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9. PARTNERSHIP ACCOUNTS - II
SOLUTIONS TO ASSIGNMENT PROBLEMS
PROBLEM NO. 1
Dr.
Realisation Account
Particulars
To Debtors A/c
To Stock A/c
To Fixtures A/c
Amount
48,000
60,000
24,000
1,08,000
45,600
4,200
1,500
Cr.
Particulars
By Creditors A/c
Amount
48,000
2,48,400
4,800
P 3960
Q 3960
R 1980
9900
3,01,200
Dr.
3,01,200
Particulars
To Realization A/c
To Cash A/c (b/f)
P
1,47,960
Q
4,800
71,160
37,980
1,47,960
75,960
37,980
Dr.
Particulars
By Balance b/d
By Reserve fund
By Realization A/c
(Profit)
Cr.
P
1,20,000
24,000
3,960
Q
48,000
24,000
3,960
R
24,000
12,000
1,980
1,47,960
75,960
37,980
Cash Account
Particulars
To Balance b/d
To Realisation A/c
Amount
60,000
2,48,400
3,08,400
Cr.
Particulars
By Realization A/c (Creditors)
By Realization A/c (Expenses)
Amount
45,600
1,500
4,200
1,47,960
71,160
37,980
3,08,400
Note: Unrecorded asset is a gain and credited to realization A/c. since it is taken over by Q, his capital
A/c is debited.
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PROBLEM NO. 2
Realization A/c
Amount
Particulars
60,000 By Creditors A/c
10,000 By Bank O.D (W.N-2)
40,000 By X Loan A/c
45,000 By Ds A/c (P.C)
60,000
2,800
Particulars
To Plant and Machinery
To Furniture
To motor cars A/c
To Stock
To Sundry Debtors
To Xs Capital A/c
(cost of dissolution)
To profit on Realisation: (3:2:1)
X capital A/c 34,950 x 3/6
Y capital A/c 34,950 x 2/6
Z capital A/c 34,000 x 1/6
Dr.
Dr.
Particulars
To Bal. b/d
To Cash A/c (b/f)
17,475
11,650
5,825
2,52,750
X
59,100
Y
37,733
59100
37733
Dr.
Particulars
To Realization
2,52,750
Cash A/c
Amount
Particulars
90,000
By Xs Capital A/c
6,833
By Ys Capital A/c
96,833
Particulars
To Ds A/c
To Zs Capital A/c
Cr.
Amount
70,000
70,200
22,550
90,000
Capital A/c
Z
Particulars
12,658 By Balance b/d
By Realization A/c
By Realization A/c
By Cash A/c (b/f)
12658
Cr.
Amount
59,100
37,733
96,833
X
38,825
2,800
17,475
59100
Ds A/c
Amount
Particulars
90,000 By Cash A/c
90,000
Y
26,083
11,650
37733
Cr.
Z
5,825
6,833
12658
Cr.
Amount
90,000
90.000
WORKING NOTE:
Dr.
Trading and Profit & Loss of M/s X, Y, Z for the period ended 31.03.2003
Cr.
Particulars
Amount
Particulars
Amount
To Opening stock
55,000 By Sales
45,000
To Purchases
30,000 By Closing Stock
45,000
To gross profit c/d
5,000
90,000
90,000
To Salaries & Wages
To General & Office expenses
To Interest on Xs loan
(22,000x10%x3/12)
12,000
6,000
550
1,98,550
5,000
6,775
4,517
2,258
1,98,550
MASTER MINDS
Amount
Assets
Amount
Xs Capital
48,000
60,000
(-) Drawings
(2,400)
10,000
(-) Loss
(6,775)
Motor car
40,000
Ys Capital
33,000
Stock
45,000
(-) Drawings
(2,400)
60,000
(4,517)
38,825
26,083
-
Loan A/c X
22,000
(+) Interest
550
Zs Capital A/c
8,000
(+) Drawings
2,400
2,258
12,658
22,550
Trade creditors
70,000
Bank Overdraft
70,200
2,27,658
2,27,658
Working Note - 1
Dr.
Creditors A/c
Particulars
Amount
Cr.
