Page 237 - VIRANSH COACHING CLASSES

(When one Partner become Insolvent)

Illustrations

1 Vidya, Sharmila and Megha are partners sharing Profit and Losses in the ratio 5:3:2.
Their Balance Sheet as on 31st March 2019 was as under.
Balance Sheet as on 31st March 2019.
Liabilities Amount ` Assets Amount `
Capital A/c Sundry Assets 1,28,000
Vidya 50,000 Bank 16,000
Sharmila 40,000 Current A/c : Megha 26,000

Megha 30,000
Current A/c : Vidya 6,000
: Sharmila 6,000
Sundry Creditors 28,000
Bill Payable 10,000

1,70,000 1,70,000

They decided to dissolve the partnership firm on the above date as under.
1. Sundry Assets realised at 80% of book value.
2. Unrecorded outstanding expenses ` 8,000 paid off.
3. Realisation expenses amounted to ` 6,000

4. Sundry Creditors and Bills Payable were paid for ` 34,000.
5. Megha become insolvent and ` 2,000 were recovered from her private estate.
Prepare Realisation Account, Partner’s Current Account, Partner’s Capital Account and
Bank A/c
Solution : In the books of Vidya, Sharmila and Megha
Dr. Realisation Account Cr.

Particulars Amount Amount Particulars Amount Amount
(`) (`) (`) (`)
To Sundry Assets A/c 1,28,000 By Sundry Liabilities A/c
Creditors 28,000
To Bank A/c : Bills Payable 10,000 38,000
Creditors and Bills payable 34,000 By Bank A/c 1,02,400
(Sundry Assets)
Outstanding Expenses 8,000 42,000 By Partners’ Current A/c :
To Bank A/c 6,000 (Loss on Realisation
(Realisation Expenses) transferred.)
Vidya 17,800
Sharmila 10,680
Megha 7,120 35,600

1,76,000 1,76,000

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