Question

Ashok, Babu and Chetan are in partnership, sharing profit in the proportion of `1/2, 1/3, 1/6` respectively. They dissolve the partnership on 31st March, 2026 when the Balance Sheet of the firm is as under:

Liabilities	₹	₹	Assets	₹
Sundry Creditors		45,500	Bank	7,500
Loan by Babu		30,000	Sundry Debtors	58,000
Capital A/cs:		1,52,000	Stock	39,500
Ashok	70,000		Machinery	48,000
Babu	55,000		Investments	42,000
Chetan	27,000		Freehold Property	50,500
Current A/cs:		18,000
Ashok	10,000
Babu	5,000
Chetan	3,000
		2,45,500		2,45,500

Machinery was taken by Babu for ₹ 45,000, Ashok took over the Investments and Freehold property was taken by Chetan at ₹ 55,000. The remaining Assets realised as follows: Sundry Debtors ₹ 56,500 and Stock ₹ 36,500.

Sundry Creditors were settled at ₹ 1,400 less. An Office computer, not shown in the books of accounts realised ₹ 9,000. Realisation expenses amounted to ₹ 3,000. Prepare Realisation Account, Partners’ Capital Accounts and Bank Account.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer):		2,38,000	By Sundry Creditors A/c (Transfer)		45,500
Sundry Debtors	58,000		By Ashok’s Current A/c (Investments at BV)		42,000
Stock	39,500		By Babu’s Current A/c (Machinery taken)		45,000
Machinery	48,000		By Chetan’s Current A/c (Property taken)		55,000
Investments	42,000		By Bank A/c (Assets Realised):		1,02,000
Freehold Property	50,500		Sundry Debtors	56,500
To Bank A/c (Expenses):			Stock	36,500
Sundry Creditors (45,500 − 1,400)		44,100	Unrecorded Computer	9,000
Realisation Expenses		3,000
To Gain (Profit) on Realisation transferred to:		4,400
Ashok’s Current A/c	2,200
Babu’s Current A/c	1,467
Chetan’s Current A/c	733
		2,89,500			2,89,500

 

Dr.	Partners’ Current Accounts						Cr.
Particulars	Ashok (₹)	Babu (₹)	Chetan (₹)	Particulars	Ashok (₹)	Babu (₹)	Chetan (₹)
To Realisation A/c (Assets taken)	42,000	45,000	55,000	By Balance b/d	10,000	5,000	3,000
				By Realisation A/c (Gain)	2,200	1,467	733
				By Partners’ Capital A/cs (Transfer)	29,800	38,533	51,267
	42,000	45,000	55,000		42,000	45,000	55,000

 

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	7,500	By Realisation A/c (Creditors paid)	44,100
To Realisation A/c (Assets realised)	1,02,000	By Realisation A/c (Expenses)	3,000
To Chetan’s Capital A/c (Cash brought in)		By Loan by Babu	30,000
		By Ashok’s Capital A/c (Final payment)	40,200
		By Babu’s Capital A/c (Final payment)	16,467
	1,33,767		1,33,767