Question

Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2026, the Balance Sheet of the firm was:

Liabilities	₹	₹	Assets	₹	₹
Sundry Creditors		1,05,000	Cash		6,000
Loan by Rita		25,000	Bank		30,000
General Reserve		24,000	Stock		75,000
Capital A/cs:		1,20,000	Sundry Debtors	66,000	60,000
Rita	90,000		Less: Provision for Doubtful Debts	6,000
Sobha	30,000		Plant and Machinery		45,000
			Land and Building		48,000
			Loan to Sobha		10,000
		2,74,000			2,74,000

The firm was dissolved on the date given above. The following transactions took place:

1. Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
2. Sundry Debtors realised ₹ 54,000.
3. Sundry Creditors were paid at a discount of 10%.
4. Land and Building realised ₹ 1,20,000.
5. Rita took the goodwill of the firm at a value of ₹ 30,000.
6. An unrecorded asset of ₹ 6,900 was given in settlement of unrecorded liability of ₹ 6,000 in full settlement.
7. Realisation expenses were ₹ 5,250.
8. A loan to Sobha was received.

Show the Realisation Account, Partners’ Capital Accounts and Bank Account in the books of the firm.

Answer 1

Dr.	Realisation Account				Cr.
Particulars	Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c (Transfer):		2,34,000	By Sundry Liabilities & Provisions:		1,11,000
Stock	75,000		Sundry Creditors	1,05,000
Sundry Debtors (Gross)	66,000		Provision for Doubtful Debts	6,000
Plant and Machinery	45,000		By Rita’s Loan A/c (Stock settlement)		25,000
Land and Building	48,000		By Rita’s Capital A/c (Goodwill taken)		30,000
To Bank A/c (Liabilities Paid):		99,750	By Bank A/c (Assets Realised):		2,75,250
Sundry Creditors (1,05,000 - 10%)	94,500		Sundry Debtors	54,000
Realisation Expenses	5,250		Land and Building	1,20,000
To Gain (Profit) on Realisation transferred to:		1,07,500	Remaining Stock (Book Value)	56,250
Rita’s Capital A/c	53,750		Plant & Machinery (Book Value)	45,000
Sobha’s Capital A/c	53,750
		4,41,250			4,41,250

 

Dr.	Partners’ Capital Accounts				Cr.
Particulars	Rita (₹)	Sobha (₹)	Particulars	Rita (₹)	Sobha (₹)
To Realisation A/c (Goodwill)	30,000		By Balance b/d	90,000	30,000
To Bank A/c (Final Payment)	1,25,750	95,750	By General Reserve	12,000	12,000
			By Realisation A/c (Gain)	53,750	53,750
	1,55,750	95,750		1,55,750	95,750

 

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	30,000	By Realisation A/c (Creditors + Exp)	99,750
To Cash A/c (Cash balance deposited)	6,000	By Rita’s Capital A/c (Final Payment)	1,25,750
To Realisation A/c (Assets Realised)	2,75,250	By Sobha’s Capital A/c (Final Payment)	95,750
To Loan to Sobha A/c (Received)	10,000
	3,21,250		3,21,250