Question

Ganesh and Kartik are partners sharing profits and losses equally. They decided to dissolve the firm on 31st March 2018. Their Balance Sheet was as under:

Balance Sheet as of 31st March 2018

Assets were realised as under:

Building ₹ 82,000, Debtors ₹ 22,000, Stock ₹ 20,000. Bills Receivable ₹ 3,200 and Ganesh agreed to take over Furniture for ₹ 10,000. Realisation Expenses amounted to ₹ 2,000. Show Realisation A/c, Partners’ Capital A/c, and Cash A/c.

Answer 1

In the books of Ganesh and Kartik

Realisation Account

Partner's Capital Accounts

Cash Account

Working Notes:

1. Amount paid to Ganesh and Kartik are ₹ 27,600 and ₹ 77,600 respectively.

2. Loss on Realisation and Reserve fund amounts are equally distributed.

3. Furniture is taken over by Ganesh so his Capital A/c is debited.