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M.268 An Aid to Accountancy—CBSE XII

Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 73,500 By Realisation A/c 88,000
To Realisation A/c: By A’s Capital A/c 1,000
Debtors 18,800 By A’s Capital A/c 31,440
Fixed Assets 64,000 82,800 By B’s Capital A/c 35,860
1,56,300 1,56,300
Working Notes:
1. A’s Share in Profit is 4/5 and Share in General Reserve = ` 8,000
So, Total amount of General Reserve = ` 8,000 × 5/4 = ` 10,000
B’s Share in General Reserve = ` 10,000 × 1/5 = ` 2,000.
2. B’s Share in Profit is 1/5 and his share in Advertisement Suspense A/c (Loss) = ` 100
So, Total Advertisement Suspense A/c (Loss) = ` 100 × 5 = ` 500
A’s Share in Advertisement Suspense A/c (Loss) = ` 500 × 4/5 = ` 400.
3. Amount realised from Assets = ` 18,800 + ` 64,000 = ` 82,800.
Or
Dr. REALISATION ACCOUNT Cr.
Particulars ` Particulars `
To Debtors A/c 17,000 By Sundry Creditors A/c 8,000
To Stock A/c 15,000 By Bank Overdraft A/c 6,000
To Investments A/c 25,000 By X’s Brother’s Loan A/c 8,000
To Building A/c 25,000 By Provision for Doubtful Debts A/c 2,000
To Goodwill A/c 10,000 By Investment Fluctuation Reserve A/c 5,000
To X’s Capital A/c (Brother’s Loan) 8,000 By Bank A/c (Assets Realised):
To Bank A/c: Debtors (` 17,000 – ` 5,000) 12,000
Creditors (` 8,000 – ` 2,000) 6,000 Investments (80% of ` 25,000) 20,000
Bank Overdraft 6,000 12,000 Goodwill (60% of ` 10,000) 6,000
To Bank A/c (Realisation expenses) 2,000 Building (` 30,000 – ` 1,000)* 29,000
Stock (WN 2) 5,000 72,000
By Y’s Capital A/c (WN 1) 4,000
By Loss transferred to:
X’s Capital A/c 7,200
Y’s Capital A/c 1,800 9,000
1,14,000 1,14,000

*Alternatively, ` 30,000 may be shown as realised for building and ` 1,000 (commission) as expense.

Dr. PARTNERS’ CAPITAL ACCOUNTS Cr.
Particulars X (`) Y (`) Particulars X (`) Y (`)
To Profit and Loss A/c 8,000 2,000 By Balance b/d 50,000 40,000
To Realisation A/c (Stock) ... 4,000 By Realisation A/c (Brother’s loan) 8,000 ...
To Realisation A/c (Loss) 7,200 1,800
To Bank A/c (Final payment) 42,800 32,200
58,000 40,000 58,000 40,000