Particulars
Amount
40,000
By Balance b/d
80,000
To Balance c/d
70,000
By Purchases
30,000
1,10,000
1,10,000
Working Note 2
Dr.
Bank A/c
Particulars
Amount
Cr.
Particulars
Amount
To Debtors
25,000
By Balance b/d
30,000
To Balance c/d
70,200
12,000
6,000
7,200
By Creditors A/c
95,200
40,000
95,200
By Balanced b/d
70,200
Working Note - 3
Dr.
Debtors A/c
Particulars
To Balance b/d
To Sales
Amount
Cr.
Particulars
40,000
45,000
By Balance c/d
85,000
Amount
25,000
60,000
85,000
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PROBLEM NO. 3
Dr.
Realisation Account
Particulars
To Sundry Assets:
Debtors
15,850
Stock
25,200
Prepaid Expenses
800
Plant & Machinery
20,000
Patents
8,000
To Bank Creditors:
(`15,700 - `3,200 - `400)
To Bank A/c Employees (P.F)
Amount
Particulars
By Creditors
By Employees Provident Fund
By Bank A/c:
Joint Life Policy
4,500
Debtors
10,800
Stock
15,600
Plant and Machinery
12,000
69,850
12,100
6,300
Cr.
Amount
15,700
6,300
Patents
60% of (`8,000 - `5,000) 1,800
By Loss on realisation A/c (4:3:2:1)
As Capital A/c
9,220
Bs Capital A/c
6,915
Cs Capital A/c
4,610
Ds Capital A/c
2,305
1,500
44,700
23,050
89,750
89,750
Dr.
Capital Accounts
Particulars
A (`)
To Balance b/d
To Realisation A/c
To Ds Capital
(Deficiency)
To Bank
B (`)
C(`)
D (`)
Cr.
Particulars
A (`)
B (`)
C(`)
3,200
9,220
6,915
4,610
2,305
5,360
2,680
By Bank
(Realisation loss)
By Bank (Recovery)
(10,720X0.25)
2,680
34,640
17,320
- By As Capital 2/3
5,360
By Bs Capital 1/3
2,680
By Bank A/c
- 3,200
49,220
26,915
Dr.
7,810
40,000 20,000
D (`)
10,720
9,220
49,220
Bank Account
6,915 4,610
26,915
7,810
10,720
Cr.
`
535
By Realisation A/c
`
12,100
To Realisation A/c
44,700
By Realisation A/c
6,300
To As Capital A/c
9,220
By Realisation A/c
1,500
To Bs Capital A/c
6,915
By As Capital A/c
34,640
2,680
By Bs Capital A/c
17,320
7,810
Particulars
To Balance b/d
71,860
Particulars
71,860
Working Note: Insolvent partners loss should be borne by solvent partners having credit balance. So,
here Ds loss will be borne by A and B only as they are the solvent partners having credit balance. C will
bring his share of loss in cash.
MASTER MINDS
Dr.
Realization Account
Particulars
Amount
To Land
To Buildings
To Office Equipments
To Computers
To Debtors
To Stock
To Other Asset A/c
To Bank A/c (Loan) (5,00,000 X 101%)
To Bank A/c
To profit on realisation: (4:4:1:1)
F Kapil
9,600
S Kapil
9,600
R Dev
2,400
B Dev
2,400
Dr.
Particulars
50,000
2,50,000
1,25,000
70,000
4,00,000
3,00,000
22,600
5,05,000
70,000
Cr.
Particulars
Amount
5,00,000
70,000
1,00,000
3,00,000
49,000
3,80,000
2,70,000
1,25,000
22,600
24,000
18,16,600
18,16,600
SK
RD
BD
Particulars
FK
To Current A/c
- 87,400 By Balance b/d
By Current A/c
To BD A/c
42,500
17,000
17,000
8,500
- By Realization A/c
To BD A/c
(2:2:1)
2,42,600 3,42,600 1,61,400
- By RD A/c
By FK A/c
To Bank A/c
By SK A/c
By RD A/c
2,59,600 3,59,600 2,12,400 87,400
Dr.
Cr.
SK
RD
BD
2,400
42,500
17,000
17,000
8,500
87,400
Bank Account
Particulars
To Balance b/d
To Realization A/c
Amount
75,000
12,46,600
Cr.
