Question

Ashish and Kanav were Partners in a Firm, Sharing Profits and Losses in the Ratio of 3 : 2. Their Balance Sheet on 31^st March, 2018 was as follows:

Balance Sheet of Ashish and Kanav As at 31^st March, 2018

On the Above Date they Decided to Dissolve the Firm. 

(i) Ashish Agreed to take over Furniture at Rs 38,000 and Pay Off Mrs. Ashish’s Loan . 

(ii) Debtors Realized Rs 18,500 and Plant Realized 10 % More. 

(iii) Kanav took over 40 % of the Stock at 20 % Less than the Book Value. Remaining Stock was Sold at a Gain of 10 % . 

(iv) Trade Creditors took over Investments in Full Settlement . 

(v) Kanav Agreed to take over the Responsibility of Completing Dissolution at an Agreed Remuneration of Rs 12,000 and to Bear Realization Expenses . Actual Expenses of Realization Amounted to Rs 8,000.

Prepare Revaluation Account . 

Answer 1

In the books of Ashish & Kanav
Realisation Account

Particulars	Amount (Dr.)	Particulars	Amount (Cr.)
To Stock  To Debtors To Furniture To Plant To Investments To Ashish's Capital (Mrs. Ashish's Loan) To Kanav's Capital (Remuneration) To Bank (Employees Provident Fund) To Profit Ltd To:     Ashish's Capital                 12,012     Kanav's Capital                   8,008	24,000    19,000   40,000 2,10,000   32,000     9,000    12,000   60,000   20,020	By Trade Creditors By Employees Provident Fund By Mrs. Ashish's Loan By Investment Fluctuation Reserve By Ashish's Capital (Furniture) By Bank (Debtors) By Bank (Plant) By Kanav's Capital (40% of Stock) By Bank (60% Stock)	42,000   60,000     9,000     4,000   38,000    18,500 2,31,000      7,680    15,840
	4,26,020		4,26,020

Working Note:

(i) 20,020 x 3/5 = 12,012

(ii) 20,020 x 2/5 = 8,008

Note: As there is no Claim for Workmen Compensation, the Workmen Compensation Fund would be directly credited to the Partner's Capital Account.

Answer 2

Working Note :

Note: As there is No Workmen Compensation Contingency, so Workmen Compensation Reserve will be Credited to Partner’s Capital Account (In Profit Sharing Ratio) .

Comments

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