Page 133 - ISCDEBK-12

Dissolution of a Partnership Firm 6.7
Solution:
Dr. REALISATION ACCOUNT Cr.
Particulars ` Particulars `

To Sundry Debtors A/c 50,000 By Trade Creditors A/c 70,000
To Stock A/c 60,000 By Gaurav’s Capital A/c (Stock) 55,000
To Furniture A/c 25,000 By Amar’s Capital A/c (Building) 4,00,000
To Patents A/c 35,000 By Bank A/c (Assets Realised):
To Machinery A/c 1,00,000 Sundry Debtors 48,000
To Building A/c 3,20,000 Furniture 17,000
To Partap’s Capital A/c (Expenses) 10,000 Machinery 80,000 1,45,000
To Bank A/c (Trade Creditors) 65,000
To Gain (Profit) transferred to:
Partap’s Capital A/c 2,500
Gaurav’s Capital A/c 1,500
Amar’s Capital A/c 1,000 5,000
6,70,000 6,70,000

Dr. PARTNERS’ CURRENT ACCOUNTS Cr.
Particulars Partap (`) Gaurav (`) Amar (`) Particulars Partap (`) Gaurav (`) Amar (`)
To Balance b/d ... ... 10,000 By Balance b/d 30,000 20,000 ...
To Partners’ Capital A/cs 30,000 20,000 ... By Amar’s Capital A/c ... ... 10,000
30,000 20,000 10,000 30,000 20,000 10,000

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Partap (`) Gaurav (`) Amar (`) Particulars Partap (`) Gaurav (`) Amar (`)
To Amar’s Current A/c ... ... 10,000 By Balance b/d 2,00,000 1,50,000 1,50,000
To Realisation A/c ... 55,000 4,00,000 By Partners’ Current A/cs 30,000 20,000 ...
To Advertisement By Profit and Loss A/c 25,000 15,000 10,000
Suspense A/c* 15,000 9,000 6,000 By Workmen
To Bank A/c 12,000 ... ... Compensation
(Realisation Exp.) Reserve A/c 15,000 9,000 6,000
To Bank A/c (Bal. Fig.) 2,55,500 1,31,500 ... By Realisation A/c 10,000 ... ...
(Final Payment) (Expenses)
By Realisation A/c 2,500 1,500 1,000
(Gain)
By Bank A/c (Bal. Fig.) ... ... 2,49,000
2,82,500 1,95,500 4,16,000 2,82,500 1,95,500 4,16,000
* Advertisement Suspense Account is a fictitious asset. Therefore, it is debited to Partners’ Capital
Accounts in their profit-sharing ratio.
Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 70,000 By Realisation A/c (Trade Creditors) 65,000
To Realisation A/c (Assets Realised) 1,45,000 By Partap’s Capital A/c (Expenses) 12,000
To Amar’s Capital A/c (Cash Brought in) 2,49,000 By Partap’s Capital A/c (Final Payment) 2,55,500
By Gaurav’s Capital A/c (Final Payment) 1,31,500
4,64,000 4,64,000

Note: Realisation expenses are borne by Partap. Therefore, no entry is passed for realisation expenses but
expenses are paid by the firm on his behalf, these expenses are debited to his Capital Account.