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X, Y and Z decided to dissolve partnership. The position as at 31st December, 2023, the date of dissolution was as follows:
Liabilities ₹ Assets ₹
Creditors 20,000 Freehold Property 40,000
Bank Loan 5,000 Machinery 40,000
Capitals: X Y Z 70,000 40,000 20,000 Investments 16,000
Current Accounts: X Y 12,000 7,500 Stock 30,000
Reserve for Contingency 10,000 Debtors 30,000
Commission Received in Advance 6,000 Cash 10,000
Loss in Business 20,000
Current Account: Z 4,500
1,90,500 1,90,500
  They shared profits in the ratio of X: 1/2, Y: 3/10 and Z: 1/5. X agreed to bear all realisation expenses. For this service X is paid ₹ 2,000. Actual expenses amounted to ₹ 3,200 which was withdrawn by him from the firm. Other information are: (1) Assets, with the exception of investments and Cash, are sold for ₹ 1,25,100. 75% of the investments are taken over by X at 75% of their book value. He also agrees to discharge the Bank Loan. The remaining investments were taken over by Y at the market value of 120%. (2) There were outstanding expenses amounting to ₹ 5,000. These were settled for ₹ 2,000. (3) A B/R for ₹ 10,000 was received from a customer Mr. Surender Kumar and the bill was discounted from the bank. Surender became insolvent and 75 paise per ₹ were received from his estate. (4) Commission received in advance was returned to the customers after deducting 60% for work done. You are required to prepare the necessary accounts. [Ans. Loss on Realisation ₹ 20,000; Final Payment to X ₹ 61,800; Y ₹ 33,700 and Z ₹ 9,500; Total of Cash A/c ₹ 1,42,600.]
Anurag Pathak Answered question 5 days ago
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