Dissolution of partnership firm, sum no 6,

Sangeeta, Anita, and Smita, were in partnership, sharing Profits, and Losses, in the ratio 2:2:1, Their Balance Sheet, as on 31st March 2019, was as under,

[6] Dissolution of Partnership Firm – Practical problem – (Balbharati Book Keeping and Accountancy 12th Board Exam)

Sangeeta, Anita, and Smita were in partnership sharing Profits and Losses in the ratio 2:2:1. Their Balance Sheet as on 31^st March 2019 was as under :

Balance Sheets as on 31^st March 2019.

5. There was a contingent liability in respect of bills of ₹ 1,00,000 which was under discount. Out of them, a holder of one bill of ₹ 20,000 became insolvent.

Working Notes :

(1) Amount paid towards Sandhya’s Loan = Loan amount + Interest due on loan

= 1,20,000 + 6,000 = ₹ 1,26,000

(2) Amount received from Debtors = Debtors – Bad debts

= 1,25,000 – 10 % of 1,25,000 = 1,25,000  – 12,500

= ₹ 1,12,500

(3) Amount paid to Creditors = Creditor – 5 % discount

= 1,20,000 – 5 % on 1,20,000

= 1,20,000 – 6,000

= ₹ 1,14,000

(4) Amount paid towards Bills payable = Bills payable  –  5 % discount

= 20,000 –  5 % on 20,000

= 20,000  – 1,000 =

₹ 19,000

(5) Bill of  ₹ 1,00,000 was discounted with the Bank. On the due date bank could not recover ₹ 20,000 from one bill holder as he was declared insolvent. Therefore, we required to settle that contingent liability of ₹ 20,000.

---