Page 151 - ISCDEBK-12

Dissolution of a Partnership Firm 6.25
B took over the responsibility of completing dissolution and he is granted salary of
` 800 per month. Actual Realisation Expenses amounting to ` 2,200 were paid by the firm
but were to be borne by B. Dissolution was completed and final payments were made
on 30th July, 2018.
You are required to prepare Realisation Account, Partners’ Capital Accounts and Bank
Account.

Solution:
Dr. REALISATION ACCOUNT Cr.

Particulars ` Particulars `
To Sundry Assets (Transfer): By Provision for Doubtful Debts A/c 1,000
Fixed Assets A/c 1,00,000 By Investments Fluctuation Reserve A/c 1,000
Insurance Claim Receivable A/c 50,000 By Creditors A/c 37,000
Debtors A/c 20,000 By Outstanding Rent A/c 4,000
Stock A/c 16,000 By A’s Capital A/c 12,000
Investments A/c 16,000 2,02,000 (Investments Taken Over)
To B’s Capital A/c (Creditors Assumed) 19,800 By Bank A/c (Assets Realised):
To B’s Capital A/c 3,200 Stock 14,000
(Salary ` 800 × 4) Debtors 18,000
To Bank A/c (Liabilities Paid): Bad Debts Recovered 1,600
Creditors 15,000 Unrecorded Asset 2,600
Unrecorded Liabilities 5,000 Fixed Assets 1,40,000
Outstanding Rent 4,000 24,000 Insurance Claim 40,000 2,16,200
To Capital A/cs (Gain):
A 8,880
B 8,880
C 4,440 22,200
2,71,200 2,71,200

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars A B C Particulars A B C
` ` ` ` ` `
To Balance b/d ... ... 4,000 By Balance b/d 80,000 60,000 ...
To Realisation A/c 12,000 ... ... By Reserve Fund A/c 28,000 28,000 14,000
To Bank A/c (Actual ... 2,200 ... By Realisation A/c ... 23,000 ...
Realisastion Exp.) (Creditors + Salary)
To Bank A/c 1,04,880 1,17,680 14,440 (` 19,800 + ` 3,200)
(Final Settlement) By Realisation A/c 8,880 8,880 4,440
(Gain)
1,16,880 1,19,880 18,440 1,16,880 1,19,880 18,440