Particulars
By Realization A/c (Loan)
By Realization A/c
By RD capital A/c
By FK capital A/c
By SK capital A/c
13,21,600
Amount
5,05,000
70,000
1,61,400
2,42,600
3,42,600
13,21,600
PROBLEM NO. 5
Dr.
Realization Account
Particulars
To Debtors
To Stock
To Machinery
To Land and Buildings
To Bank
Amount
96,060
64,000
28,600
84,000
1,02,400
3,75,060
Cr.
Particulars
By Creditors
By Bank
By loss on realisation: (b/f)
As Capital
15,260
Bs Capital
15,260
Cs Capital
15,260
Amount
1,02,400
2,26,880
45,780
3,75,060
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Dr.
Cr.
Particulars
Particulars
To Current A/c of C
To Realization A/c
To Cs Capital A/c(3:2)
To Bank A/c (b/f)
15,260
3,120
1,08,080
15,260
2,080
52,420
9,940
15,260
-
By Bal. (b/d)
By Current A/c
By Loan from
Partners
By Bank A/c
By As Capital
By Bs Capital
1,26,460
69,760
25,200
Dr.
60,000
21,200
40,000
2,500
20,000
-
30,000
15,260
1,26,460
12,000
15,260
69,760
3,120
2,080
25,200
Bank Account
Particulars
Cr.
Amount
To Balance (b/d)
To Realization A/c
To As Capital A/c
To Bs Capital A/c
Particulars
5,500
2,26,880
15,260
15,260
2,62,900
Amount
By Realization A/c
By As Capital A/c
By Bs Capital A/c
1,02,400
1,08,080
52,420
2,62,900
Amount
Available
Creditors
st
Balance due 1
Instalment (including
cash and bank
balances)
Less: Liquidators
Expenses and fee
Bank
Loan
Capital A/cs
Ls Loan
2,00,000
5,00,000
10,00,000
15,00,000
10,00,000
5,00,000
(4,00,000)
(1,14,286)
(2,85,714)
85,714
2,14,286
10,00,000
15,00,000
10,00,000
5,00,000
10,00,000
15,00,000
10,00,000
5,00,000
(10,00,000)
2,00,000
15,00,000
10,00,000
5,00,000
(2,00,000)
(2,00,000)
13,00,000
10,00,000
5,00,000
5,00,000
(1,00,000)
4,00,000
Less: Payment of
Creditors and
repayment of Bank
Loan in the ratio of 2:5
Balance Due
2nd Instalment
15,00,000
Less: Payment to
Creditors and
repayment of bank
loan in full settlement
(3,00,000)
(85,714)
(2,14,286)
12,00,000
Less: Repayment of
Ls Loan
Less: Payment to Mr.
L towards relative
higher capital (W.N.1)
Balance Due
(10,00,000)
MASTER MINDS
15,00,000
(3,00,000)
(3,00,000)
12,00,000
10,00,000
(10,00,000)
(5,00,000)
(5,00,000)
2,00,000
5,00,000
5,00,000
(2,00,000)
(66,667)
(66,667)
(66,666)
4,33,333
4,33,333
4,33,334
(10,00,000)
(10,00,000)
(10,00,000)
5,66,667
5,66,667
5,66,666
10,00,000
10,00,000
10,00,000
15,66,667
15,66,667
15,66,666
Balance Due
4th Instalment
Less: Payment to all
the partners equally
30,00,000
(30,00,000)
Realisation profit
credited to Partners
5th Instalment
Less: Payment to all
partners equally
30,00,000
(30,00,000)
Realisation profit
credited to partners
Working Notes:
(i)
Capital A/cs
M`
L`
Balance (i)
S`
15,00,000
10,00,000
5,00,000
5,00,000
5,00,000
5,00,000
10,00,000
5,00,000
5,00,000
5,00,000
5,00,000
So, Mr. L should get `5,00,000 first which will bring down his capital account balance from
`15,00,000 to `10,00,000. Accordingly, surplus amounting to `2,00,000 will be paid to Mr. L towards
higher relative capital.
