Question

Suvan and Shivam were partners in a firm sharing profits and losses in the ratio of 3 : 7. On 31^st March, 2025, their Balance Sheet was as follows:

Balance Sheet of Suvan and Shivam as on 31st March, 2025
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		5,00,000	Cash at Bank	2,00,000
Capitals:		9,00,000	Stock	1,75,000
Suvan	4,00,000		Debtors	1,25,000
Shivam	5,00,000		Plant & Machinery	9,00,000
		14,00,000		14,00,000

On the above date, the firm was dissolved. Stock realised ₹ 1,30,000, and debtors realised ₹ 1,15,000. Plant and Machinery was taken over by Shivam for ₹ 3,40,000. Expenses of realisation amounting to ₹ 3,000 were paid by Suvan.

Prepare Realisation Account and Partners’ Capital Accounts.

Answer 1

Dr.	Realisation Account			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Stock A/c	1,75,000	By Creditors A/c		5,00,000
To Debtors A/c	1,25,000	By Bank A/c (Assets Realised)		2,45,000
To Plant & Machinery A/c	9,00,000	By Shivam’s Capital A/c (P&M)		3,40,000
To Bank A/c (Creditors paid)	5,00,000	By Loss on Realisation:		6,18,000
To Suvan’s Capital A/c (Exp)	3,000	Suvan	1,85,400
		Shivam	4,32,600
	17,03,000			17,03,000

 

Dr.	Partners’ Capital Accounts				Cr.
Particulars	Suvan (₹)	Shivam (₹)	Particulars	Suvan (₹)	Shivam (₹)
To Realisation (P&M)		3,40,000	By Balance b/d	4,00,000	5,00,000
To Realisation (Loss)	1,85,400	4,32,600	By Realisation (Exp)	3,000
To Bank A/c (Final)	2,17,600		By Bank A/c (Deficit)		2,72,600
	4,03,000	7,72,600		4,03,000	7,72,600

Working note:

1. Assets Realised (Bank) = Stock + Debtors

= 1,30,000 + 1,15,000

= 2,45,000

Liability Payment

2. Distribution of Loss (Ratio 3 : 7)

Suvan’s Share = `6,18,000 xx 3/10`

= 1,85,400

Shivam’s Share = `6,18,000 xx 7/10`

= 4,32,600