Page 159 - ISCDEBK-12

Dissolution of a Partnership Firm 6.33
Solution:

Dr. REALISATION ACCOUNT Cr.
Particulars ` Particulars `
To Fixed Assets A/c 21,000 By Creditors A/c 14,320
To Stock A/c 11,200 By Elephant Ltd. 48,000
To Sundry Debtors A/c 19,600 By Cat’s Capital A/c 4,200
To Bank A/c (Creditors) 14,000 (Furniture Taken Over)
To Gain (Profit) transferred to: By Bank A/c (Debtors) 19,200
Cat’s Capital A/c (3/4) 14,940
Rat’s Capital A/c (1/4) 4,980 19,920
85,720 85,720

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars Cat Rat Particulars Cat Rat
` ` ` `
To Realisation A/c (Furniture) 4,200 ... By Balance b/d 24,000 8,000
To Preference Shares of By Current A/cs 4,200 2,000
Elephant Ltd. A/c 4,500 4,500 (Transfer)
(` 12,000 – ` 3,000 = ` 9,000) By Realisation A/c 14,940 4,980
(divided equally) (See Statement (Gain)
of Distribution of Equity and
Preference Shares)
To Equity Shares of Elephant Ltd.
A/c (3 : 1) 15,000 5,000
To Bank A/c (Final Payment) 19,440 5,480
43,140 14,980 43,140 14,980

Dr. ELEPHANT LTD.’S ACCOUNT Cr.
Particulars ` Particulars `
To Realisation A/c 48,000 By Bank A/c 16,000
(Stock and Fixed Assets By Preference Shares of Elephant Ltd. A/c 12,000
excluding Furniture) (160 × ` 75)
By Equity Shares of Elephant Ltd. A/c 20,000
(1,600 × ` 12.5*)
48,000 48,000

` `
* Total Purchase Consideration 48,000

Less: Cash Received 16,000
Value of Preference Shares Received 12,000 28,000
Balance being value of 1,600 Equity Shares 20,000
∴ Issue price of an Equity Share = ` 20,000/1,600 = ` 12.5.