Page 143 - ISCDEBK-12

Dissolution of a Partnership Firm 6.17

BALANCE SHEET as at 1st April, 2018
Liabilities ` Assets `
Capital A/cs: Plant and Machinery 80,000
Kumar 60,000 Furniture 45,000
Sham 40,000 Car 25,000
Ram 30,000 1,30,000 Stock-in-Trade 30,000
Current A/cs: Sundry Debtors 71,000
Kumar 8,000 Cash at Bank 14,000
Sham 10,000 18,000 Current A/c:
Sundry Creditors 1,20,000 Ram 3,000
2,68,000 2,68,000
The following information is given:
(i) Plant and Machinery of book value ` 40,000 were taken by Kumar at an agreed value
of ` 45,000 and the remaining Machinery realised ` 50,000.
(ii) Furniture realised ` 40,000.
(iii) Car was taken by Sham for ` 30,000.
(iv) Sundry Debtors included a Bad Debt for ` 1,200 and the rest were realised at a cash
discount of 10%.
(v) Stock worth ` 5,000 was taken by Ram for ` 5,200 and the rest realised at 20% above
their book value.
(vi) A Creditor for ` 2,000 was untraceable and other creditors accepted payment allowing
15% discount.
(vii) Realisation Expenses paid to an agency carrying out dissolution amounted to ` 5,000.
(viii) Sale of Plant and Machinery, Furniture, Car, Stock and Realisation Expenses are
subject to levy of CGST and SGST @ 9% each.
You are required to pass the Journal entries, prepare Realisation Account, CGST and SGST
Accounts, Bank Account, and Partners’ Capital Accounts showing final payments to them.

Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Realisation A/c ...Dr. 2,51,000
To Plant and Machinery A/c 80,000
To Furniture A/c 45,000
To Car A/c 25,000
To Stock-in-Trade A/c 30,000
To Sundry Debtors A/c 71,000
(Being the assets transferred)
(ii) Sundry Creditors A/c ...Dr. 1,20,000
To Realisation A/c 1,20,000
(Being the liability transferred)
(iii) Kumar’s Capital A/c ...Dr. 53,100
To Realisation A/c 45,000
To Outut CGST A/c 4,050
To Output SGST A/c 4,050
(Being the machinery taken by Kumar, CGST and SGST charged @ 9% each)