars | Shashwat (₹) | Shiv (₹) |
To Balance b/d | 12,000 | By Balance b/d | 6000 | ||
To realisation A/c – Loss | 7,000 | 7,000 | By Bank A/c | 500 | |
By Deficiency A/c | 1000 | 18,500 | |||
7,000 | 19,000 | 7000 | 19,000 |
Creditors Account
Particulars | ₹ | Particulars | ₹ |
To Deficiency A/c | 19,500 | By Balance b/d | 39,000 |
To Bank A/c | 19,500 | ||
39,000 | 39,000 |
Deficiency Account
Particulars | ₹ | Particulars | ₹ |
To Shashwat’s Capital A/c | 1000 | By Creditors A/c | 19,500 |
To Shiv’s Capital A/c | 18,500 | ||
19,500 | 19,500 |
Bank Account
Particulars | ₹ | Particulars | ₹ |
To Balance b/d | 3,000 | By realisation Expense A/c | 1,500 |
To Shiv’s Capital A/c | 500 | By Creditors A/c | 19,500 |
To realisation A/c (Assets) | 17,500 | ||
21,000 | 21,000 |
Working Note:
As partners were not able to pay their loss amount, difference of amount is considered as deficiency of partners.
