Question

G and M were partners in a firm sharing profits and losses in the ratio of 3 : 2. on 31^st March 2022, their balance sheet was as follows:

Balance Sheet of G and M as on 31st March, 2022
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		50,000	Bank	75,000
Outstanding Expenses		45,000	Other Current Assets	4,80,000
Provision for Doubtful Debts		5,000	Machinery	7,00,000
9% Loan		15,00,000	Land and Building	15,00,000
Capitals:			Patents	10,000
G	6,00,000		Profit and Loss Account	15,000
M	7,00,000		Goodwill	1,20,000
Total	29,00,000		Total	29,00,000

On the above date, the firm was dissolved. Other current assets realised 10% less. Land and building and machinery were sold at their book value. 9% loan was discharged with unrecorded interest of ₹1,35,000. Expenses on dissolution amounted to ₹10,000.

Prepare Realisation Account.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Assets:			By Liabilities:
Other Current Assets	4,80,000	28,10,000	Creditors	50,000	16,00,000
Machinery	7,00,000		Outstanding Expenses	45,000
Land and Building	15,00,000		Provision for Doubtful Debts	5,000
Patents	10,000		9% Loan	15,00,000
Goodwill	1,20,000		By Cash A/c:
To Cash A/c:			Other Current Assets	4,32,000	26,32,000
Creditors	50,000	17,40,000	Machinery	7,00,000
Outstanding Expenses	45,000		Land and Building	15,00,000
9% Loan	16,35,000		By Realisation Loss:
Diss Expenses	10,000		G	1,90,800	3,18,000
			M	1,27,200
		45,50,000			45,50,000