12th | Dissolution of a Partnership Firm | Question No. 41 To 43 | Ts Grewal Solution 2022-2023

Question 41:

The partnership between A and B was dissolved on 31st March, 2022. On that date the respective credits to the capitals were A − ` 1,70,000 and B − ` 30,000. ` 20,000 were owed by B to the firm; ` 1,00,000 were owed by the firm to A and ` 2,00,000 were due to the Trade Creditors . Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B.
The assets represented by the above stated net liabilities realise ` 4,50,000 exclusive of ` 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners' Capital Accounts and Cash Account showing the distribution to the partners.

Answer:

Realisation Account

Dr.

Cr.

Particulars

( `)

Particulars

( `)

Sundry Assets (WN)

4,80,000

Trade Creditors

2,00,000

B’s Loan

20,000

Cash (Assets realised)

4,50,000

Cash A/c (Creditors )

2,00,000

B’s Capital A/c (B’s Loan)

20,000

Loss transferred to:

A’s Capital A/c

20,000

B’s Capital A/c

10,000

30,000

7,00,000

Partners Capital Accounts

Dr.

Cr.

Particulars

Realisation A/c

–

20,000

Balance b/d

1,70,000

30,000

Realisation A/c (Loss)

20,000

10,000

Cash A/c

1,50,000

1,70,000

30,000

1,70,000

30,000

Cash Account
Dr.			Cr.
Particulars	( `)	Particulars	( `)
Realisation A/c (Assets)	4,50,000	Realisation A/c (Creditors )	2,00,000
		A’s Capital A/c	1,50,000
		A’s Loan A/c	1,00,000

	4,50,000		4,50,000

Working Notes:

Memorandum Balance Sheet as at 31st March, 2022
Liabilities		( `)	Assets	( `)
Capital A/cs:			B’s Loan	20,000
A	1,70,000
B	30,000	2,00,000	Sundry Assets	4,80,000
A’s Loan		1,00,000	(Balancing figure)
Trade Creditors		2,00,000

		5,00,000		5,00,000

Question 42:

X and Y were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve the firm on 31st March, 2022. On that date, their Capitals were X − `40,000 and Y − ` 30,000. Creditors amounted to ` 24,000.
Assets were realised for `88,500. Creditors of `16,000 were taken over by X at `14,000. Remaining Creditors were paid at ` 7,500. The cost of realisation came to `500.
Prepare necessary accounts.

Answer:

Realisation Account

Dr.

Cr.

Particulars

( `)

Particulars

( `)

Sundry Assets

94,000

Creditors

24,000

X’s Capital A/c (Creditors )

14,000

Cash (Assets Realised)

88,500

Cash A/c:

Loss transferred to:

Creditors

7,500

X’s Capital A/c

2,100

Expenses

500

8,000

Y’s Capital A/c

1,400

3,500

1,16,000

Partners Capital Accounts

Dr.

Cr.

Particulars

Realisation A/c (Loss)

2,100

1,400

Balance b/d

40,000

30,000

Cash A/c

51,900

28,600

Realisation A/c
(Creditors )

14,000

–

54,000

30,000

54,000

30,000

Cash Account
Dr.				Cr.
Particulars	( `)	Particulars	( `)
Realisation A/c (Assets)	88,500	Realisation A/c	8,000
		X’s Capital A/c	51,900
		Y’s Capital A/c	28,600
	88,500		88,500

Working Notes

Memorandum Balance Sheet as on March 31, 2022
Liabilities		( `)	Assets	( `)
Capital A/cs:			Sundry Assets	94,000
X	40,000		(Balancing figure)
Y	30,000	70,000
Creditors		24,000

		94,000		94,000

Question 43:

P, Q and R are partners sharing profits and losses in the ratio of 3 : 3 : 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2021, the total capital of the firm and the balance of General Reserve are ` 80,000 and ` 20,000 respectively. During the year 2021-22, the firm made a profit of ` 28,000 before charging interest on capital @ 5%. The drawings of the partners are P — ` 8,000; Q — ` 7,000; and R — ` 5,000. On 31st March, 2022, their liabilities were `18,000.
On this date, they decided to dissolve the firm. The assets realised `1,08,600 and realisation expenses amounted to ` 1,800.
Prepare necessary Ledger Accounts to close the books of the firm.

Answer:

Dr.	Realistationn Account							Cr.
Particulars			( `)		Particulars			( `)
Sundry Assets (WN 1)			1,26,000		Creditors			18,000
					Cash A/c (Assets Realised)			1,08,600
Cash A/c:					Loss transferred to:
Creditors		18,000			P’s Capital A/c		7,200
Expenses		1,800	19,800		Q’s Capital A/c		7,200
					R’s Capital A/c		4,800	19,200

			1,45,800					1,45,800


Partners Capital Accounts
Dr.											Cr.
Particulars				P	Q	R	Particulars		P	Q	R
Drawings A/c				8,000	7,000	5,000	Balance b/d		30,000	30,000	20,000
Realisation A/c (Loss)				7,200	7,200	4,800	Interest on Capital A/c		1,500	1,500	1,000
Cash A/c				32,800	33,800	22,200	P/L Appropriation A/c (WN 3)		9,000	9,000	6,000
							General Reserve		7,500	7,500	5,000
				48,000	48,000	32,000			48,000	48,000	32,000

Cash Account
Dr.				Cr.
Particulars	( `)	Particulars	( `)
Realisation A/c	1,08,600	Realisation A/c	19,800
		P’s Capital A/c	32,800
		Q’s Capital A/c	33,800
		R’s Capital A/c	22,200

	1,08,600		1,08,600

Working Note:

WN 1

Memorandum Balance Sheet as on 31st March, 2022
Liabilities		( `)	Assets	( `)
Capital A/cs:			Sundry Assets	1,26,000
P (WN 2)	22,000		(Balancing figure)
Q (WN 2)	23,000
R (WN 2)	15,000	60,000
General Reserve		20,000
Profit and Loss A/c		28,000
Creditors		18,000
		1,26,000		1,26,000

WN 2

Computation of Partners' Capital after drawings as on 31st March, 2022
Dr.								Cr.
Particulars	P	Q	R	Particulars	P	Q	R
Drawings A/c	8,000	7,000	5,000	Balance b/d	30,000	30,000	20,000
Adjusted Capital	22,000	23,000	15,000
	30,000	30,000	20,000		30,000	30,000	20,000

WN 3

Profit and Loss Appropriation Account
Dr.	for the year ending 31st March, 2022					Cr.
Particulars			( `)	Particulars	( `)
Interest on Capital A/cs:				Profit and Loss A/c	28,000
P’s Capital A/c		1,500
Q’s Capital A/c		1,500
R’s Capital A/c		1,000	4,000
Profit transferred to:
P’s Capital A/c		9,000
Q’s Capital A/c		9,000
R’s Capital A/c		6,000	24,000

			28,000		28,000