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Question
Realisation profit of a firm is ₹ 6,000, partners share Profit & Loss in the ratio of 3: 2: 1. Calculate the amount of Realisation Profit to be credited to Partners Capital A/c.
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Solution
Distribution of ₹ 6,000 in 3: 2: 1 ratio
`6,000 xx 3/6`= ₹ 3,000
`6,000 xx 2/6` = ₹ 2,000
`6,000 × 1/6` = ₹ 1,000
Amount of realisation profit ₹ 3,000, ₹ 2,000 and ₹ 1,000 is to be credited to Partner’s Capital A/c respectively.
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| Sundry Creditors | 21000 | Plant and Machinery | 20000 | |
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| Balance Sheet as on 31st March, 2019 | ||||
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c: | Building | 60,000 | ||
| Riddhi | 80,000 | Furniture | 24,000 | |
| Siddhi | 60,000 | Machinery | 20,000 | |
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| Balance Sheet as on 31st March, 2020 | |||||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| Capital A/c: | Furniture | 2,000 | |||
| Mukund | 55,000 | 89,000 | Sundry Assets | 34,000 | |
| Sachin | 20,000 | Debtors | 48,400 | 46,000 | |
| Yuvraj | 14,000 | Less: RDD | 2,400 | ||
| Creditors | 12,000 | Stock | 15,600 | ||
| Loan | 3,000 | Cash | 6,400 | ||
| 1,04,000 | 1,04000 | ||||
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Credit side total of Realisation A/c |
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| ₹ 20,000 | ? | ₹ 4,000 |
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Credit side total of Capital A/c |
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| Capital Account: | Machinery | 1,00,000 | |
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| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital: | Furniture | 19,600 | |||
| Amul | 1,26,000 | 1,82,000 | Plant | 91,000 | |
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| Cash in Hand | 14,000 | ||||
| Advertisement Suspense | 11,200 | ||||
| 2,52,000 | 2,52,000 | ||||
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|
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|
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Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities.
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Give the journal entry passed by the firm to realise the payment from the debtor.
Ira (a partner in a firm) was allowed to retain the whole of the stock as her remuneration for services rendered by her in the course of dissolution of the firm. The value of stock was ₹ 10,000 which had been transferred to the Realisation Account.
Complying with the accounting principle of full disclosure, record the above transaction in the books of the partnership firm at the time of its dissolution.
