A, B, C and D are partners of a firm. A gets one-fourth share in profits. The other partners shared the balance equally. The following is their Balance Sheet as on Mar 31, 20–.
|
Liabilities |
Rs |
Assets |
Rs |
|
Capital Account: Rs |
Plant and Machinery |
1,35,000 |
|
|
C 1,30,000 |
Furniture and Fixtures |
56,000 |
|
|
D 70,000 |
2,00,000 |
Sundry Debtors 1,00,000 |
|
|
General Reserves |
2,00,000 |
Less: Reserve for Doubtful |
|
|
Debts 3L700 |
68,300 |
||
|
Sundry Creditors |
80,000 |
Bills Receivable |
25,000 |
|
Trademarks |
14,000 |
||
|
Stock |
80,000 |
||
|
Capital Accounts: |
|||
|
A 60,000 |
|||
|
B 29.700 |
89,700 |
||
|
Cash in Hand |
12,000 |
||
|
4,80,000 |
4,80,000 |
The partnership was dissolved on the date of Balance Sheet on the following terms:
- On that day it was found that a liability for purchase of goods of Rs 40,000 had been omitted to be recorded and that the goods had been included in stock.
- The assets realised as Plant and Machinery Rs 1,20,000; Furniture and Fixtures Rs 36,000; Debtors Rs 42,000 and Stock Rs 60,000.
- The creditors including the unrecorded creditors were paid in full. There was a contingent liability in respect of bills discounted for Rs 7,000.
- During the year there were unrecorded assets purchased for Rs 20,000. 50% of the assets were handed over to the vendor of the asset (also unrecorded) in full settlement of his claim. The remaining 50% were sold for Rs 8,000.
- The realisation expenses amounted to Rs 7,700.
- B is insolvent and can contribute only Rs 4,700.
- The contingent liability did not materialise.
Prepare Realisation Account, Cash Account and partner’s Capital Accounts.