Question

Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2026 their Balance Sheet was as follows:

BALANCE SHEET OF ASHISH AND KANAV as at 31st March, 2026
Liabilities	₹	₹	Assets	₹
Sundry Creditors		42,000	Bank	35,000
Employees’ Provident Fund		60,000	Stock	24,000
Mrs. Ashish’s Loan		9,000	Sundry Debtors	19,000
Kanav’s Loan		35,000	Furniture	40,000
Workmen’s Compensation Fund		20,000	Plant	2,10,000
Investment Fluctuation Reserve		4,000	Investments	32,000
Capitals:		2,00,000	Profit & Loss A/c	10,000
Ashish	1,20,000
Kanav	80,000
		3,70,000		3,70,000

On the above date, they decided to dissolve the firm.

1. Ashish agreed to take over furniture at ₹ 38,000 and pay Mrs. Ashish’s loan.
2. Sundry Debtors realised ₹ 18,500 and the plant realised 10% more.
3. Kanav took over 40% ofthe stock at 20% less than the book value. Remaining stock was sold at a gain of 10%.
4. Sundry Creditors took over investments in full settlement.
5. Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 12,000 and to bear realisation expenses. Actual expenses of realisation amounted to ₹ 8,000.

Prepare Realisation Account.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer):		3,25,000	By Sundry Liabilities A/c (Transfer):		1,11,000
Stock	24,000		Sundry Creditors	42,000
Sundry Debtors	19,000		Employees’ Provident Fund	60,000
Furniture	40,000		Mrs. Ashish’s Loan	9,000
Plant	2,10,000		By Investment Fluctuation Reserve A/c		4,000
Investments	32,000		By Ashish’s Capital A/c (Furniture)		38,000
To Ashish’s Capital A/c (Mrs. Ashish’s Loan)		9,000	By Kanav’s Capital A/c (Stock)		7,680
To Kanav’s Capital A/c (Remuneration)		12,000	By Bank A/c (Assets Realised):		2,65,340
To Bank A/c (Employees’ Provident Fund)		60,000	Sundry Debtors	18,500
To Gain (Profit) on Realisation transferred to:		20,020	Plant	2,31,000
Ashish’s Capital A/c (3/5)	12,012		Remaining Stock	15,840
Kanav’s Capital A/c (2/5)	8,008
		4,26,020			4,26,020