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M.56 An Aid to Accountancy—CBSE XII
Or
Lily and Rose shared profits in the ratio of 3 : 2. Their Balance Sheet as on 31st March,
2019 was as follows:
Liabilities ` Assets `

Creditors 40,000 Bank 16,000
Lily’s Loan 32,000 Debtors 80,000
Profit and Loss Account 50,000 Less: Provision for Doubtful Debts 3,600 76,400
Capital A/cs: Inventory 1,09,600
Lily 1,60,000 Bills Receivable 40,000
Rose 2,40,000 4,00,000 Building 2,80,000
5,22,000 5,22,000
They decided to dissolve the firm on the above date. Assets (except bills receivable)
realised ` 4,84,000. Creditors agreed to take ` 38,000. Expenses on realisation were
` 2,400. There was a Motor Cycle in the firm not shown in the books of the firm. It was
sold for ` 10,000. There was a contingent liability in respect of outstanding electricity
bill of ` 5,000. Bills Receivable were taken by Rose at ` 33,000.
Show Realisation Account, Partners’ Capital Accounts, and Bank Account. (6)
15. X, Y and Z are partners in a firm sharing profits and losses equally. Their Balance
Sheet as at 31st March, 2018, was as under:

BALANCE SHEET
as at 31st March, 2018
Liabilities ` Assets `
Creditors 1,40,000 Building 2,00,000
General Reserve 60,000 Machinery 1,00,000
Capital A/cs: Patents and Copyrights 1,50,000
X 2,50,000 Stock 1,25,000
Y 2,00,000 Debtors 1,50,000
Z 1,50,000 6,00,000 Bank 75,000
8,00,000 8,00,000

From 1st April, 2018, the partners decided to share profits and losses in the ratio of
3 : 2 : 1 and for that purpose following revised values of assets were agreed upon:
Building ` 2,75,000; Machinery ` 90,000; Patents and Copyrights ` 1,32,500; Stock
` 2,00,000; Prepaid Insurance ` 5,000; and Debtors ` 1,42,500.
Goodwill of the firm was valued at ` 60,000.
Partners decide not to disturb the General Reserve. Also, they decide not to record the
revised values of assets in the books of account.
You are required to:
(i) Record the necessary Journal entries giving effect to the above agreement.
(ii) Prepare Capital Accounts of the partners; and
(iii) Prepare Balance Sheet of the firm after reconstitution. (6)