Rahul, Rohit and Ramesh were partners in a firm sharing profit and losses in the ratio of 2:2:1 respectively.

Question

(When one partner becomes insolvent)

Rahul, Rohit and Ramesh were partners in a firm sharing profit and losses in the ratio of 2:2:1 respectively. The Balance Sheet as on 31^st March, 2012 was as follows:

Balance Sheet as on 31^st December, 2011

The firm was dissolved on the above date:

1) The Assets realised as follows:

Debtors Rs 9,000, Plant and Machinery Rs 26,000, Stock Rs 14,000 and Furniture Rs 3,000.

2) The Creditors were paid Rs 18,000 in full settlement and the bills payable were paid in full.

3) The realisation expenses amounted to Rs 3,000.

4) Ramesh become insolvent and was able to bring in only Rs 1,800 from his private estate.

Prepare:

1) Realisation A/c

2) Bank A/c and

3) Partner’s Capital A/c

Answer 1

Realisation Account

Partners’ Capital Accounts

Bank Account

Rahul’s Loan Account

Working Notes:

Capital Deficiency of Ramesh	Rs.
Debit balance of Ramesh	7000
Less: General Reserve	1200
	5800
Less: Cash brought in by Ramesh	1800
Capital Deficiency	4000

Capital Deficiency of Rs 4,000 to be distributed between Rahul and Rohit (Solvent Partners) in the ratio 2:2.

Rahul's Share = 4000×2/4=2000

Rohit's Share = 4000×2/4=2000