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Question -

Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows:

Balance Sheet of Rose and Lily as on March 31, 2017

 

Liabilities

Amount

₹

Assets

Amount

 ₹

Creditors

40,000

Cash

16,000

Lily’s loan

32,000

Debtors

80,000

Profit and Loss

50,000

Less: Provision for doubtful Debts

3,600

76,400

Capitals:

Lily

1,60,000

Inventory

1,09,600

Rose

2,40,000

Bills Receivable

40,000

Buildings

2,80,000

 

5,22,000

5,22,000

 

 

 

 

 
Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised ₹ 4, 84,000.  Creditors agreed to take ₹ 38,000. Cost of Realisation was ₹ 2,400. There was a Motor Cycle in the firm which was bought out of the firm’s money, was not shown in the books of the firm. It was now sold for ₹ 10,000. There was a contingent liability in respect of outstanding electric bill of ₹ 5,000, Bill Receivable taken over by Rose at ₹ 33,000.
Show Realisation Account, Partners Capital Account, Loan Account and Cash Account.



Answer -

Books of Rose and Lily

 

Realisation Account

Dr.

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Debtors

80,000

Provision for Doubtful Debts

3,600

Inventory

1,09,600

Creditors

40,000

Bills Receivables

40,000

Cash:

Buildings

2,80,000

Motor cycle

10,000

Cash:

Other Assets

4,84,000

4,94,000

Outstanding Electricity Bill

5,000

Rose’s Capital (Bills Receivable)

33,000

Creditors

38,000

Expenses

2,400

45,400

Profit transferred to:

Rose’ Capital

6,240

Lily’s Capital

9,360

15,600

5,70,600

5,70,600

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

Rose

Lily

Particulars

Rose

Lily

Realisation  (Bills Receivable)

33,000

Balance b/d

2,40,000

1,60,000

Cash A/c

2,33,240

1,99,360

Profit and Loss

20,000

30,000

Realisation  (Profit)

6,240

9,360

2,66,240

1,99,360

2,66,240

1,99,360

 

Lily’s Loan Account

Dr.

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Cash

32,000

Balance b/d

32,000

32,000

32,000

Cash Account

Dr.

 

Cr.

Particulars

Amount

₹

Particulars

Amount

₹

Balance b/d

16,000

Realisation:

Realisation:

Creditors

38,000

Motor Cycle

10,000

Outstanding Electricity Bill

5,000

Other Assets

4,84,000

4,94,000

Expenses

2,400

45,400

Lily’s Loan

32,000

Rose’s Capital A/c

2,33,240

Lily’s Capital A/c

1,99,360

5,10,000

5,10,000

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