Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows ?-Solution

Q.11. Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows:    

Balance Sheet of Rose and Lily as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)	Amount (Rs.)
Creditors	40,000	Cash		16,000
Lily’s loan	32,000	Debtors	80,000
Profit and loss	50,000	Less:Provision for doubtful debts	3,600	76,400
Capitals:		Inventory		109,600
Lily	160,000	Bills Receivable		40,000
Rose	240,000	Buildings		280,000
	5,22,000			5,22,000

Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised Rs 4,84,000.  Creditors agreed to take Rs 38,000. Cost of Realisation was Rs 2,400. There was a Motor Cycle in the firm which was bought out of the firm’s money, was not shown in the books of the firm. It was now sold for Rs 10,000. There was a contingent liability in respect of outstanding electric bill of Rs 5,000, Bill Receivable taken over by Rose at Rs 33,000.

Show Realisation Account, Partners Capital Account, Loan Account and Cash Account.

SOLUTION

Books Rose and Lily

Realisation A/c

Particulars		Amount (Rs.)	Particulars		Amount (Rs.)
To Debtors		80,000	By Provision for Doubtful Debts		3,600
To Inventory		109,600	By Creditors		40,000
To Bills Receivables		40,000	By Cash:
To Buildings		280,000	Other Assets	10,000
			Motor cycle	4,84,000	4,94,000
To Cash:			By Rose’s Capital (Bills Receivable)		33,000
Expenses	2,400
Creditors	38,000
Outstanding Electricity Bill	5,000	45,400
To Profit transferred to:
Rose’ Capital	6,240
Lily’s Capital	9,360	15,600
		5,70,600			5,70,600

                             Partner’s Capital Accounts

Particulars	Rose	Lily	Particulars	Rose	Lily
To Realisation  (Bills Receivable)	33,000		By Balance b/d	2,40,000	1,60,000
To Cash A/c	2,33,240	1,99,360	By Profit and Loss A/c	20,000	30,000
			By Realisation  A/c	6,240	9,360
	2,66,240	1,99,360		266,240	199,360

Lily’s Loan Account

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Cash	32,000	By Balance b/d	32,000
	32,000		32,000

 Cash Account

Particulars		Amount (Rs.)	Particulars		Amount (Rs.)
To Balance b/d		16,000	By Realisation A/c:
To Realisation A/c:			Creditors	38,000
Motor Cycle	10,000		Outstanding Electricity Bill	5,000
Other Assets	4,84,000	4,94,000	Expenses	2,400	45,400
			By Lily’s Loan		32,000
			By Rose’s Capital A/c		2,33,240
			By Lily’s Capital A/c		1,99,360
		5,10,000			5,10,000

9 10 11 12 13 14