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Mujeeb Rahiman C
HSST Commerce
GHSS Pattikkad
Malappuram Dt.
✉️ mujeebchemmala@gmail.com
9995983075 �
Chapter - 4
Dissolution of Partnership Firm
Illustration - 2
Realisation A/c | Partners’ Capital A/c | Cash / Bank A/c
Sunil and Ravi were sharing profits in the ratio of 3:2, their Balance Sheet as on March 31, 2017 is as follows:
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Assets Amount
Bank 11,500
Stock 6,000
Debtors 19,000
Furniture 4,000
Plant 28,000
Investment 10,000
Profit & Loss A/c 7,500
86,000
Balance Sheet
The firm was dissolved on March 31, 2017 on the following terms:
1. Sunil agreed to take the investments at Rs. 8,000 and to pay Mrs. Sunil’s loan.
2. Other assets were realised : Stock Rs. 5,000, Debtors Rs. 18,500
Furniture Rs. 4,500, Plant Rs. 25,000
You are required to prepare Realisation A/c, Partner’s Capital A/c and Bank A/c.
3. Expenses on realisation amounted to Rs. 1,600.
4. Creditors agreed to accept Rs. 37,000 as a final settlement.
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Investment
10,000
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Assets Amount
Bank 11,500
Stock 6,000
Debtors 19,000
Furniture 4,000
Plant 28,000
Investment 10,000
Profit & Loss A/c 7,500
86,000
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Assets Amount
Bank 11,500
Profit & Loss A/c 7,500
86,000
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
1. Sunil agreed to take the investments at Rs. 8,000 and to pay Mrs. Sunil’s loan.
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
2. Other assets were realised : Stock Rs. 5,000, Debtors Rs. 18,500
Furniture Rs. 4,500, Plant Rs. 25,000
Bank A/c (sale of assets)
53,000
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
Bank A/c (sale of assets)
53,000
3. Expenses on realisation amounted to Rs. 1,600.
Bank A/c (Expenses)
1,600
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
Bank A/c (sale of assets)
53,000
Bank A/c (Expenses)
1,600
4. Creditors agreed to accept Rs. 37,000 as a final settlement.
Bank A/c (Creditors)
37,000
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
Bank A/c (sale of assets)
53,000
Bank A/c (Expenses)
1,600
Bank A/c (Creditors)
37,000
1,15,600
1,15,600
6,600
Loss on realisation transferred to capital accounts :
Sunil’s Capital A/c (3/5) 3,960
Ravi’s Capital A/c (2/5) 2,640
Sunil and Ravi were sharing profits in the ratio of 3:2
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Assets Amount
Bank 11,500
Stock 6,000
Debtors 19,000
Furniture 4,000
Plant 28,000
Investment 10,000
Profit & Loss A/c 7,500
86,000
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Assets Amount
Bank 11,500
Stock 6,000
Debtors 19,000
Furniture 4,000
Plant 28,000
Investment 10,000
Profit & Loss A/c 7,500
86,000
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
1. Sunil agreed to take the investments at
Rs. 8,000 and to pay Mrs. Sunil’s loan.
Realisation (Investment)
8,000
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Realisation (Mrs.Sunil’s Loan)
10,000
1. Sunil agreed to take the investments at
Rs. 8,000 and to pay Mrs. Sunil’s loan.
Realisation (Investment
8,000
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Realisation (Mrs.Sunil’s Loan)
10,000
Realisation (Investment)
8,000
6,600
Loss on realisation transferred to :
Sunil’s Capital A/c 3,960
Ravi’s Capital A/c 2,640
Realisation (Loss)
3,960
2,640
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Realisation (Mrs.Sunil’s Loan)
10,000
29,000
14,000
29,000
14,000
12,540
8,360
Bank A/c
(Final Payment)
31/03/18
Realisation (Investment)
8,000
Realisation (Loss)
3,960
2,640
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
BANK ACCOUNT
Date
Date
31/03/17
Assets Amount
Bank 11,500
Stock 6,000
Debtors 19,000
Furniture 4,000
Plant 28,000
Investment 10,000
Profit & Loss A/c 7,500
86,000
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
BANK ACCOUNT
Date
Date
31/03/17
31/03/18
Liabilities Amount
Creditors 38,000
Mrs. Sunil’s Loan 10,000
Reserve 15,000
Ravi’s Loan 5,000
Capitals :
Sunil 10,000
Ravi 8,000 18,000
86,000
Ravi’s Loan
5,000
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
Realisation A/c (Sale of Assets)
53,000
BANK ACCOUNT
Date
Date
31/03/17
2. Other assets were realised :
Stock Rs. 5,000, Debtors Rs. 18,500, Furniture Rs. 4,500, Plant Rs. 25,000
Total = 53,000
Ravi’s Loan
5,000
31/03/18
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
Realisation A/c (Sale of Assets)
53,000
BANK ACCOUNT
Date
Date
31/03/17
Realisation A/c (Expenses paid)
1,600
Realisation A/c (Creditors paid)
