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

Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 47,000 By Realisation A/c (Liabilities Paid) 24,000
To Realisation A/c (Assets Realised) 2,16,200 By B’s Capital A/c (Expenses) 2,200
By A’s Capital A/c (Final Payment) 1,04,880
By B’s Capital A/c (Final Payment) 1,17,680
By C’s Capital A/c (Final Payment) 14,440
2,63,200 2,63,200
Illustration 12.
X and Y are partners sharing profits and losses in the ratio of 3 : 2 as at 31st March, 2018,
their Balance Sheet stood as follows:
Liabilities ` Assets `

Creditors 1,60,000 Cash 22,000
Bills Payable 40,000 Cash at Bank 50,000
Loan from X 10,000 Stock 1,60,000
Loan from Mrs. X 30,000 Debtors 1,32,000
Employees’ Provident Fund 8,000 Less: Provision for Doubtful Debts 12,000 1,20,000
Commission Received in Advance 2,000 Plant and Machinery 60,000
Provision for Depreciation (Machinery) 20,000 Land and Building 66,000
General Reserve 50,000 Investments (Face Value ` 4,000) 20,000
Profit and Loss A/c 20,000 Other Investments 10,000
X’s Capital 1,68,000 Goodwill 25,000
Y’s Capital 52,000 2,20,000 Prepaid Insurance 7,000
Deferred Revenue Advertisement
Expenditure 20,000
5,60,000 5,60,000

Note: There is a bill for ` 2,000 under discount. The bill was received from Z.
The firm was dissolved on the given date and the following transactions took place:
(i) Y undertook to pay Mrs. X’s Loan.
(ii) X took over 50% of the Stock at a discount of 20%.
(iii) Remaining Stock was sold at a profit of 30% on cost.
(iv) ` 24,000 of the Book Debts proved bad.
(v) Land and Building sold for ` 3,00,000 through a broker who charged 2% commission.

(vi) Half the Creditors accepted Plant and Machinery at an agreed value of ` 54,000 and
accepted cash in full settlement of their claims after allowing a discount of ` 16,000.

(vii) Remaining Creditors were paid ` 74,000 in final settlement including an Investment
worth ` 4,000 unrecorded in the books.

(viii) Bills Payable falling due on 30th April, 2018 were discharged at a discount of 18% p.a.
(ix) X was to receive ` 11,100 as remuneration for completing the dissolution work and
was to bear Realisation Expenses. Realisation Expenses were ` 9,100 paid by the firm.