you ascertain that the balance in profit and loss account is prior to charging inter 609146

Ajay, Vijay and Sanjay were in partnership sharing profits and losses in the ratio of 1/5:3/10:1/2. The Balance Sheet as on Dec 31, 2009, when they decided to dissolve, was as follows:

Liabilities

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Rs

Assets

Rs

Capital Accounts

Plant and Machinery

1,50,000

Ajay 90,000

Sundry Debtors

6,00,000

Vijay 1,20,000

Advance to Ajay

60,000

Sanjay 90,000

3,00,000

Cash

30,000

Loan from Bank on Book Debts and Plant

3,60,000

Profit and Loss Account

2,40,000

Loan from Sanjay (advanced on Jan 1, 2009)

60,000

Trade Creditors

3,60,000

10,80,000

10,80,000

You ascertain that the balance in Profit and Loss Account is prior to charging interest on Sanjay’s loan. Plant and Machinery and Debtors realised 80%. Ajay’s private estate which was valued at Rs 2,10,000 has a liability there on Rs 90,000. The private estate realised only Rs 1,20,000. Vijay is insolvent on his own account to partnership.

You are required to prepare Realisation Account, Cash Account and Partner’s Capital Accounts.

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