Pritam and Naresh decided to dissolve their firm on September 30, 2023, when their Balance Sheet stood as follows:
Pritam and Naresh decided to dissolve their firm on September 30, 2023, when their Balance Sheet stood as follows:
| Liabilities | ₹ | Assets | ₹ |
|
Capital Accounts: Pritam Naresh |
40,000 20,000 |
Cash at Bank | 400 |
|
Loan Accounts: Naresh Mrs. Pritam |
14,000 10,000 |
Stock-in-Trade | 21,500 |
| Sundry Creditors | 36,000 | Bills Receivable | 8,800 |
| Outstanding Rent | 500 | Sundry Debtors 45,000 Less: Provision for Bad Debts 1,500 | 43,500 |
| Â | Â | Furniture | 3,000 |
| Â | Â | Plant & Machinery | 23,000 |
| Â | Â | Goodwill | 20,000 |
| Â | Â | Prepaid Insurance | 300 |
| Â | 1,20,500 | Â | 1,20,500 |
The assets were realised as follows: Stock ₹ 20,000; Bills Receivable ₹ 3,800; Furniture ₹ 5,100; Plant & Machinery ₹ 35,000; Sundry Debtors at 10% less than book value.
Sundry Creditors allowed a discount of 5%. Pritam agreed to pay his wife’s loan. Naresh agreed to pay outstanding rent. Expenses on dissolution came to ₹ 800.
Pritam and Naresh shared profits and losses in the ratio of their capitals. Accounts were finally settled.
Prepare Journal Realisation Account, Capital Accounts and Bank Account.
[Ans. Loss on Realisation ₹ 14,700; Cash paid to Pritam ₹ 40,200 and Naresh ₹ 15,600; Total of Bank A/c ₹ 1,04,800.]
Anurag Pathak Answered question September 22, 2024
