Dissolution of Partnership Firm — Book Keeping & Accountancy STD 12 Commerce / Arts — Question

From the following Receipts and Payments Account and additional information prepare Income and Expenditure Account for the year ended 31st March 2019 and Balance Sheet as on that date.

Dr.	Receipts and Payments Account for the year ended 31st March 2019		Cr.
Receipts	Amount ₹	Payments	Amount ₹
To Balance b/d	3,000	By Salaries	4,000
To Subscription	5,000	By Printing & Stationery	1,000
To Donations (Revenue)	5,000	By Commission	500
To Entrance fees	4,000	By Rent	2,000
To Interest	1,000	By Electric Charges	1,500
		By Furniture	8,000
		By Balance c/d	1,000
	18,000		18,000

Additional Information :
1) Outstanding Rent was ₹ 200
2) Subscription includes ₹ 1,000 as Subscription received in advance and subscription outstanding for current year was ₹ 500.
3) Depreciate Furniture @ 8 % p.a.
4) 50 % Entrance fees should be capitalised
5) Capital Fund was ₹ 3,000

A, B, and C are partners of a firm sharing profit and loss in the 3 : 3 : 2 ratio. Their firm’s Balance Sheet as of 31st March, 2020 is as under:
Balance Sheet as of 31st March 2020

Liabilities		Amt.(₹)	Assets	Amt.(₹)
Bills Payable		11,500	Cash	27,000
General Reserve		20,000	Debtors	62,500
Creditors		43,000	Investments	60,000
Capital Accounts :			Machinery	43,500
A	60,000		Furniture	31,500
B	65,000		Equipments	20,000
C	45,000	1,70,000
		2,44,500		2,44,500

On 1st April 2020, C retired from the firm on the following terms:
1. Outstanding amount of retiring partner C be transferred to his loan account.
2. Write off ₹ 2,500 as bad debts.
3. ₹ 500 is now not payable to creditors.
4. Assets are revalued as under:
Furniture ₹ 30,000, Machinery ₹ 40,000, Equipments ₹ 21,000.
Pass necessary journal entries in the books of a firm.

Simple Example - Prepare Income and Expenditure Account only
From the following Receipts & Payments Account and Adjustments given below you are required to prepare Income and Expenditure Account for year ended 31st March 2020 of Venna Cultural Association, Satara.

Dr.	Receipts & Payments Accounts for the year ended 31st March 2020				Cr.
Receipts	Amount	Amount _(₹)	Payments	Amount _(₹)	Amount _(₹)
To Balance b/d			By Rent
Cash in Hand	10,000		2018-19	700
Cash at Bank	19,200	29,200	2019-20	54,300	55,000
To Subscriptions	-		By Fixed Deposit		47,000
2018-19	15,000		By Sundry Exp.		8,000
2019-20	1,00,000		By Insurance		12,000
2020-21	8,000	1,23,000	By Printing & Stationery		6,000
To Donations	-	25,000	By Picnic Expenses		18,000
(General)			By Salaries		20,000
To Entrance fees		15,000	By Traveling Expenses		13,000
To Interest on Fixed		4,800	By Advt. (2018 - 19)		7,000
Deposit			By Balance c/d
To Picnic Receipts		20,000	Cash in Hand	15,000
			Cash at Bank	16,000	31,000
		2,17,000			2,17,000

Adjustments :
1) Outstanding Rent for the current year was ₹ 7,000.
2) 60 % Entrance fees should be capitalised.
3) Outstanding subscription for the current year was ₹ 20,000.
4) Prepaid Insurance ₹ 1,000.

The following are the details of Subscription, as per Receipts and Payments Account. Subscription received during the year 2018 - 19 ₹ 50,000 Subscription outstanding on 31st March 2018 ₹ 10,000. Subscription outstanding on 31st March 2019 ₹ 20,000. Subscription received in advance as on 31st March 2018 ₹ 15,000. Subscription received in advance as on31st March 2019 ₹ 10,000
You are required to show its presentation in Income and Expenditure Account for the year
ended 31st March 2019 and a Balance Sheet as on that date.

Outstanding Expenses and Prepaid Expenses of the current year and previous year Balance Sheet as on 31st March 2018

Dr.	Balance Sheet as on 31st March 2018				Cr.
Liabilities	Amount ₹	Amount ₹	Assets	Amount ₹	Amount ₹
			Prepaid Salaries (for 2018-19)		2,000

Dr.	Receipts & Payments Account for the year ended 31st March 2019				Cr.
Receipts	Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
			By Salaries
			2018-19	30,000
			2019-20	1,000	31,000

Adjustment : Outstanding Salaries for the current year was ₹ 5,500, show the presentation of Salaries in the Final Accounts of a concern for the year 2018 - 19.

