Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under:
19. Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under:
Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Sundry Creditors | 20,000 | Bank | 7,500 |
| Bills payable | 25,500 | Sundry Debtors | 58,000 |
| Babu’s loan | 30,000 | Stock | 39,500 |
| Capital’s: | Machinery | 48,000 | |
| Ashok 70,000 | Investment | 42,000 | |
| Babu 55,000 | Freehold Property | 50,500 | |
| Chetan 27,000 | 1,52,000 | ||
| Current account: | |||
| Ashok 10,000 | |||
| Babu 5,000 | |||
| Cheaten 3,000 | 18,000 | ||
| 2,45,500 | 2,45,500 | ||
The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.
Prepare Realisation Account, Partners Capital Account, Bank Account.
Realisation Account
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Sundry Debtors | 58,000 | Sundry Creditors | 20,000 |
| Stock | 39,500 | Bills Payable | 25,500 |
| Machinery | 48,000 | Ashok’s Current A/c (Investment) | 40,000 |
| Investment | 42,000 | Babu’s Current A/c (Machinery) | 45,000 |
| Freehold property | 50,500 | Chetan’s Current A/c | 55,000 |
| Bank: | |||
| Sundry Creditors | 18,600 | Bank: | |
| Bills payable | 25,500 | Sundry Debtors | 56,500 |
| Expenses | 3,000 | Stock | 36,500 |
| Profit Transferred to : | Unrecorded computer | 9,000 | |
| Ashok’s Current A/c | 1,200 | ||
| Babu’s Current A/c | 800 | ||
| Chetan’s Current A/c | 400 | ||
| 2,87,500 | 2,87,500 | ||
Partners’ Current Accounts
| Particulars | Ashok | Babu | Chetan | Particulars | Ashok | Babu | Chetan |
| Realisation (Assets taken) | 40,000 | 45,000 | 55,000 | Balance b/d | 10,000 | 5,000 | 3,000 |
| Realisation (Profit) | 1,200 | 800 | 400 | ||||
| Partners Capital A/c | 28,000 | 39,200 | 51,600 | ||||
| 40,000 | 45,000 | 55,000 | 40,000 | 45,000 | 55,000 | ||
Partners’ Capital Accounts
| Particulars | Ashok | Babu | Chetan | Particulars | Ashok | Babu | Chetan |
| Ashok’s Current | 28,800 | Balance b/d | 70,000 | 55,000 | 27,000 | ||
| Babu’s Current | 39200 | Bank | 24,600 | ||||
| Chetan’s Current | 51600 | ||||||
| Bank | 41,200 | 15,800 | |||||
| 70,000 | 55,000 | 51,600 | 70,000 | 55,000 | 51,600 | ||
Babu’s Loan A/c
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Cash A/c | 30,000 | Balance b/d | 30,000 |
| 30,000 | 30,000 | ||
Bank Account
| Particulars | Amount (Rs.) | Particulars | Amount (Rs.) |
| Balance b/d | 7,500 | Realisation (Payment of Expenses and Liabilities) | 47,100 |
| Realisation (Assets realised ) | 102,000 | Babu’s Loan | 30,000 |
| Chetan’s Capital A/c | 24,600 | Ashok’s Capital A/c | 41,200 |
| Babu’s Capital A/c | 15,800 | ||
| 1,34,100 | 1,34,100 | ||
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