Question

Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3: 1 : 1. Last year, conflicts arose due to certain issues of disagreements and on 31st March, 2026, they decided to dissolve the firm. On that date their Balance Sheet was as under:

BALANCE SHEET OF ARNAB, RAGINI AND DHRUPAD as at 31st March, 2026
Liabilities	₹	₹	Assets	₹	₹
Sundry Creditors		60,000	Bank		50,000
Arnab’s Brother’s Loan		95,000	Sundry Debtors	1,70,000	1,50,000
Dhrupad’s Loan		1,00,000	Less: Provision for Doubtful Debts	20,000
Investment Fluctuation Reserve		50,000	Stock		1,50,000
Capital A/cs:		6,45,000	Investments		2,50,000
Arnab	2,75,000		Building		3,00,000
Ragini	2,00,000		Profit & Loss Account
Dhrupad	1,70,000
		9,50,000			9,50,000

The assets were realised and the liabilities were paid as under:

1. Arnab agreed to pay his brother’s loan.
2. Investments realised 20% less.
3. Creditors were paid at 10% less.
4. Building was auctioned for ₹ 3,55,000. Commission on auction was ₹ 5,000.
5. 50% of the stock was taken over by Ragini at market price which was 20% less than the book value and the remaining was sold at market price.
6. Dissolution expenses were ₹ 8,000 ₹ 3,000 were to be borne by the firm and the balance by Dhrupad. The expenses were paid by him.

Prepare Realisation Account and Partners' Capital Accounts.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer):		8,70,000	By Sundry Liabilities & Provisions:		2,25,000
Sundry Debtors (Gross)	1,70,000		Sundry Creditors	60,000
Stock	1,50,000		Arnab’s Brother’s Loan	95,000
Investments	2,50,000		Provision for Doubtful Debts	20,000
Building	3,00,000		Investment Fluctuation Reserve	50,000
To Arnab’s Capital A/c (Brother’s loan)		95,000	By Ragini’s Capital A/c (Stock taken)		60,000
To Bank A/c (Creditors paid at 10% less)		54,000	By Bank A/c (Assets Realised):		7,80,000
To Dhrupad’s Capital A/c (Expenses)		3,000	Investments (20% less)	2,00,000
To Gain (Profit) on Realisation transferred to:		43,000	Building (3,55,000 - 5,000)	3,50,000
Arnab’s Capital A/c (3/5)	25,800		Remaining Stock	60,000
Ragini’s Capital A/c (1/5)	8,600		Sundry Debtors (Book value)	1,70,000
Dhrupad’s Capital A/c (1/5)	8,600
		10,65,000			10,65,000

 

Dr.	Partners’ Capital Accounts						Cr.
Particulars	Arnab (₹)	Ragini (₹)	Dhrupad (₹)	Particulars	Arnab (₹)	Ragini (₹)	Dhrupad (₹)
To Profit & Loss A/c	30,000	10,000	10,000	By Balance b/d	2,75,000	2,00,000	1,70,000
To Realisation A/c (Stock)		60,000		By Realisation A/c (Loan)	95,000
To Bank A/c (Final Payment)	3,65,800	1,38,600	1,71,600	By Realisation A/c (Exp)			3,000
				By Realisation A/c (Gain)	25,800	8,600	8,600
	3,95,800	2,08,600	1,81,600		3,95,800	2,08,600	1,81,600