A, B, C and D has been carrying on business in Partnership, sharing Profit and Losses in the ratio 3 :2 :1 :1. They decide to dissolve the…

1. Realisation Account Particulars ₹ Particulars ₹ To Sundry Assets A/c (Transfer) By Sundry Creditors A/c (transfer) 20,000 - Premises 1,20,000 By Mortgage loan 80,000 - Furniture 40,000 By Cash (Assets Realized) - Stock 1,00,000 - Premises 90,000 - Sundry Debtors 40,000 - Furniture 16,000 To Cash (Creditors Paid) (₹ 20,000+12,000) 32,000 - Stock 60,000 To Cash (Expenses) 4,000 - Sundry Debtors 24,000 To Cash (Mortgage Loan) 80,000 By Loss trfd to Capital (3:2:1:1) 1,90,000 - A 54,000 - B 36,000 - C 18,000 - D 18,000 4,16,000 1,26,000 4,16,000 2. Partners’ Capital Account Particulars A B C D Particulars A B C D To Bal. b/d - - 10,000 12,000 By Bal. b/d 1,00,000 60,000 - - To Realization (Loss) 54,000 36,000 18,000 18,000 By Gen. Res. 24,000 16,000 8,000 8,000 To C’s A/c (Loss13:8) 11,143 6,857 - - By Cap. Res. (in3:2:1:1) 6,000 4,000 2,000 2,000 To Cash (Bal. Fig.) 1,18,857 73,143 - - By Cash (Realn. Loss) 54,000 36,000 - 18,000 By A’s A/c - - 11,143 - By B’s A/c - - 6,857 - By Cash (b/f) - - - 2,000 Total 1,84,000 1,16,000 28,000 30,000 Total 1,84,000 1,16,000 28,000 30,000 1. Cash Account Receipts ₹ Payment ₹ To balance b/d 8,000 By Realization (Creditors) 32,000 To Realization A/c (Assets realized) 1,90,000 By Realization A/c (Expenses) 4,000 To Capital A/c (Cash brought in to make good realization loss By Realization A/c (Loan) 80,000 - A 54,000 By A’s Capital A/c (Final Settlement) 1,18,857 - B 36,000 By B’s Capital A/c (Final Settlement) 73,143 - D 18,000 1,08,000 To D’s Capital A/c (amt. received) 2,000 Total 3,08,000 Total 3,08,000 Working Notes:- i. Capital ratio for calculation of distribution of loss of insolvency between partner A & B : Particular A B Opening Balance 1,00,000 60,000 GR 24,000 16,000 CR 6,000 4,000 Capital Ratio (13:8) 1,30,000 80,000 ii. D will not share in loss of C because it has already debit balance.