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Dissolution of a Partnership Firm 6.27
(x) W, an old customer, whose account was written off as bad in the previous year, paid
` 1,000 which is not included in the above stated Debtors.
(xi) Z proved insolvent and a first and final dividend of 25% was received from his estate.
(xii) Investments realised 150% of their face value and Other Investments realised ` 10,000.
(xiii) Workmen Compensation claim amounted to ` 2,400.

(xiv) Commission received in advance was returned to customers after deducting ` 400.
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 12,000
Stock A/c 1,60,000 By Creditors A/c 1,60,000
Debtors A/c 1,32,000 By Bills Payable A/c 40,000
Plant and Machinery A/c 60,000 By Mrs. X’s Loan A/c 30,000
Land and Building A/c 66,000 By Employees’ Provident Fund A/c 8,000
Investments A/c 20,000 By Commission Received in Advance A/c 2,000
Other Investments A/c 10,000 By Machinery Depreciation Reserve A/c 20,000
Goodwill A/c 25,000 By X’s Capital A/c (Stock) 64,000
Prepaid Insurance A/c 7,000 4,80,000 By Bank A/c (Assets Realised):
To Y’s Capital A/c (Mrs. X’s Loan) 30,000 Stock 1,04,000
To Bank A/c (Liabilities Paid): Debtors 1,08,000
Creditors (` 10,000 + ` 70,000) 80,000 Land and Building 2,94,000
Bills Payable 39,400 Investments 6,000
EPF 8,000 Other Investments 10,000 5,22,000
Commission 1,600 By Bank A/c (Bad Debts Recovered) 1,000
Workmen By Bank A/c (From Z) 500
Compensation Claim 2,400 1,31,400
To X’s Capital A/c (Realisation Expenses) 11,100
To Bank A/c (Discounted B/R) 2,000
To Gain (Profit) on Realisation transferred to:
X’s Capital A/c 1,23,000
Y’s Capital A/c 82,000 2,05,000
8,59,500 8,59,500

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars X Y Particulars X Y
` ` ` `
To Realisation A/c (Stock) 64,000 ... By Balance b/d 1,68,000 52,000
To Bank A/c 9,100 ... By Realisation A/c (Mrs. X’s Loan) ... 30,000
To Deferred Revenue By Realisation A/c (Expenses) 11,100 ...
Advertisement Expenditure A/c 12,000 8,000 By Realisation A/c (Gain) 1,23,000 82,000
To Bank A/c 2,59,000 1,84,000 By General Reserve A/c 30,000 20,000
By Profit and Loss A/c 12,000 8,000
3,44,100 1,92,000 3,44,100 1,92,000