Important Adjustments - Journal Entries

Land and Building (book value fl,60,000) sold for f3,00,000

thro a broker, who char ed 2% commission on the deal. To Realisation Ne
2. 2,94,00o
Investment (face value ,4,000 and market value ~3.000) was BankNc Dr. 2,000
realised at 33 ½% less in the o n market. To Realisation Ne
3. Debtors amounting to ,1 ,40,000 were handed over to a debt Bank Ne 2,00o
Dr. 1,63,000
collection ag¢ncy which charged 5% commission. The remaining To Realisation Ne
debtors were '47,000, out of which debtors of,17,000 could not 1,63,00o
be recovered because the same became insolvent.
4. Furniture of~0,000 was sold fur ,68,000 by auctioneer and BankNc Dr.
auctioneer's commission amounted to ~.ooo. To Realisation Ne
66,000
5. Land and building was sold to Raman, a partner fur cash 66,000
BankNc
,5,oo,ooo. Dr. 5,00,000
To Realisation Ne
6. Stock worth ,500 is taken by a partner, Rohit at ,000. 5,00,000
Rohit's Capital Ne Dr. 7,000
To Realisation Ne
7. Bank loan off3,00,000 was paid along with interest of,21,000. Realisation Ne 7,000
Dr. 3,21,000
ToBankNc
8. Sundry creditors amounting to f36,000 which were payable 3,21,000
Realisation Ne Dr. 35,400
after two months were settled at a discount of 10% .a. ToBankNc
9. Creditors amounting to f50,000 which were payable after one 35,400
Realisation Ne Dr. 47,500
month were settled at a discount of 5%.
10. ToBankNc
A partner, Pawan paid to creditors ~4.000. Partners' capitals 47,500
were fixed. Realisation Ne Dr. 4,000
To Pawan's Current Ne
11. Balance Sheet of the firm showed a loan oHl0,000 given by C's 4,000
Realisation Ne Dr. 10,000
brother, E C to ay his brother's loan.
To C's Capital Afc
12. Creditors were ~l 6,000. They accepted Machinery valued at 10,000
No Entry
~18,000 in full settlement of their claim.
13. A creditor to whom fl0,000 was due accepts office equipment Realisation Afc
worth ~.ooo and is aid ~.ooo in cash. Dr. 2,000
ToBankNc
14. Creditors were ~.000. They accepted Buildings valued at 2,000
BankNc
,1,20,000 and aid cash to the firm ~30,000. Dr. 30,000
To Realisation Ne
15. Realisation expenses/ Dissolution cost amounted to ~.500. 30,000
Realisation Ne Dr. 2,500
ToBankNc
16. Realisation expenses amounting to ~3,000 were paid by Ashok, 2,500
Realisation Ne Dr. 3,000
one of the anners, Partners' ca itals were fixed.
To Ashok's Current Ne 3,000
17. Realisation expenses arc to be borne by Rashim for which he will Realisation Ne Dr. 70,000
be paid ~0,000 as remuneration for completing the dissolution
To Rashim's Capital Ne 70,000
roccss. The actual ex nses incurred by Rashim were fl,20,000.
No ent for actual ex nse~l,20,000 aid/incurred by Rashim.
18. Naman, a panner, was appointed to look after the process of (i) Realisation Ne Dr. 9,000
dissolution for which he was allowed a remuneration of~9,000.
To Naman's Capital Ne 9,000
Naman agreed to bear the dissolution expenses. Actual dissolution {ii) Naman's Capital Ne
ex enses ~4,000 were aid b the furn. Dr. 4,000
ToBankNc 4,000
19. Jeev, a partner, agreed to do the work of dissolution for which (i) Realisation Ne
he was allowed a commission of~l0,000. He agreed to bear the Dr. 10,000
To Jcev's Capital Ne 10,000
dissolution expenses. Actual dissolution expenses paid by Jccv (ii) Jcev's Capital Ne Dr. 12,000
were ~12,000. These expenses were paid by Jccv by drawing cash To Bank Ne 12,000
from the firm.
 - ,.,1r.1. • :.1 ... 1•~·-"' ilrlil
20. Amit, a partner was appointed to realise the
t4,000. The actual amount of rcali . assets, at a cost of (i) Realisation Ne
sat1on am ounced to ,3,000. Dr. 4,000
To Amit's Capital Ne 4,000

