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

Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 3,720 By Realisation A/c (Creditors Paid) 14,000
To Elephant Ltd. 16,000 By Cat’s Capital A/c (Final Payment) 19,440
To Realisation A/c (Debtors Realised) 19,200 By Rat’s Capital A/c (Final Payment) 5,480
38,920 38,920

STATEMENT SHOWING DISTRIBUTION OF EQUITY AND PREFERENCE SHARES
Particulars Total Cat Rat
` ` `
(i) Preference Shares of Elephant Ltd. 160 Preference Shares of ` 100 each,
valued @ ` 75 each 12,000
Less: Preference Shares allotted to Rat against his Loan 3,000
Balance Distributed between Partners equally against Capital 9,000 4,500 4,500
(ii) Equity Shares of Elephant Ltd. 1,600 shares of ` 10 each, valued @ ` 12.5
per share distributed in the ratio of capitals, i.e., 24,000 : 8,000 or 3 : 1. 15,000 5,000

Unsolved Questions

1. Following is the Balance Sheet as at 31st March, 2018 of A, B and C carrying on business in partnership
sharing profits and losses in the ratio of 2 : 2 : 1:

Liabilities ` Assets `
Capital A/cs: Fixed Assets 10,50,000
A 6,00,000 Sundry Debtors 4,50,000
B 3,75,000 9,75,000 Stock 1,50,000
Mortgage Loan 6,00,000 Cash at Bank 75,000
Reserve 90,000 C’s Capital A/c 90,000
Sundry Creditors 1,50,000
18,15,000 18,15,000

They decided to dissolve the partnership and the following arrangements were agreed upon:
(i) Fixed assets included:
(a) Machinery ` 82,500 taken by B at an agreed value of ` 1,35,000 after the repairing costs
amounted to ` 30,000 to be borne by the firm.
(b) Land and Building ` 7,50,000 taken by A at an agreed value of ` 9,00,000 subject to the
mortgage loan to be taken over at ` 6,00,000.
(ii) Other assets (excluding Cash at Bank) and Creditors are taken over by Welfare Limited in
consideration of issue of 5,000 debentures of ` 150 each fully paid. These debentures are taken
over at a total agreed value of ` 7,20,000 equally by A and B.
(iii) Creditors for ` 37,500 not provided for in the books had to be paid.
Prepare Realisation Account, Partners’ Capital Accounts, Bank Account assuming that the final settle-
ment was made by the partners bringing in the amounts due from them.