37,000
3. Expenses on realisation amounted to Rs. 1,600.
4. Creditors agreed to accept Rs. 37,000 as a final settlement.
Ravi’s Loan
5,000
31/03/18
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
Realisation A/c (Sale of Assets)
53,000
BANK ACCOUNT
Date
Date
31/03/17
Realisation A/c (Expenses paid)
1,600
Realisation A/c (Creditors paid)
37,000
Sunil’s Capital A/c
12,540
Ravi’s Capital A/c
8,360
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Realisation (Mrs.Sunil’s Loan)
10,000
29,000
14,000
29,000
14,000
12,540
8,360
Bank A/c
(Final Payment)
31/03/18
Realisation (Investment)
8,000
Realisation (Loss)
3,960
2,640
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Ravi’s Loan
5,000
31/03/18
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
Realisation A/c (Sale of Assets)
53,000
BANK ACCOUNT
Date
Date
31/03/17
Realisation A/c (Expenses paid)
1,600
Realisation A/c (Creditors paid)
37,000
Sunil’s Capital A/c
12,540
Ravi’s Capital A/c
8,360
64,500
64,500
Ravi’s Loan
5,000
31/03/18
Amount
Particulars
Amount
Particulars
Stock
6,000
Debtors
19,000
REALISATION ACCOUNT
Furniture
4,000
Plant
28,000
Creditors
38,000
Mrs. Sunil’s Loan
10,000
Investment
10,000
Sunil’s Capital A/c (Investment)
8,000
Sunil’s Capital A/c (Mrs. Sunil’s Loan)
10,000
Bank A/c (sale of assets)
53,000
Bank A/c (Expenses)
1,600
Bank A/c (Creditors)
37,000
1,15,600
1,15,600
6,600
Loss on realisation transferred to capital accounts :
Sunil’s Capital A/c (3/5) 3,960
Ravi’s Capital A/c (2/5) 2,640
Ravi
Particulars
Balance b/d
CAPITAL ACCOUNTS
Sunil
10,000
Date
31/03/17
Ravi
Particulars
Sunil
Date
8,000
Realisation (Mrs.Sunil’s Loan)
10,000
29,000
14,000
29,000
14,000
12,540
8,360
Bank A/c
(Final Payment)
31/03/18
Realisation (Investment)
8,000
Realisation (Loss)
3,960
2,640
Reserve (3:2)
9,000
6,000
Profit & Loss A/c (3:2)
4,500
3,000
Amount
Particulars
Amount
Particulars
Balance b/d
11,500
Realisation A/c (Sale of Assets)
53,000
BANK ACCOUNT
Date
Date
31/03/17
Realisation A/c (Expenses paid)
1,600
Realisation A/c (Creditors paid)
37,000
Sunil’s Capital A/c
12,540
Ravi’s Capital A/c
8,360
64,500
64,500
Ravi’s Loan
5,000
31/03/18
Distinction between Revaluation A/c and Realisation A/c
Revaluation A/c
Realisation A/c
1. Prepared at the time reconstitution of
partnership firm
2. Prepared to find out profit or loss
on revaluation assets and
reassessment of liabilities
1. Prepared at the time of dissolution
Partnership firm
2. Prepared to find profit or loss on
realisation of assets and payment of
liabilities
Mujeeb Rahiman C
HSST Commerce
GHSS Pattikkad
Malappuram Dt.
Mujeeb Rahiman C
HSST Commerce
GHSS Pattikkad
Malappuram Dt.