- 21. Q, a partner was appointed to look aft th

(ii) Realisation Ne

for which he was allowed a remuner _er ;rocess of dissolution No Entry

To Bank Ne
Dr. 3,000
3,000

take over stock worth fl 8 000 ash• at1on

'
° 18 ,000. Q agreed to
1s remunerat" 1h
already been transferred to Realisat" Acco ion. e stock had
10n um.
22. Jay, a partner, was appointed to look aft th
and was allowed a remuneration of~~\ O~processofdissolution (i) Realisation Ne ' Dr. 15,000
dissolution expenses. Actual dissolut" ' O. Jay agreed to bear To Jay's Capital Ne 15,000
ion expenses ~16 000
paid by Vi jay another panner on behalf of Jay. , were (ii) Jay's Capital Ne Dr. 16,000
23, A debtor of ~8,000 already transferred a1· . To Vijay's Capital Ne 16,000
d h al" . to re 1sat1on ace
agree to pay t e re 1Sat1on expenses of~ 800 . fu oum No Entry
10
of his account. ' II settlement
24. There was an old typewriter which had been w · ff
th b ks ntten-o complete! Priya's Capital Ne
from e oo . It was estimated to realise , 400 1 Y Dr. 300
away bJY p· ·
riya at an estimate d price less 25%. · twastaken To Realisation Ne 300
25, There were
f
100 shares of~IO each in Star L· · d
.
.
imtte acquired at a Paras' Capital Ne
cost of 2,000 which had been written-off compIetc Iy fr om the Dr. 400
Priya's Capital Ne Dr. 200
books. These shares are valued@ ?6 each and di "d d
. . . v1 e among the To Realisation Ne 600
partners Paras and Pnya m their profit sharing ratio 2 : I.
26. An unrecorded furniture realised ~5,500.
Bank Ne Dr. 5,500
To Realisation Ne 5,500
27. There was an old computer which was written-off in the books Bank Ne Dr. 3,000
of accounts in the previous year. The same was sold to a
Nitin for ?3,000. partner, To Realisation Ne 3,000

28. The firm's goodwill was realised at ?30,000. Bank Ne Dr. 30,000
To Realisation Ne 30,000
29. Paras agreed to takeover the firm's goodwill (not recorded in the Paras' Capital Ne Dr. 30,000
books of the firm), at a valuation oH30,000. To Realisation Ne 30,000
30. The firm paid ?40,000 as compensation to employees. Realisation Ne Dr. 40,000
To Bank Ne 40,000
31. A bills receivable oH3,000 which was discounted from a bank Realisation Ne Dr. 3,000
at ?2,800 was dishonoured as the acceptor had become insolvent To Bank Ne 3,000
and hence the bill had to be met by the firm.
32. There was an outstanding bill for repairs for ?2000, which was Realisation Ne Dr. 2,000
paid off. To Bank Ne 2,000
33. Profit on Realisation amounting to ?18,000 is robe distributed Realisation Ne Dr. · 18,000
between the partners Ashish and Tarun in the ratio of 5:7. To Ashish's Capital Ne 7,500
To Tarun's Capital Ne 10,500
34. Loss on realisation ?42,000 was to be distributed berween the Arti's Current Ale Dr. 18,000
partners Arri and Karim in the ratio of 3:4. Partners' capitals Karim's Current Ne Dr. 24,000
were fixed. To Realisation Ale 42,000
35. Gopal and Bairam art: partners, who share profits in the ratio of Reserve Fund Ale Dr. 13,500
3 : 2. On 31 March 2020, the firm was dissolved. Reserve fund Workmen's Compensation Fund Ale Dr. 20,000
~13,500 and Workmen's Compensation F1md ?20,000 appeared To Gopal's Capital Ale 20,100
in the balance sheet on the date of dissolution. To Balram's Capital Ne 13,400
36. Shyam and Madhav were sharing profits (or losses) in the ratio of Shyam's Current Ale Dr. 4,500
3,000
3 : 2. On 31 March 2020, the firm was dissolved. Profit and Loss Madhav's Current Ale
Dr.
Account ~2,500 and Advertisement expenditure account ?5,000 To Profit and Loss Ale 2,500
To Advertisemen.t Expenditure Ale - 5,000
appeared on the assets side of the balance sheet. Partners' capitals
- were fixed.
37. A partner Kartik's loan offl2,000 is paid. Kartik's Loan Ale Dr. 12,000
,__ To Bank Ale 12,000
38. A partner Ganesh's loan of~l2,000 was settled at ~12,500. Ganesh's Loan Ale Dr. 12,000
Realisation Ale Dr. 500
To Bank Ale 12,500
i---
39. Nandi's Loan Ale Dr. 12,000

