Question

C, D, E were partners in a firm sharing profits in the ratio of 3 : 1 : 1. Their balance sheet as at 31^st March, 2022 were as follows:

Balance Sheet of C, D and E as at 31st March, 2022
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Capitals:		7,00,000	Machinery	3,20,000
C	4,00,000		Investments	3,00,000
D	2,00,000		Stock	2,00,000
E	1,00,000		Debtors	1,00,000
C's Loan		1,20,000	Cash at Bank	2,00,000
Sundry Creditors		1,00,000
Bills Payable		2,00,000
		11,20,000		11,20,000

On the above date the firm was dissolved due to certain disagreements among the partners:

1. Machinery of ₹ 3,00,000 were given to creditor in full settlement of their amount and remaining machinery was sold for ₹ 10,000.
2. Investments realised ₹ 2,90,000.
3. Stock was sold for ₹ 1,80,000.
4. Debtors for ₹ 20,000 proved bad.
5. Realisation expenses amounted at ₹ 10,000

Prepare Realisation Account.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Machinery A/c		3,20,000	By Sundry Creditors A/c		1,00,000
To Investments A/c		3,00,000	By Bills Payable A/c		2,00,000
To Stock A/c		2,00,000	By Bank A/c - Assets Realised:
To Debtors A/c		1,00,000	Machinery	10,000	5,60,000
To Bank A/c - Liabilities Paid:		2,10,000	Investment	2,90,000
Bills Payable	2,00,000		Stock	1,80,000
Realisation Expenses	10,000		Debtors	80,000
			By Loss transferred to Capital Accounts of:		2,70,000
			C	1,62,000
			D	54,000
			E	54,000
		11,30,000			11,30,000