question_answer
The balance sheet of AK, BK and CK sharing profits in the ratio of 3 : 4 : 2 stood as follows on the date of dissolution. Balance Sheet as at... | Liabilities | Amt (Rs.) | Assets | Amt (Rs.) |
| Creditors | 48,000 | Machinery | 90,000 |
| Workmen's Compensation Reserve | 54,000 | Computer | 9,600 |
| Investment Fluctuation Reserve | 6,000 | Furniture | 60,000 |
| Mrs AK's Loan | 30,000 | Investments | 72,000 |
| Mrs BK's Loan | 24,000 | Stock-in-trade | 1,44,000 |
| AK's Capital A/c | 2,40,000 | CK?s Capital A/c | 24,000 |
| BK's Capital A/c | 1,44,000 | Profit and Loss A/c | 1,08,000 |
| | | Cash | 12,000 |
| | | Bank | 26,400 |
| | 5,46,000 | | 5,46,000 |
The following information is given to you: | (i) AK promised to pay Mrs. AK's loan and took stock-in-trade at Rs. 1,20,000. |
| (ii) BK took half of the investments at Rs. 42,000 and remaining investments were realised at 120%. |
| (iii) CK took over machinery at Rs. 60,000 for cash. |
| (iv) Rs. 72,000 had to be paid for workmen's compensation. |
| (v) Creditors amounting to Rs. 9,600 were given furniture of the book value of Rs. 24,000 in full settlement. Remaining creditors were paid at a discount of 10%. |
| (vi) Remaining furniture was sold at 30% of the book value. |
| (vii) AK was allowed a remuneration of Rs. 12,000 to carry out dissolution work and he agreed to bear all expenses of realisation which amounted to Rs. 18,000 and were paid by him. Prepare necessary accounts. |
Answer:
Dr Realisation Account Cr | Particulars | | Amt (Rs.) | Particulars | | Amt (Rs.) |
| To Machinery | | 90,000 | By Creditors | | 48,000 |
| To Computer | | 9,600 | By Workmen Compensation | | |
| To Furniture | | 60,000 | Reserve | | 54,000 |
| To Investments | | 72,000 | By Investment Fluctuation | | |
| To Stock-in-Trade | | 1,44,000 | Reserve | | 6,000 |
| To AK's Capital A/c (Mrs. A's Loan) | | 30,000 | By Mrs AK.s Loan | | 30,000 |
| | | | By Mrs BK's Loan | | 24,000 |
| To Bank | | | By AK's Capital A/c (Stock) | | 1,20,000 |
| Workmen's Compensation | 72,000 | | By BK's Capital A/c | | 42,000 |
| Creditors | 34,560 | | (Investment) | | |
| Mrs BK's Loan | 24,000 | 1,30,560 | By Bank | | |
| To AK's Capital A/c (Remuneration) | | 12,000 | Investments | 43,200 | |
| | | | Machinery | 60,000 | |
| | | | Furniture | 10,800 | 1,14,000 |
| | | | By Loss Transferred to Capital A/c | | |
| | | | AK | 36,720 | |
| | | | BK | 48,960 | |
| | | | CK | 24,480 | 1,10,160 |
| | | 5,48,160 | | | 5,48,160 |
Dr Partners' Capital Account Cr | Particular | AK (Rs.) | BK (Rs.) | CK (Rs.) | Particular | AK (Rs.) | BK (Rs.) | CK (Rs.) |
| To Balance b/d | - | - | 24,000 | By Balance b/d | 2,40,000 | 1,44,000 | - |
| To Profit and Loss A/c | 36,000 | 48,000 | 24,000 | By Realisation (Mrs A?s Loan) | 30,000 | - | - |
| To Realisation (Stock) | 1,20,000 | - | - | By Realisation (Remuneration) | 12,000 | - | - |
| To Realisation (Investment) | - | 42,000 | - | By Bank A/c | - | - | 72,480 |
| To Realisation Loss | 36,720 | 48,960 | 24,480 | | | | |
| To Bank A/c | 89,280 | 5,040 | - | | | | |
| | 2,82,000 | 1,44,000 | 72,480 | | 2,82,000 | 1,44,000 | 72,480 |
Dr Bank Account Cr | Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
| To Balance b/d | 26,400 | By Realisation A/c | 1,30,560 |
| To Cash A/c | 12,000 | By A?s Capital A/c | 89,280 |
| To Realisation A/c | 1,14,000 | By B?s Capital A/c | 5,040 |
| To C's Capital A/c | 72,480 | | |
| | 2,24,880 | | 2,24,880 |
Note It is assumed that computer has not realised any amount.