---~
A panner Nandi's loan oH'l2,000 was settled at ~I 1,000. 11 ,000
To Bank Ale
To Realisation Ale 1,000
 40. Loan to A ~10,000 is appearing on the assets side of the Balance
Sheet.
Bank Ale Dr. 10,000 --
41.
To Loan toAA/c
On the dissolution of the firm of P and Q, the capital accounts P's Capital Ale
of P and Q showed credit balances of ~1,20,000 and ~80,000 Q's Capital Ale
Dr.
Dr.
1,20,000
80,000
--
10,000

respectively after all adjustments related to accumulated profits, To Bank Ale 2,00,000
realisation profit, etc.
42. On the dissolution of the firm of A and B, the capital account of Bank Ale
A showed a debit balance oH20,000 after all adjustments related To /\s Capital Ale
Dr. 20,000 --
20,000
to accumulated profits, realisation loss, etc.
43. On the dissolution of the firm of P and Q, the current account
of P showed a credit balance of~15,000 and Q 's current account
(i) P's Current Ale
To P's Capital Ale
Dr. 15,000 -
15,000
showed a debit balance oH5,000. (ii) Q's Capital Ale Dr. 5,000
To Q's Current Ale 5,000
44. A machine that was not recorded in the books was taken over by Chander's Capital Ale Dr. 3,000 -
Chander at ~3,000 whereas its expected value was ~5,000. To Realisation Ale 3,000
45. Total creditors of the firm were~40,000. Creditors worth ~10,000 Realisation Ale Dr. 27,000 -
were given a piece of furniture costing ~8,000 in full and final To Bank Ale 27,000
settlement. Remaining creditors allowed a discount of 10%.
46. Amitesh, an old customer whose account for ~60,000 was Bank Ale Dr. 54,000
written off as bad debt in the previous year, paid 90%. To Realisation Ale 54,ooo
47. There was a bill of exchange oftl0,000 under discount. The bill Realisation Ale Dr. 10,000
was received from Derek who became insolvent. To Bank Ale 10,000
48. Bills payable of~30,000 falling due after 1 month were discharged Realisation Ale Dr. 29,550
at ~29,550. To Bank Ale 29,550
49. Creditors of~30,000 took over stock of~l0,000 at 10% Realisation Ale Dr. 21,000
discount and the balance was paid to them in cash. To Bank Ale 21,000
50. The book value of assets (other than cash and bank) transferred to Atul's Capital Ale Dr. 40,000
Realisation Account is ~l ,00,000. 50% of the assets are taken over Bank Ale Dr. 26,000
by a panner Atul, at a discount of 20%; 40% of the remaining To Realisation Ale 66,000
assets are sold at a profit of 30% on cost; 5% of the balance being No entry for assets worth ~l.500 being obsolete and assets worth
obsolete, realised nothing and remaining assets are handed over to ~28,500 taken over by creditors in full settlement of their claim.
a Creditor, in full settlement of his claim.
51. The furn had stock oH80,000. Ankit took over 50% of the stock Ankit's Capital Ale Dr. 32,000
at a discount of 20% while remaining stock was sold off at a profit Bank Ale Dr. 52,000
of 30% on cost. To Realisation Ale 84,000
52. A liability under a suit for damages included in creditors was Realisation Ale Dr. 69,000
settled at t32,000 as against only ~13,000 provided in the To Bank Ale
books. Total creditors of the firm were ~50,000. 69,000
53. Bobby's sister's loan oft20,000 was paid off along with interest Realisation Ale Dr. 22,000
of~2.ooo. To Bank Ale 22,000
54. A machinery with a book value of f6,00,000 was taken over Gaurav's Capital Ale
Dr. 3,00,000
by Gaurav at 50% and stock worth f5 ,000 was taken over by a To Realisation Ale 3,00,000
creditor off9,000 in full settlement of his claim.
No entry for stock worth f5,000 taken over by a creditor of~9,000 in full
settlement of his claim.
55. The remaining creditors were paid ~6,000 in full settlement of (i) Realisation Ale
Dr. 76,000
their claim and the remaining assets were taken over by Vaibhav To BankA/c
for fl 7,000. 76,000
(ii) Vaibhav's Capital Ale Dr. 17,000
To Realisation Ale 17,000
56. Creditors amounting to f5,000 were paid f3,500 in full
Realisation Ale Dr. 3,500
settlement of their claim and balance creditors were handed over To Bank Ale 3,500
stock oH90,000 in full settlement of their claim oH95,000.
No entry for stock worth ~90,000 taken over by creditors of ~95,000 in
full settlement.
57. Stock of~,500 included obsolete items worth ~500, which Bank Ale Dr. 7,000
could not be realised. Remaining stock realised in full. To Realisation Ale 7,000
58. Total investments were ~l,50,000. Investments with book value Vinit's Capital Ale
Dr. 45,000
of fl ,00,000 were given to Creditors in full settlement of their To Realisation Ale 45,000
account. The remaining investments were taken over by Vinit at
an agreed value off45,000.
59. Total debtors were f2,40,000. Anju takes over debtors amounting Anju's Capital Ale
Dr. 1,85,000
to f2,00,000 at f I ,85,000. San ju takes over remaining debtors at Sanju's Capital Ale 32,000
Dr.
80% of book value. To Realisation Ale 2,17,000
 6'J. 1here was a Motor Cycle in the firm which was bo

