Question

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013, their Balance Sheet was as follows:

Liabilities				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:					Machinery			9,30,000
Ramesh		7,00,000			Umesh's Current Account			50,000
Umesh		3,00,000		10,00,000
				16,60,000				16,60,000

On the above date the firm was dissolved.
(a) Ramesh took over 50% of stock at ₹ 10,000 less than book value. The remaining stock was sold at a loss of ₹ 15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
(c) Creditors were paid in full.
(d) There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000.
Prepare Realisation Account.

Answer 1

Realisation Account

Dr.							Cr.
Particulars				Amount Rs	Particulars			Amount Rs
Sundry Assets-					Creditors			1,70,000
Debtors		2,40,000			Ramesh’s Current A/c (Stock)			55,000
Stock		1,30,000			Cash A/c (Assets Realised)
Furniture		2,00,000			Stock	50,000
Machinery		9,30,000		15,00,000	Machinery	4,50,000
					Debtors	2,28,000		7,28,000
To Cash A/c (Liabilities)					Umesh’s Current A/c (Furniture)			50,000
Creditors			1,70,000
Outstanding Bill			1,40,000	3,10,000	Realisation Loss
					Ramesh’s   Current A/c	5,64,900
					Umesh’s Current A/c	2,42,100		8,07,000
				18,10,000				18,10,000