From the information provided below, calculate various questions asked in questions.
Following is the Balance Sheet of Ashwani and Bharat on March 31, 2024.
Balance Sheet Ashwani and Bharat as on March 31, 2024
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
| Creditors | 76,000 | Cash at bank | 17,000 |
| Mrs. Ashwani's loan | 10,000 | Stock | 10,000 |
| Mrs. Bharat loan | 20,000 | Investments | 20,000 |
| Investment fluctuation reserve | 2,000 | Debtors- 40,000 Less: Provision for doubtful debts 4,000 |
36,000 |
| General Reserve | 20,000 | Buildings | 70,000 |
| Capitals: Ashwani- 20,000 Bharat - 20,000 |
40,000 | Goodwill | 15,000 |
| Total | 1,68,000 | Total | 1,68,000 |
The firm was dissolved on that date. The following was agreed transactions took place.
(i) Aswhani promised to pay Mrs. Ashwani's loan and took away stock for ₹8,000.
(ii) Bharat took away half of the investment at 10% less. Debtors realised for ₹38,000. Creditor's were paid at less of ₹380. Buildings realised for ₹1,30,000, Goodwill ₹12,000 and the remaining Investment were sold at ₹9,000. An old typewriter not recorded in the books was taken over by Bharat for ₹600. Realisation expenses amounted to ₹2,000.
Amount of Assets realized debited to Bank Account will be:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹1,89,000.
Debtors realised = ₹38,000
Buildings realised = ₹1,30,000
Goodwill = ₹12,000
Remaining Investment sold = ₹9,000
Total amount realised = 38,000 + 1,30,000 + 12,000 + 9,000
= 1,89,000
When an asset (including an unrecorded asset) is taken over by a partner, the entry passed is:Partner’s Capital Account is debited and Realisation Account is credited. This means only those items are debited to Bank Account where Items not included in the Bank Account realization:
Items not included in the Bank Account realization:
Stock: Taken over by Ashwani for ₹8,000 (Debited to Ashwani’s Capital Account).
Half of Investments: Taken over by Bharat for ₹9,000 (Debited to Bharat’s Capital Account).
Old Typewriter: Taken over by Bharat for ₹600 (Debited to Bharat’s Capital Account).
NOTE 2: This question is straight from NCERT - refer page 173-174.