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6.4 Double Entry Book Keeping (Section A)—ISC XII

(v) Plant realised ` 2,50,000; Building ` 4,00,000; Goodwill ` 60,000; and remaining
Invest ments at ` 45,000.
(vi) There was old Furniture in the firm which had been written off completely from the
books. It is now estimated to realise ` 3,000. It was taken by Bose at this estimated price.
(vii) Realisation Expenses were ` 10,000.
Show Realisation Account, Partners’ Capital Accounts and Bank Account in the books of the firm.
Solution:

Dr. REALISATION ACCOUNT Cr.
Particulars ` Particulars `
To Sundry Assets (Transfer): By Sundry Liabilities (Transfer):
Stock-in-Trade A/c 50,000 Sundry Creditors A/c 3,00,000
Investments A/c 1,00,000 Bills Payable A/c 80,000
Debtors A/c 2,00,000 Mrs. Amrit’s Loan A/c 50,000
Plant and Machinery A/c 2,00,000 Mrs. Bose’s Loan A/c 1,00,000
Building A/c 1,50,000 Machinery Replacement Reserve 10,000
Goodwill A/c 40,000 7,40,000 Provision for Doubtful Debts A/c 20,000 5,60,000
To Amrit’s Capital A/c (Mrs. Amrit’s Loan) 50,000 By Amrit’s Capital A/c (Stock) 40,000
To Bank A/c (Liabilities Paid): By Bose’s Capital A/c (Half Investments) 45,000
Creditors ` (3,00,000 – 1,500) (WN) 2,98,500 By Bank A/c (Assets Realised):
Bills Payable ` (80,000 – 400) (WN) 79,600 Debtors 1,90,000
Realisation Expenses 10,000 Plant 2,50,000
Mrs. Bose’s Loan 1,00,000 4,88,100 Building 4,00,000
To Gain (Profit) transferred to: Goodwill 60,000
Amrit’s Capital A/c 1,57,450 Investments (Remaining) 45,000 9,45,000
Bose’s Capital A/c 1,57,450 3,14,900 By Bose’s Capital A/c (Furniture) 3,000
15,93,000 15,93,000

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Amrit (`) Bose (`) Particulars Amrit (`) Bose (`)
To Realisation A/c 40,000 45,000 By Balance b/d 1,00,000 1,00,000
To Realisation A/c ... 3,000 By Realisation A/c 50,000 ...
To Profit and Loss A/c 17,500 17,500 (Mrs. Amrit’s Loan)
To Bank A/c (Final Settlement) 2,99,950 2,41,950 By Realisation A/c (Gain) 1,57,450 1,57,450
By General Reserve A/c 50,000 50,000
3,57,450 3,07,450 3,57,450 3,07,450

Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 80,000 By Realisation A/c (Liabilities Paid) 4,88,100
To Cash A/c 5,000 By Amrit’s Capital A/c (Final Payment) 2,99,950
To Realisation A/c (Assets Realised) 9,45,000 By Bose’s Capital A/c (Final Payment) 2,41,950
10,30,000 10,30,000
Working Note: Discount on— Creditors = ` 3,00,000 × 6/100 × 1/12 = ` 1,500
Bills Payable = ` 80,000 × 6/100 × 1/12 = ` 400.