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Nasir, Hashim and Aslam were partners sharing profits and losses in the ratio 1:1:3. The balance sheet as at 31 December 2010 was as follows: Balance Sheet as at 31 December 2010 Fixed Assets Cost Dep NBV Premises 180000 10000 170000 Motor Vehicles 27500 5500 22000 207500 15500 192000 Current assets A.C 68250 Debtors 172500 Less: provision for bad debt 1265 171235 Bank 26065 265550 Less: Current Liabilities Creditors 60000 Working Capital 205550 397550
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Capital: Nasir Hashim Aslam Current: Nasir Hashim Aslam Long term liabilities Loan from Aslam
100000 40000 160000 300000 30000 (10000) 70000 90000 7550 397550
Assets and liabilities were disposed of as follows: 1. The premises were sold at Rs. 200000 and legal charges from the sale amount to Rs.10000 2. Aslam took over the A.C and motor vehicles at book value 3. Except for Rs.2500, all debts were collected 4. The creditors were discharged for Rs.56000 5. Realization expenses of Aslam10000 were paid Required: Prepare the realization, Bank, Capital and Current account for the dissolution 3 of partnership
Premises
Realization 170000
Bal b/f
Premises 180000 Prov. for depreciation Realization 180000 Provision for depreciation
Premises
10000
Bal b/f
10000
Bal b/f
Motor Vehicles Prov. for depreciation 27500 Realization 27500 Provision for depreciation
Motor Vehicles
5500
Bal b/f
5500
Bal b/f
Debtors 172500 Prov. for bad debts Realization 172500 Provision for Bad Debts
Motor Vehicles
1265
Bal b/f
1265
Bal b/f
68250
Realization Premises 170000 Bank premises (200000-10000) 190000 - Debtors (172500-2500) 170000 Motor Vehicles 22000 Debtors 171235 Creditors discount received 4000 A.C 68250 Bank- realization expenses 10000 Loan from Aslam Bank 7550 Bal b/f 7550
Bank 26065 Realization - expenses 190000 Creditors 170000 Loan from Aslam Creditors
60000
8 60000
60000
Capital Nasir Hashim Aslam Nasir Hashim Asla Bal b/f 100000 40000 160000 68250 Gain on realizaiton 2553 2553 7659 30000 70000 22000 Current 10000 132553 32553 147409 132553 32553 147409 132553 32553 147409 Nasir 30000 Hashim 10000 Current Aslam Nasir 30000 Hashim
As
70000 10000
30000 10000 70000 30000 10000 70000 Bank Bal b/f 26065 Realization - expenses 10000 Realization premises 190000 Creditors 56000 - debtors 170000 Loan from Aslam 7550 Capital: Nasir 132553 Hashim 32553 Aslam 147409 9 386065 386065
Realization Premises 170000 Bank premises (200000-10000) 190000 - Debtors (172500-2500) 170000 Motor Vehicles 22000 Debtors 171235 Creditors discount received 4000 A.C 68250 Aslam A.C 68250 Bank- realization expenses 10000 - MV 22000 Gain on realization: Nasir 1/5 2553 Hashim 1/5 2553 Aslam 3/5 7659 12765 454250 454250 Nasir Realization: A.C MV
Capital Hashim Aslam Nasir Hashim Asla Bal b/f 100000 40000 160000 68250 Gain on realizaiton 2553 2553 7659 22000
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If one partner is insolvent, his capital deficiency will be shared by other partners according to the last agreed capital ratio (the ratio of the balances in the capital accounts before the dissolution, in the absence of any agreement to the contrary
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