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Kumar and Gaurav Were Partners in Firm in a Sharing Profit in the Ratio of Their Capitals. on 31stmarch,2013 Their Balance Sheet Was as Follows: Prepare Realisation Account - Accountancy

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

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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.

  Is there an error in this question or solution?
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