--
firm's money, was not shown in the books of th fi ught out of the BankAJc Dr. 10,000
sold to Lily for ~l 0,000. e rm. It was now To Realisation Ale 10,000
1here was a contingent
61 · bill of f5,000. liability in respect of .
outstanding electric Realisation Ale Dr. 5,000
To BankA/c 5,000
62. Total debtors were d
~2,00,000. Sunil a debt
,
H
or o 50,000 had to BankAJc
pay the amount ue 3 months after the date Of d· Dr. 1,97,500
was allowed a discount of 5% for making pay is~o1utio~. He To Realisation Ale 1,97,500
. . d b ment immediately.
1he remammg e tors were collected in full. ·
L---
63, Total stock were "l ,50,000. 50% of the stock w tak
. k . h' as en over by Ragini's Capital Ale Dr. 60,000
Ragin1 at mar et price w 1ch was 20% less than th b k al

-
. . l e oo v ue Bank Ale Dr. 60,000
and the remammg was so d at market price.
"3
64, Dissolution expenses were "8,000. ' 000 were to be borne by
To Realisation Ale
Realisation Ale Dr. 3,000
1,20,000

the furn and the balance by Dhrupad. The expenses were paid
To Bank Ale 3,000
by him.
No entry for payment of realisation expenses "5,000 by Dhrupad since he
- was to bear this amount of expenses.
65, Buildings realised fo~ "1,90,000, Bills receivable realised for Bank Ale Dr. 5,75,000
fl,10,000; Stock realised "l,50,000; and Machinery was sold to
To Realisation Ale 5,75,000
Sonia, a partner for "50,000 and furniture for ~5,000.
-66, Contingent liability in respect of bills discounted with the bank
Realisation Ale Dr. 8,800
was also materialised and paid off"9,800.
-67, Rita was appointed to realise the assets. Rita was to receive 5%
To Bank Ale
Realisation Ale
9,800
Dr. 7,870
commission on the sale of assets (except cash) and was to bear all
To Rits's Capital Ale 7,870
expenses of realisation. Assets were realised as follows: Debtors
Note: Rita's commission= 5% of"l,57,400 = ~.870
~30,000; Stock "26,000; Plant "42,750; Investments 85% of No entry for payment of realisation expenses "4,100 by Rita since she was
the book value (Book value was "69,000). Expenses of realisation to bear this amount of expenses.
amounted to "4,100, which were paid by Rita.
68. On the date of dissolution of the firm, Investment Fluctuation Investment Fluctuation Fund Ale Dr. 15,000
Fund appeared in the Balance Sheet at "15,000. To Realisation Ale 15,000
69. On the date of dissolution of the firm, Goodwill appeared on the Realisation Ale Dr. 20,000
assets side of the Balance Sheet at t20,ooo. To Goodwill Ale 20,000
70. Total creditors were t80,000. One of the creditors for ~l 0,000 Realisation Ale Dr. 77,000
was paid only ~3,000 in full settlement of his account. To Bank Ale 77,000
71. Total stock were ~0,000. Ganesh took over part of stock at Ganesh's Capital Ale Dr. 8,000
fS,000 (being 20% less than the book value). Balance of the Stock Bank Ale Dr. 42,000
was sold at 30% discount. To Realisation Ale 50,000
72. Total investments were "I,40,000. Romesh took over some of Romesh's Capital Ale Dr. 8,100
the Investments at "8,100 (book value less 10%). The remaining Bhawan's Capital Ale Dr. 1,17,000
investments were taken over by Bhawan at 90% of the book value To Realisation Ale 1,25,100
less f900 discount.
73. Total creditors were ~80,000 and bills payable were ~40,000. It Realisation Ale Dr. 1,03,000
is found that investment not recorded in the books amounted to To Bank Ale 1,03,000
fl 0,000. The same were accepted by one creditor for this amount No entry for investment worth ~10,000 taken over by creditors for this
and other Creditors were paid at a discount of I 0%. Bills payable amount in full settlement,
were paid full.
74. Bank loan was ?60,000. Bhawan paid bank loan along with one Realisation Ale Dr. 63,600
year interest at 6% p.a. To Bank Ale 63,600
75. Stock has book value of ~24,000. Kanav took over 40% of the Kanav's Capital Ale Dr. 7,680
stock at 20% less than book value. Remaining stock was sold at Bank Ale Dr. 15,840

---
76.
a gain of 10%.
Debtors were ~34,000 and creditors ~80,000. Half of the debtors (i) Bank
To Realisation Ale
Ale Dr. 12,000
23,520