Dr. Abhinav Bharat started practice of Medical Practitioner on 1st April 2019, He gives you the Receipts and Payments Account for the year ended 31st March 2020 and the adjustments.
Prepare Income and Expenditure Account and Balance Sheet for the year ended 31st March
2020.

Dr.	Dr. Abhinav Bharat Receipts and Payments Account for the year ended 31st March 2020		Cr.
Receipts	Amount ₹	Payments	Amount ₹
To Cash introduced	25,000	By Furniture	8,000
To Visit fees	10,000	By Equipments	10,000
To Receipts from Dispensary	30,000	By Drugs	7,000
To Sundry Receipts	5,000	By Salaries	12,000
		By Rent	6,000
		By Conveyance	4,000
		By Stationery	500
		By Electrical Charges	5,000
		By Journals	500
		By Drawings	2,000
		By Balance c/d
	70,000		70,000

Additional Information :
1) Receipts in Arrears are Visit Fees ₹ 2,000 and Dispensary ₹ 500
2) Outstanding Expenses - Rent ₹ 500 and Salaries ₹ 1,000
3) Stock of drugs was ₹ 1,000
4) Depreciate Furniture @ 8 % p.a. and Equipments ₹ 500.
5) 40% of conveyance are for domestic purpose.

Ajay, Sanjay and Vijay were partners sharing profits and losses in the proportion to their capital. Their Balance Sheet as on 31st March 2019 was as follows.

Balance Sheet as on 31st March 2019
Liabilities	Amt ₹	Assets		Amt ₹
Capital Account :		Land & Building		80,000
Ajay	60,000	Motor Lorry		40,000
Sanjay	40,000	Debtors	32,000
Vijay	20,000	Less: R. D. D.	4,000	28,000
Creditors	50,000	Furniture		36,000
Outstanding Salary	6,000	Bank		28,000
Reserve Fund	36,000
	2,12,000			2,12,000

Vijay died on 1 st August 2019 and the following adjustments were made.
1. Assets to be revalued as under Land & Building ₹ 88,000, Motor Lorry ₹ 36,000 and Furniture ₹ 34,000
2. All Debtors were good.
3. Goodwill of the firm valued at two times the average profit of the last 4 years profit.
4. Vijay’s share of profit to be calculated on the basis of average profit of last three years.
5. Profit for 4 years were 1st year ₹ 12,000, 2nd year ₹ 24,000, 3rd year ₹ 14,000, 4th year ₹ 22,000
Prepare : 1. Vijay’s Capital Account, showing amount payable to his executor.
2. Give working of Vijay’s share of Goodwill and profit upto the date of his death.

The following is the Receipts and Payments Account of Young Pensior's Association. Leh for the year ended 31st March 2020.

Dr.	Receipts & Payments Account for the year ended 31st March 2020				Cr.
Receipts	Amount ₹	Amount ₹	Payments	Amount ₹	Amount ₹
To Bal b/d		7,000	By Stationery		8,000
To Subscriptions			By Postage		1,000
2018-19	5,000		By Picnic Exp		8,000
2019-20	83,000		By Salaries		8,000
2020-21	2,000	90,000	By Annual		4,500
To Entrance fees		13,000	General meeting
(Capital Receipt)			Expenses
To Donations		60,000	By Traveling Exp		7,500
To Legacies		40,000	By Rent		12,000
To Interest on			By charity		7,800
Deposit		7,000	By Sundry Exp.		3,200
To Picnic Receipts		10,000	By Fixed Deposit		1,10,000
			By Furniture		50,000
			By Balance c/d		7,000
		2,27,000			2,27,000

Adjustment :
1) Outstanding subscription for current year ₹ 7,000.
2) Furniture was purchased on 1st Oct, 2019 and it is to be depreciated by 10 % p.a.
3) Outstanding picnic receipts ₹ 7,500.
4) Stock of stationery on 1-4-2019 was ₹ 350 and on 31st March, 2020 was ₹ 1,700.
5) 50 % of legacies and full amount of donations are to be capitalised.
With the above information, you are required to prepare Income and Expenditure Account for the year ended 31st March 2020.