(ii)
rd
Payment of `3,00,000 will be made to Mr. L to discharge higher relative capital. This makes the
higher capital of both Mr. L and Mr. M `5,00,000 as compared to capital of Mr. S.
Payment of `5,00,000 each of Mr. L & Mr. M to discharge the higher capital.
Balance `2,00,000 equally to L, M and S, i.e., `66,667 `66,667 and `66,666 respectively.
Assumption: We are assuming that first realisation amount includes opening cash & bank balance
of Rs. 2,00,000/-.
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To
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Problem No. 7
Statement showing Realisation and Distribution of Cash Payments (Maximum Loss Method)
1,000
Partners
Loan
`
-
Partners
Capital
`
-
3,000
1,000
2,000
3.
3,900
3,000
900
4.
6,000
6,000
20,100
20,100
34,000
2,000
5,000
27,000
Realisation
`
Creditors
`
1,000
2.
Particulars
To ascertain the amount distributable out of each instalment realised among the partners, the following
table will be constructed:
Statement of Distribution on Capital Account
(1) Calculation to determine the mode of distribution of `900
Particulars
Balance
Total
`
B
`
C
`
42,000
15,000
18,000
9,000
(41,100)
(16,440)
(16,440)
(8,220)
+900
-1,440
+1,560
+780
(960)
(480)
+600
+300
41,100
15,000
17,400
8,700
(35,100)
(14,040)
(14,040)
(7,020)
6,000
960
3,360
1,680
35,100
14,040
14,040
7,020
(15,000)
(6,000)
(6,000)
(3,000)
20,100
8,040
8,040
4,020
Balance capital
42,000
15,000
18,000
9,000
27,000
9,000
12,000
6,000
Loss
15,000
6,000
6,000
3,000
MASTER MINDS
PROBLEM NO. 8
Calculation of Purchase Consideration:
Particulars
A & CO.
Assets:
Goodwill
Land & Buildings
Fixture
Debtors
Stock
Cash in hand
1,10,000
88,000
4,10,300
11,000
1,40,800
2,37,600
5,06,000
2,47,500
1,100
11,79,200
5,73,100
(3,38,800)
(57,200)
(15,840)
(10,560)
(1,96,900)
67,760
5,51,540
6,27,660
5,05,340
11,33,000
Total (A)
(-) Creditors
(-) Loans
(-) Bank OD
Total (B)
Purchase consideration (A - B)
Total Purchase consideration
Dr.
B & CO.
Realization A/c
Particulars
Cr.
Amount
Particulars
4,10,300
11,000
3,78,400
7,53,500
1,100
Amount
By Creditors
By Loans
By Bank OD
By Purchasing Company
3,96,000
26,400
1,96,900
11,33,000
1,98,000
17,52,300
Dr.
17,52,300
Cr.
Particulars
Particulars
5,22,500
1,55,100
6,77,600
1,05,160
3,50,240
4,55,400
By Balance b/d
By Realization A/c
5,78,600
99,000
6,77,600
3,56,400
99,000
4,55,400
A
6,77,600
(5,22,500)
1,55,100 (b/f)
B
4,55,400
1,05,160 (b/f)
(3,50,240)
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2.
Note No
Amount
6,65,500
2,20,000
3,38,800
12,24,300
4,21,300
1,10,000
14,300
9
Total
= 6,49,660
15,840
6,65,500
= 2,20,000
3. Trade payables
= 3,38,800
5. Tangible Assets
Land & Buildings
Plant & Machinery
9. Cash and Cash equivalents
Opening Balance
Add: Cash received for shares
Add: Loan mortgage
Less: Bank OD
Less: Formation Exp.
5,06,000
1,40,800
31,900
12,24,300
= 4,10,300
=
11,000
4,21,300
1,100
22,000
2,20,000
(1,96,900)
(14,300)
31,900
To
MASTER MINDS
PROBLEM NO. 9
Dr.
Particulars
To Balance at Bank
Cr.
Amount
64,000
To Investments
15,000
3,16,600
To Debtors
71,000
To Stock
59,000
To Vehicles
25,000
To Freeholds
75,000
To Fixtures
18,000
12,000
87,600
3,92,600
Dr.
