Kumar and Gaurav were partners in the firm in a sharing profit in the ratio of their capitals. On 31st March 2013 their Balance Sheet was as follows:
Balance Sheet of Kumar and Gaurav as on 31st March 2013 | |||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
Creditors Workman Compensation Fund Satya’s Current Account Capital’s: Kumar 1,50,000 Gaurav 1,00,000 |
80,000 25,000 24,000
2,50,000 |
Bank Debtors Stock Machinery Shanti’s Current Account
|
79,000 1,70,000 34,000 79,000 17,000
|
|
3,79,000 |
3,79,000 |
On the above date the firm was dissolved:
1. Kumar took over 50% of stock at 10% less than its book value. The remaining stock was sold for Rs 10,000.
2. Debtors were realized at a discount of 5%.
3. An unrecorded asset was sold for Rs 9,000 and machinery was sold for Rs 18,000.
4. Creditors were paid in full.
5. There was an outstanding bill for repairs for amounting to Rs 14,000 which was settled at Rs 12,000.
Prepare Realisation Account
Solution
Realisation Account | |||
Dr. | Cr. | ||
Particulars | Rs | Particulars | Rs |
To Sundry Asset: Debtors 1,70,000 Stock 34,000 Machinery 79,000
To Cash A/c (Liabilities) Creditors 80,000 Outstanding Bill 12,000
|
2,83,000
92,000
|
By Creditors A/c By Shanti’s Current A/c (stock) By Cash A/c (Assets Realised) Stock 10,000 Unrecorded Investment 9,000 Machinery 18,000 Debtors 1,61,500
By Realisation Loss trfd Kumar’s Current A/c 48,720 Gaurav’s Current A/c 32,480 |
80,000 15,300
1,98,500
81,200 |
|
3,75,000 |
|
3,75,000 |
Note: In this case, the partners share profit in the ratio of their capitals i.e. 3:2.