Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was

16. Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was:


Balance Sheet of Ashu and Harish 
as on December 31, 2017

Liabilities
Amount
 (Rs.)
Amount
 (Rs.)
Assets
Amount
(Rs.)
Capitals: Building80,000
  Ashu 1,08,000Machinary70,000
  Harish    54,0001,62,000Furniture14,000
Creditors 88,000Stock20,000
Bank overdraft 50,000Investments60,000
   Debtors48,000
   Cash in hand8,000
  300,000 300,000

Ashu is to take over the building at Rs 95,000 and Machinery and Furniture is take over by Harish at value of Rs 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs 46,000, expenses of Realisation amounted to Rs 3,000. Prepare necessary ledger Account.

SOLUTION

Books of Ashu and Harish

Realisation A/c

Particulars
Amount
(Rs)
Particulars
Amount
(Rs)
Building80,000Creditors88,000
Machinery70,000Bank overdraft50,000
Furniture14,000Bank:
stock20,000  Ashu’s capital A/c(Building)95,000
Investment60,000  Ashu’s capital A/c(Stock)12,000
Debtors48,000  Ashu’s capital A/c(Investment)36,0001,43,000
Ashu’s capital A/c(Creditors)88,000  Harish’s Capital A/c(Machinery and Furniture)80,000
Harish’s Capital A/c(Bank overdraft)50,000  Harish’s Capital A/c(Stock)8,000
Cash (Realisation expense)3,000Harish’s Capital A/c(Investment)24,0001,12,000
Profit transfered to:Cash (Debtors)46,000
  Ashu’s capital A/c3,600
  Harish’s Capital A/c2,4006,000
4,39,0004,39,000

Partner’s Capital A/c

ParticularsAnsuHarishParticularsAnsuHarish
Realisation (Asset)1,43,0001,12,000Balance b/d1,08,00054,000
Cash56,600Realisation A/c (Profit)3,6002,400
Realisation A/c (Liabilities)88,00050,000
Cash5,600
1,99,6001,12,0001,99,6001,12,000

Cash A/c

Particulars
Amount
(Rs)
Particulars
Amount
(Rs)
By balance b/d8,000Anus’s Capital A/c56,600
Realisation Debtors46,000Realisation (Expenses)3,000
Harish’s Capital A/c5,600
59,60059,600

Chapter-5 Dissolution of a Partnership Firm

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