realised ,12,000 and remaining debtors were used to pay off25% To Realisation Ne 12,000
of the creditors. (ii) Realisation Ale Dr. 60,000
To Bank Ale 60,000
No entry for debtors oH22,000 used to pay off creditors of ~20,000 in
r---. ____ full settlement.
77 Bank Ale Dr.
· ~~ta.I debtors were ~25,000. Debtors realised 90% only and 23,700
---- ,lOO were recovered for bad debts written-off last year. To Realisation Ale 23,700
78. Total debtors were ~24,200. A takes over debtors amounting to /ls Capital Ne
Dr.
Dr.
17,200
2,100
-
~20,000 at ~17,200. The remaining debtors were sold to a debt Bank Ne
To Realisation Ne 19,300
collecting agency at 50% of the Book value.
Dr. 7,200
79. Sundry assets were ~17,000. B is to take over some sundry assets B's Capital Ne 8,100
Dr.
at ~,200 (being 10% less than the book value) . C is to take over C's Capital Ne
To Realisation Ne 15,300
remaining sundry assets at 90% of the book value.
Dr. 2,500
80. Office equipment of~5,000 was accepted by a creditor for ~6,000 Realisation Ne 2,500
at ~3,500 and the balance was paid to him by cheque. To Bank Ne
No entry for office equipment of~5,000 taken over by creditor at ~3.500.
Dr. 2,000
81 Bank overdraft was ~ ,000. Bankers accepted stock worth ~5,000 Realisation Ne 2,000
To Bank Ne
at the same value and the balance in cash.
82. The firm purchased 200 convertible debentures of a leasing No Entry
company in 2016-17. After sometime the investment was treated
as bad and was written off. These debentures were found to be
having a market value of~B,000 and were accepted by a creditor
at this value. Dr. 5,500
83. There was a typewriter which realised ~500 and goodwill was sold Bank Ne 5,500
To Realisation Ne
for~5,000. Dr. 4,000
84. Stocks were of~25,000. Y took over part of stock atf4,000 (being Y's Capital Ne Dr. 10,000
Bank Ne -
20% less than the book value). Balance stock realised 50%. 14,000
To Realisation Ne
Dr. 8,500
85. Anubha looked after the dissolution work for remuneration of (i) Realisation Ne 8,500
To Anubha's Capital Ne
~8,500 and agreed to bear dissolution expenses upto f6,000. Dr. 1,600
(ii) Realisation Ne
Actual expenses paid by her were ~,600. 1,600
To Anubha's Capital Ne
 for ~10,000. There was a contingent liability in respect of outstanding electric bill of~5,000. Bills Receivable was
by Rose at ~33,000. n o,..er
Prepare Realisation Account, Partners' Capital Acounts and Bank Account.
Q.29 Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3 : I : I. On March 31st 2022 they decided to d·
