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Question 42 Chapter 7 – Class 12 Part 1 Unimax
42. A and B were partners from January 1, 2021 with capitals of 60,000 and 40,000 respectively. Their profit sharing ratio was in proportion to capitals as originally contributed by them. They continued business for two years. In the first year they earned a profit of
50,000 but in the second year they suffered a loss of 20,000. They felt the business is no more profitable so they decided to dissolve on December 31, 2022. Creditors on that date were 20,000. Partners withdrew for their personal use 8,000 per partner per year. Assets
were sold for 1,00,000 and expenses of realisation amounted to 3,000.
Prepare necessary ledger accounts to close the books of the firm.
The solution of Question 42 Chapter 7 – Class 12 Part 1 Unimax: –
Realisation a/c
| Particulars | Amount | Particulars | Amount | ||
| To Sundry Assets | 1,18,000 | By Sundry creditors | 20,000 | ||
| To Cash A/c | By Bank A/c | 1,00,000 | |||
| – Creditors | 20,000 | To Profit Transferred to Capital A/cs | |||
| – Expenses | 3,000 | 23,000 | A | 12,600 | |
| B | 8,400 | 21,000 | |||
| 1,41,000 | 1,41,000 | ||||
Partner’s Capital a/c
| Particulars | A | B | Particulars | A | B |
| To Drawings | 60,500 | 40,500 | By Cash A/c | 58,000 | 38,000 |
| To Balance c/d | By P & L a/c | 2,500 | 2,500 | ||
| 60,500 | 40,500 | 60,500 | 40,500 | ||
| To P & L a/c | 12,000 | 8,000 | By Bal. b/d | 82,000 | 52,000 |
| To Drawings | 8,000 | 8,000 | |||
| To Balance c/d | 62,000 | 36,000 | |||
| 82,000 | 52,000 | 82,000 | 52,000 |
Working Note:
Balance Sheet on Date of Dissolution
| Liabilities | Amount | Assets | Amount | ||
| Capital A/cs | Sundry Assets (B.F.) | 1,18,000 | |||
| A | 62,000 | ||||
| B | 36,000 | ||||
| Creditors | 20,000 | ||||
| 1,18,000 | 1,18,000 | ||||
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