X Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 2 1 dis......

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Accountancy ( 12th) Dissolution of Partnership Firm Add to Study Deck

X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2019 on which date their Balance Sheet was as follows:

Liabilities	Amount	Assets		Amount
Sundry Creditors	41,500	Cash at Bank		22,500
Bills Payable	20,000	Stock		80,000
Bank Loan	40,000	Debtors	50,000
General Reserve	50,000	Less: Provision for Doubtful Debts	2,500	47,500
Investments Fluctuation Reserve	40,000	Investments		55,000
Capital A/cs:		Premises		1,51,500
X 75,000
Y 75,000
Z 15,000	1,65,000

	3,56,500			3,56,500

A bill for 5,000 received from Mohan discounted from bank is not met on maturity.

The assets except Cash at Bank and Investments were sold to a company which paid 3,25,000 in cash.The Investments were sold and 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors includingBillsPayable were paid 57,500 in full settlement. Realisation Expenses amounted to 15,000.

Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

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