Particulars
To Realization
To Mints & Co. A/c(b/f)
Black
Particulars
Black
Cr.
Green
By Balance b/d
1,20,000
1,05,000
1,64,720
1,51,880
By Current A/c
10,000
6,000
By Realization
46,720
40,880
1,76,720
1,51,880
Dr.
Particulars
To Realization A/c
1,51,880
Tints & Co. A/c
Amount
Particulars
3,16,600 By Blacks Capital
By Greens Capital
3.16,600
Cr.
Amount
1,64,720
1,51,880
3,16,600
Dr.
To
To
To
To
Capital A/c
Green
12,000
1,76,720
To
3,92,600
Particulars
Balance at bank
(1,00,000+31,000)
Debtors
Stock
Vehicles
Freeholds
Amount
1,31,000
65,000
67,000
17,000
50,000
Cr.
Particulars
By Creditors A/c
Amount
56,000
3, 30,000
Dr.
2,63,400
10,600
3, 30,000
Capital A/c
Particulars
To Realisation A/c
Brown
6,360
Grey
4,240
Particulars
By Balance b/d
1,55,240
1,08,160
By profit on sale
of fixtures (3:2)
Cr.
Brown
1,10,000
Grey
78,000
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(1,00,000-14,000)
1,61,600
Working Note - 1
Dr.
Particulars
To Realization
1,12,400
51,600
34,400
1,61,600
1,12,400
Cr.
Amount
1,55,240
By Greys capital
1,08,160
2,63,400
2,63,400
Amount
Assets
Amount
Capital A/cs:
Balance at bank
Black 1,50,000
Green 1,25,000
1,27,000
1,19,000
Brown 1,25,000
93,000
Grey 1,00,000
5,00,000
38,000
Creditors
1,17,000
Freeholds
95,000
1,25,000
Fixtures
20,000
6,17,000
Dr.
Capital A/c
Particulars
Black
To Cash
14,720
26,880
30,240
8,160
1,50,000
1,25,000
1,25,000
1,00,000
1,64,720
1,51,880
1,55,240
1,08,160
To Bal. c/d
5L(6:5:5:4)
6,17,000
Green
Brown
Grey
Particulars
By Sundry
Assets
By Bal. b/d
Cr.
Black
Green
Brown
Grey
1,64,720
1,51,880
1,55,240
1,08,160
1,64,720
1,51,880
1,55,240
1,08,160
1,50,000
1,25,000
1,25,000
1,00,000
Working Note: 1
Computation of Purchase consideration:
Particulars
Bank
Investments
Debtors
Stocks
Vehicles
Fixtures
Freeholds
Goodwill
(-) Provisions for doubtful debts
(-) Creditors (after discount)
P.C
MASTER MINDS
PROBLEM NO. 10
In the books of M/s XYZ & C
Journal Entries
Particulars
Debit
Buildings A/c
Machinery A/c
Furniture A/c
Debtors A/c
Cash at Bank A/c
Cash in hand A/c
Stock A/c
Due from Y Co. A/c
Advances A/c
Goodwill A/c
To Creditors A/c
To Due to X & CO
To Bank loan A/c
To Xs capital A/c
To Ys capital A/c
To Zs capital A/c
(Being incorporation of assets & liabilities of Mrs. R & CO and
Mrs. Y & CO at agreed values)
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
Dr.
X Capital A/c
Y Capital A/c
Z Capital A/c
To Goodwill A/c
(Being goodwill written off)
Dr.
Dr.
Dr.
Dr.
Cash A/c
To Xs capital A/c
To Zs capital A/c
(Being necessary cash bought in by X & Z)
Dr.
Ys capital A/c
To Cash A/c
(Being excess balance paid to Y)
Dr.
Liabilities
Capitals A/cs:
X
Y
Z
Creditors
Bank Loan
Credit
2,00,000
8,50,000
52,000
7,20,000
2,40,000
60,000
5,20,000
2,00,000
1,20,000
1,82,000
4,72,000
2,00,000
1,60,000
8,17,500
11,40,500
3,54,000
91,000
60,667
30,333
1,82,000
2,00,000
2,00,000
3,69833
3,38,500
31,333
3,69,833
3,69,833
Amount
2,00,000
8,50,000
52,00
5,20,000
7,20,000
2,40,000
60,000
1,20,000
27,62,500
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Working Notes: 1
Computation of capital contributions X, Y, Z in the forms of X & Co and Y & Co.
