RULE IN GARNER VS. MURRAY Illustration

X, Y and Z are partners sharing profit and losses equally. On 31′ December 1999 they decided to dissolve the partnership. The Balance Sheet as on that date is given below:

AssetsAmountLiabilitiesAmount
Cash
Building
Furniture
Z's Capital
10,000
1,50,000
40,000
10,000
Sundry creditors
,
Capitals: X
Y
50,000
1,00,000
60,000
2,10,0002,10,000

The assets realized Rs. 1,40,000 and Realization expenses were Rs. 10,000. Z has been declared insolvent.

Show the Realization Account and capital Account of the partners after the decision of Garner Vs. Murray.

 

Particulars

Rs.

Particulars

Rs.

To sundry Assets

1,90,000

By creditors

5,000

To cash (Expenses)

10,000

” cash

14,000

To cash (creditors) )

50,000

“X ‘s Capital         20,000
” y ‘s   “”             20,000
“Z ,s    ,,,,            20.000

60,000

2,50,000

2,50,000

 

 

X’s Capital Account

Rs.

Rs.

To Realization Account (loss)

20,000

By Balance b /d

1,00,000

”    Z ‘s Capital

18,750

” Cash

20,000

” Cash A/c

81,250

Total

120,000

Total

120,000

 

 

Y’s Ca ital Account

Rs.

Rs.
To Realization Account (loss)

20,000

By Balance b/d

60,000

”   Z’s Capital A/c

11,250

By Cash

20,000

” Cash

48,750

Total

80,000

Total

80,000

 

Z’s Ca ital Account

Rs.

Rs.
To Balance b/d

10,000

By X’s Capital

17,750

To kealization Account (loss)

20,000

By Y’s Capital

11,250

Total

30,000

Total

30,000

Cash Account

Particular

Rs.

Particular

Rs.

To Balance b/d

10,000

By Realisation A/c

10,000

”    Realisation A/c

1,40,000

”   Realisation (Cr.)

50,000

”   X’s Capital

20,000

”   X’s Capital

81,250

H   Ins Hu

20,000

”   Y’s Capital

48,750

1,90,000

1,90,000

 

 

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