question_answer
Adil and Muneer, who were sharing Profits and losses in the ratio of 3 : 1 respectively, decided to dissolve the firm on 31st March, 2017. At that date, some of their balance are given below: | Adil?s Capital | Rs. 50,000 |
| Muneer?s Capital | Rs. 5,000 (Debit balance) |
| Profit and Loss Account | Rs. 4,000 (Debit balance) |
| Trade Creditors | Rs. 15,000 |
| Loan from Mrs. Adil | Rs. 5,000 |
| Cash at Bank | Rs. 1,000 |
The assets (other than cash at bank) realised Rs. 55,000 and all creditors including loan from Mrs. Adil were paid off less 5% discount. Realisation expenses amounted to Rs. 500. Prepare the realization account, bank account and the capital account of the partners assuming that both the partners are solvent.
Answer:
Dr Realisation Account Cr | Particulars | Amt (Rs.) | Particulars | | Amt (Rs.) |
| To Sundry Assets A/c | 60,000 | By Sundry Liabilities A/c | | 14,250 |
| To Bank A/c (Trade creditors) | 14,250 | Trade Creditors | 15,000 | |
| To Bank A/c (Loan from Mrs. Adil) | 4,750 | Loan from Mrs. Adil | 5,000 | 20,000 |
| To Bank A/c (Expenses) | 5,00 | By Bank A/c | | 55,000 |
| | | (sundry Assets realized) | | |
| | | By Loss on Realisation Transferred to | | |
| | | Adil?s Capital A/c | 3,375 | |
| | | Muneer?s Capital A/c | 1,125 | 4,500 |
| | 79,500 | | | 79,500 |
Dr Partners? Capital Account Cr | Particulars | Adil (Rs.) | Muneer (Rs.) | Particulars | Adil (Rs.) | Muneer (Rs.) |
| To Balance b/d | - | 5,000 | By Balance b/d | 50,000 | - |
| To Profit and Loss A/c (Loss) | 3,000 | 1,000 | By Bank A/c (Cash brought in) | - | 7,125 |
| To Realisation A/c (Loss) | 3,375 | 1,125 | | | |
| To bank A/c (Final payment) | 43,625 | - | | | |
| | 50,000 | 7,125 | | 50,000 | 7,125 |
Dr Bank Account Cr | Particulars | Amt (Rs.) | Particulars | Amt (Rs.) |
| To Balance b/d | 1,000 | By Realisation A/c (Trade creditors) | 14,250 |
| To Realisation A/c (Assets realisation) | 55,000 | By Realisation A/c (Loan from Mrs. Adil) | 4,750 |
| To Muneer?s Capital A/c (Cash brought in) | 7,125 | By Realisation A/c (Expenses) | 500 |
| | | By Adil?s Capital A/c (Final Payment) | 43,625 |
| | 63,125 | | 63,125 |
Working Note Calculation of sundry assets (except cash at bank) as at 31st March, 2017. Memorandum Balance Sheet as at 31st March, 2017 | Liabilities | Amt (Rs.) | Assets | Amt (Rs.) |
| Trade Creditors | 15,000 | Cash at Bank | 1,000 |
| Loan from Mrs. Adil | 5,000 | Muneer?s Capital | 5,000 |
| Adil?s Capital | 50,000 | Profit and Loss A/c | 4,000 |
| | | Other Sundry Assets (Balancing Figure) | 60,000 |
| | 70,000 | | 70,000 |