X & CO(3:1)
Particulars
Y & CO (2:1)
Y
4,80,000
75,000
2,62,500
3,20,000
25,000
87,500
4,00,000
2,00,000
1,08,000
2,00,000
1,00,000
54,000
8,17,500
4,32,500
7,08,000
3,54,000
11,40,500
Working Notes: 2 - profit on Realisation
Particulars
X & Co.
Y & Co.
1,00,000
1,50,000
1,00,000
3,50,000
2,62,500
87,500
-
1,08,000
54.000
80,000
82,000
1,62,000
Working Notes: 3
Adjustments of Capital:
Particulars
8,17,500
(91,000)
11,40,500
(60,667)
3,54,000
(30,333)
7,26,500
10,79,833
3,23,667
21,30,000
(X) 3/6
(Y) 2/6
(Z) 1/6
10,65,000
7,26,500
7,10,000
10,79,833
3,55,000
3,23,667
3,38,500
(3,69,833)
31,333
Dr.
Realisation Account
Particulars
To
To
To
To
To
To
To
Amount
( `)
2,46,000
65,000
1,00,000
72,500
7,800
54,000
1,10,000
Cr.
Particulars
By Sundry creditors
By Mortgage loan
By Cash account
By Land and building
By Furniture & fixtures
By Stock
By Debtors
Amount
( `)
36,000
1,10,000
2,30,000
42,000
72,000
65,000
MASTER MINDS
By Partners capital
A/c (Loss 4:3:2:1)
P = 40,120
Q = 30,090
R = 20,060
S = 10,030
1,00,300
6,55,300
6,55,300
Dr.
25,000
18,000
By Balance b/d
To Balance b/d
Cr.
P
Particulars
1,68,000
1,08,000
`
-
38,000
28,500
19,000
9,500
To Realization
A/c (Loss)
40,120
30,090
20,060
10,030
By General
Reserve
To Rs Capital
A/c (Deficiency)
12,636
8,424
By Capital
Reserve
10,000
7,500
5,000
2,500
2,03,364
1,35,576
By Cash A/c
(realization
loss)
40,120
30,090
10,030
By Ps Capital
A/c
12,636
By Qs Capital
A/c
8,424
By Cash A/c
(b/f)
6,000
2,56,120
1,74,090
45,060
28,030
2,56,120
Note:
1,74,090
45,060
28,030
P, Q and S brought cash to make good, their share of the loss on realization. However, in
actual practice they will not be bringing any cash, only a notional entry will be made.
Dr.
Cash Account
Amount
( `)
Particulars
To Balance b/d
15,500
To Realization A/c:
Cr.
Amount
( `)
Particulars
By Realization A/c:
Expenses on dissolution
2,30,000
7,800
54,000
42,000
Mortgage loan
1,10,000
Stock
72,000
By Ps capital A/c
2,03,364
Debtors
65,000
By Qs capital A/c
1,35,576
To P, Q, Ss capital A/cs
(40,120 + 30,090 + 10,030)
To Ss Capital A/c
80,240
6,000
5,10,740
5,10,740
Working Note: As per Garner Vs. Murray rule, solvent partners have to bear the loss due to insolvency
of a partner in their capital ratio.
Calculation of Capital Ratio of Solvent Partners
Particulars
Opening capital
Add: General reserve
Capital reserve
P ( `)
1,68,000
38,000
Q ( `)
1,08,000
28,500
S ( `)
(18,000)
9,500
10,000
2,16,000
7,500
1,44,000
2,500
(6,000)
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Though S is a solvent partner yet he cannot be called upon to bear loss on account of insolvency of R
because his capital account has a debit balance.
Therefore, capital ratio of P & Q = 216 : 144 = 3:2
Deficiency of R = `{(25,000 + 20,060) 19,000 + 5,000)} = `45,060 - `24,000 = `21,060.
Deficiency of R will be shared by P & Q in the capital ratio of 3 : 2 i.e.
