Question

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2026, their Balance Sheet was as follows:

Liabilities		Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors			1,70,000	Bank	1,10,000
Workmen Compensation Reserve			2,10,000	Debtors	2,40,000
General Reserve			2,00,000	Stock	1,30,000
Ramesh’s Current Account			80,000	Furniture	2,00,000
Capital A/cs:			10,00,000	Machinery	9,30,000
Ramesh		7,00,000		Umesh’s Current Account	50,000
Umesh		3,00,000
			16,60,000		16,60,000

On the above date the firm was dissolved.

1. Ramesh took over 50% of stock at ₹ 10,000 less than book value.
2. Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
3. Creditors were paid in full.
4. There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000.

Prepare Realisation Account.

Hints:

1. Balance Stock (₹ 65,000) will be realised at Book Value, being tangible asset.
2. Debtors will be realised at book value, i.e., ₹ 2,40,000.

Answer 1

Dr.	Realisation Account			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer):		By Creditors A/c (Transfer)		1,70,000
Debtors	2,40,000	By Ramesh’s Current A/c (Stock taken)		55,000
Stock	1,30,000	By Umesh’s Current A/c (Furniture taken)		50,000
Furniture	2,00,000	By Bank A/c (Assets Realised):
Machinery	9,30,000	Machinery		4,50,000
To Bank A/c (Expenses paid)		Balance Stock (At Book Value)		65,000
Creditors	1,70,000	Debtors (At Book Value)		2,40,000
Unrecorded Bill for Repairs	1,40,000	By Loss on Realisation transferred to:		7,80,000
		Ramesh’s Current A/c (7/10)	5,46,000
		Umesh’s Current A/c (3/10)	2,34,000
	18,10,000			18,10,000