Rita, Geeta and Ashish Were Partners In A Firm Sharing Profits And Losses In the Ratio Of 3:2:1. On March 31, 2017 Their Balance Sheet Was As Follows-Solution

Q.14. Rita, Geeta and Ashish were partners in a firm sharing profits/losses in the ratio of 3:2:1. On March 31, 2017 their balance sheet was as follows:

Liabilities	Amount (Rs.)	Assets	Amount  (Rs.)
Capitals:		Cash	22,500
Rita 80,000		Debtors	52,300
Geeta 50,000		Stock	36,000
Ashish 30,000	1,60,000	Investments	69,000
Creditors	65,000	Plant	91,200
Bills payable	26,000
General reserve	20,000
	2,71,000		2,71,000

On the date of above mentioned date the firm was dissolved:
1. Rita was appointed to realise the assets. Rita was to receive 5% commission on the rate of assets (except cash) and was to bear all expenses of Realisation,
2. Assets were realised as follows:

	Rs
Debtors	30,000
Stock	26,000
Plant	42,750

3. Investments were realised at 85% of the book value,
4. Expenses of Realisation amounted to Rs 4,100,
5. Firm had to pay Rs 7,200 for outstanding salary not provided for earlier,
6. Contingent liability in respect of bills discounted with the bank was also materialised and paid off Rs 9,800,    Prepare Realisation Account, Capital Accounts of Partners’ and Cash Account.

SOLUTION

In the books of Rita, Geeta and Ashish
Realisation Account

Particulars		Amount (Rs.)	Particulars		Amount  (Rs.)
Debtors		52,300	Creditors		65,000
Stock		36,000	Bills Payable		26,000
Investment		69,000	Cash:
Plant		91,000	Debtors	30,000
Cash:			Stock	26,000
Outstanding Salaries	7,200		Plant	42,750
Discounted Bill	9,800		Investment	58,650	1,57,400
Creditors	65,000
Bills Payable	26,000	1,08,000	Loss transferred to :
Rita’s Capital A/c (Commission)		7,870	Rita’s Capital A/c	57,985
			Geeta’s Capital A/c	38,657
			Ashish’s Capital A/c	19,328	1,15,970
		3,64,370			3,64,370

  Partners’ Capital Account

Particulars	Rita	Geeta	Ashish	Particulars	Rita	Geeta	Ashish
Realisation  (Loss)	57,985	38,657	19,328	Balance b/d	80,000	50,000	30,000
Bank	39,885	18,010	14,005	General Reserve	10,000	6,667	3,333
				Realisation	7,870
	97,870	56,667	33,333		97,870	56,667	33,333

Cash Account

Particulars	Amount  (Rs.)	Particulars	Amount (Rs.)
Balance b/d	22,500	Realisation A/c	1,08,000
Realisation	1,57,400	Rita’s Capital	39,885
		Geeta’s Capital A/c	18,010
		Ashish’s Capital A/c	14,005
	1,79,900		1,79,900

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