th eir firm. On that date their Balance Sheet was as under. !Ssolve
Balance Sheet of Arnab Ragini and Dhrupad as 31st March, 2020
'
Liabilities Amount ro Assets Amount R)
Creditors 60,000 Bank so,ooo
Debtors 1,70,000
Arnab's Brother's Loan 95,000
Less: Provision for 2Q,QQQ 1,so,000
Dhrupad's Loan 1,00,000
Investment Flucruation Fund 50,000 Bad Debts
Capital: Stock 1,50,000
Arnab 2,75,000 Investments 2,so,000
Ragini 2,00,000 Building 3,00,000
Dhrupad l,Z0,000 6,45,000 Profit and Loss Account so,ooo

The
9,50,000
assets were realised and the liabilities were paid as under:
9,50,000-
-
Arnab agreed to pay his brother's loan.
(i)
(ii)
Investments realized 20% less.
(iii)
Creditors were paid at 10% less.
(iv)
Building was auctioned for ~3,55,000. Commission on auction was ~5,000.
(v)
50% of the stock was taken over by Ragini at market price which was 20% less than the book value and the remaining
was sold at market price.
(vi) Dissolution expenses were ~8,000. ~3,000 were to be borne by the firm and the balance by Dhrupad. The expenses were
paid by him.
Prepare Realization Account, Bank Account and Partners' Capital Accounts.
Q.30 San jay, Tarun and Vineet shared profit in the ratio of 3 : 2 : 1. On December 31,2022 their balance sheet was as follows:
Balance Sheet ofSanjay, Tarun and Vineet as on December 31, 2022
Liabilities . Amount ro Assets
. Amount (t)
Capitals: Plant 90,000
Sanjay 1,00,000 Debtors 60,000
Tarun 1,00,000 Furniture 32,000
Vineet zo,ooo 2,70,000 Srock 60,000
80,000 Investments 70,000
Creditors
30,000 Bills receivable 36,000
Bills payable
Bank 32,000
3,80,000 3,80,000
. d the firm was dissolved. Sanpy was appomred to realise the. .assets. SanJay was to receive , comm1ss1on
. 60,o . . on the
0 n th1s ate
sale of assets (except bank balance) and was to bear all expenses of real1sanon. Expenses of realisation amounted to ~4,500.
Sanjay realised the assets as follows: Plant ~2,000, Debtors ~54,000, Furniture ~18,000, Srock 90% of the book value,
"#-76 000 and Bills receivable ~31,000.
Investments .' ' . , A t Capital Accounts and Ban k Accounr.
Prepare Real 1sanon ccoun , .
Bhawan were in partnership shanng profit and losses as 3 : 2. Their Balance Sheer a M ch
Romes h and son ar 31, 2022, was as
Q.31
follows: Balance Sheet of Romesh and Bhawan as on March 31 , 2022
Amount ro Assets
Liabilities 60,000 Cash at bank Amount ro
Bank Loan 80,000 Debtors 30,000
40,000 Srock 70,000
Creditors
20,000 Investments 2,00,000
Bills Payables
Buildings 1,40,000
Bhawan's Loan
1,00,000 60,000
Capitals:
3,00,000
Romesh

