Shanti and Satya were partners in firm in a sharing profit in the ratio of 4:1. On 31st march ,2013 their Balance Sheet was as follows:
Balance Sheet of Shanti and Satya as on 31st March, 2013
Workman Compention Fund
Satya’s Current Account
Shanti’s Current Account
On the above date the firm was dissolved:
1. Shanti took over 40% of the stock at 10% less than its book value and the remaining stock was sold for Rs.40,000. Furniture realized Rs.80,000.
2. An unrecorded investment was sold for Rs.20,000. Machinery was sold at a loss of Rs.60,000.
3. Debtors realized Rs.55,000.
4. There was an outstanding bill for repairs for which Rs.19,000 were paid.
Prepare Realisation Account.
To Sundry Asset
To Cash A/c (Liabilities)
Outstanding Bill 19,000
By Creditors A/c
By Shanti’s Current A/c (stock)
By Cash A/c (Assets Realised)
Unrecorded Investment 20,000
By Realisation Loss
Shanti’s Current A/c 78,720
Satya’s Current A/c 19,680
Video Tutorials For All Subjects
- Dissolution of a Partnership Firm - Preparation of Realization Account, and Other Related Accounts