P = ` 21,060 x 3/5 = `12,636
Q = `21,060 x 2/5 = ` 8,424
PROBLEM NO. 12
Journal entries in the books of firm
Particulars
a.
b.
c.
d.
e.
f.
g.
Dr.
Dr.
Rs Capital A/c
To Book Debts A/c
Dr.
Debit
3,600
1,250
Dr.
Rs Capital A/c
To Profit & Loss Adjustment A/c (Salary Refund)
Dr.
3,000
3,000
3,000
3,000
3,000
9,000
5,000
4,000
Cash A/c
To Investments A/c
Dr.
Investments A/c
To Ps Capital A/c
To Qs Capital A/c
Dr.
To Partners Capital:
P 300
Q 300
R 300
2,250
3,000
Dr.
To Stock
To Investment
To Book Debts
250
250
Rs Capital A/c
To Vehicles A/c
Particulars
4,850
2,250
Unrecorded assets:
Vehicles A/c
To Profit & Loss Adjustment A/c
Dr.
Credit
12,000
12,000
750
375
375
900
6,000
Cr.
Amount
3,000
3,000
6,000
MASTER MINDS
To Book Debts
To Vehicles
To P & L Adj. A/c
To P & Q Capital
To Cash
To Balance c/d
R
2,250
3,000
3,000
9,000
14,750
61,250
50,250
61,250
50,250
Cr.
Particulars
By Balance b/d
By P & L A/c
By R Capital
By investment
(12,000-11,500)
By Cash (3,500+375)
By P & L A/c
32,000
Capital A/cs:
P
61,250
Q
50,250
Creditors
Staff security Deposit
Staff provident fund
1,11,500
7,000
8,000
7,900
30,000
1,700
50,000
1,700
5,000
40,000
1,700
4,000
375
3,875
300
375
3,875
300
300
61,250
50,250
32,000
Liabilities
Amount
Cash
[2000 + 12,000 + 7,750 14,250]
Stock [18,000 3,600]
Book debt [7500 250 2,250]
Factory Sec P
Factory Sec Q
Vehicles
FDR of staff security
7,000
14,400
5,000
32,000
40,000
28,000
8,000
1,34,400
1,34,400
Working note:
Computation of amount brought in by P & Q:
Amount payable to R
= 14,750
(+) Minimum cash balance
= 7,000
21,750
(-) Available cash (2000 + 12,000)
(14,000)
7,750
Balance Sheet of P & Q Ltd as on 01.01.2014
Particulars
Note No
2,00,000
15,900
7,000
2,22,900
Total
ASSETS:
Non-Current Assets:
Fixed Assets
Tangible Assets
Non-current investments
Other non-current investment [F.D.R]
Current Assets:
Amount
1,25,000
8,000
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Inventory
Trade receivables [Debtors]
Cash & Cash equivalents
Other current assets
14,400
5,000
63,500
7,000
2,22,900
Ph:
3
4
Total
Notes to accounts:
Particulars
1. Share capital
Equity share capital
issued and subscribed & paid up
20,000 equity shares of Rs. 10 each fully paid
(Out of the above 11,500 shares issued to P&Q ,
3,000 shares are issued to R&S for consideration other
than cash.)
2. Tangible assets
Factory
32,000
Plant & Machinery (WN: 2)
65,000
Vehicles
28,000
3. cash & cash Equivalents
Opening balance(WN:1)
7,000
Equity Share Capital
58,500
Less: dismantling charges
(2,000)
4. other Current Assets:
Loss on sale of factor
5,000
Dismantling charges
2,000
2,00,000
1,25,000
63,500
7,000
Working note: 1
Dr.
Particulars
To Balance c/d.
To Investments A/c
To Ps capital A/c
To Qs Capital A/c
Cash A/c.
Amount (`)
2,000
12,000
3,875
3,875
7,750
21,750
Cr.
Particulars
By R Capital A/c
Amount(`)
14,750
By Balance C/d
7,000
21,750
Working note: 2
Dr.
Particulars
To Balance c/d.
To cash A/c
To cash A/c
Cr.
Particulars
By loss on sale
Amount(`)
7,000
By Balance C/d
THE END
65,000
72,000
To