- Bhawan
- 5,00,000
5,00,000
 They decided to dissolve the firm. The following information is available:
(i) D:btors were re~overed 5% less. Stock was realised at book value and building was sold for t5 l ,OOO, .
(ii) It 1s found that mvestment not recorded in the books amounted to ~lO,OOO. The same were accepted by one creditor for
this amount and other Creditors were paid at a discount of 10%. Bills payable were paid full.
(iii) Ro mesh took over some of the Investments at ~8, 100 (book value less 10o/o). The remaining investments were taken over
by Bhawan at 90% of the book value less ~900 discount.
(iv) Bhawan paid bank loan along with one year interest at 6% p.a.
(v) An unrecorded liability of ~5,000 paid.
Prepare necessary ledger accounts to close the books of the firm.
(t32 Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their
partnership firm on 31St March, 2022. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid
tl,000 as commission for his services. The balance sheet of the firm on 31st March, 2022 was as follows:
Liabilities '
Amount~ ;. As~ets • .. , ... Amount~
'
Creditors
80,000 Building 1,20,000
Mrs. Pradeep's Loan
40,000 Investment 30,600
Rajesh's Loan
24,000 Debtors 34,000
Investment Fluctuation Fund 8,000 Less: Provision for Doubtful Debts 1.Q.00 30,000
Capitals:
Bills Receivable 37,400
Pradeep 40,000 Bank 6,000
Rajesh 75,000 Profit and Loss Ale 8,000
Current Accounts:
Goodwill 4,000
Pradeep 2,000
Rajesh 7.000 9,000
2,36,000 2,36,000
(i) Pradeep agreed to pay off his wife's loan.
(ii) Half of the debtors realised ~12,000 and remaining debtors were used to pay off 25% of the creditors.
(iii) Investment was sold to Rajesh for ~27,000
(iv) Building realised tl,52,000 . •
(v) Remaining creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.
{vi) Bill receivables were settled at a loss oH'l ,400.
(vii) Realisation expenses amounted to ~2,500.
Prepare Realisation Account.
{t33 A, B and C were partners sharing profits in the ratio of 3 : I : I. Their Balance sheet as on 31st March 2022, the date on
which they dissolve their firm, was as follows:
Balance Sheet of A, Band Cason March 31, 2022
. '. , .
Liabilities
<

- >s"'
J ';.,._¥;,..,. ..., -y ;;:_ •-"
Amount~ -- Assets . -:. .. ~.'::t:-<1-:•'Hll :,..;.• · Mount~
Capitals: Sundry Assets 17,000
A 27,500 Stock 7,800
•·
B 10,000 Debtors 24,200
C 7.000 44,500 Less Provision for doubtful debts 1.200 23,000
Loan 1,500 Bills Receivables 1,000
Creditors 6,000 Bank 3,200
52,000 52,000

It was agreed that: . t t20 000 at tl 7 200 and the creditors of f6,000 were to be
(a) A to take over Bills Receivables at f800, debtors amountmg O ' '

(b) paid
.
by him at this figure.
c 1
d t '!h 200 (being 10% less than the book value)
000 d some sun ry assets a , , '
(c) B 1s to take over all stock ror " , an f th b k alue and assume the responsibility of discharge of loan
C to take over remaining sundry assets at 90% 0 e 00 V
together with accrued interest oft'300.
(d) Tue expenses of realisation were t'270. . SO<¾ of the Book value.
( ) 1h
e e remaining debtors were so Id to a d ebt collectmg agency at 0

Prepare Realisation Ale, Partners' Capital Ales and Bank Ale.