Question

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

Balance Sheet of Ravneet and Manmeet as on 31st March, 2025
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)
Creditors		4,50,000	Cash at Bank	2,50,000
Capitals:		8,00,000	Stock	2,50,000
Ravneet	5,00,000		Debtors	2,00,000
Manmeet	3,00,000		Plant & Machinery	5,50,000
		12,50,000		12,50,000

On the above date, the firm was dissolved. The plant and machinery was sold at ₹ 4,87,000 and stock at 20% less than the book value. Debtors realised ₹ 1,40,000.

Ravneet agreed to bear all realisation expenses for which he was allowed a commission of ₹ 9,000. Actual realisation expenses amounted to ₹ 7,500.
Prepare realisation account and partners’ capital accounts.

Answer 1

Dr.	Realisation Account			Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Stock A/c	2,50,000	By Creditors A/c		4,50,000
To Debtors A/c	2,00,000	By Bank A/c (Assets Realised)		8,27,000
To Plant & Machinery A/c	5,50,000	By Loss on Realisation:		1,82,000
To Bank A/c (Creditors Paid)	4,50,000	Ravneet’s Capital	1,27,400
To Ravneet’s Capital A/c (Comm.)	9,000	Manmeet’s Capital	54,600
	14,59,000			14,59,000

 

Dr.	Partners’ Capital Accounts				Cr.
Particulars	Ravneet	Manmeet	Particulars	Ravneet	Manmeet
To Realisation	1,27,400	54,600	By Balance b/d	5,00,000	3,00,000
To Bank A/c	3,81,600	2,45,400	By Realisation	9,000
	5,09,000	3,00,000		5,09,000	3,00,000

Working Notes:

Sale of Assets:

Plant & Machinery: ₹ 4,87,000

Stock = 2,50,000 − 20%

= 2,00,000

Debtors = ₹ 1,40,000

Total Realised = ₹ 8,27,000