Question

A, B and C started business on 1st April, 2016 with capitals of Rs. 1,00,000; Rs. 80,000 and Rs. 60,000 respectively sharing profits (losses) in the ratio of 4 : 3 : 3. For the year ended 31st March, 2017, the firm suffered a loss of Rs. 50,000. Each of the partners withdrew Rs. 10,000 during the year.
On 31st March, 2017; the firm was dissolved, the creditors of the firm stood at Rs. 24,000 on that date and Cash in Hand was Rs. 4,000. The assets realised Rs. 3,00,000 and Creditors wrere paid Rs. 23,500 in full settlement of their claims.
Prepare Realisation Account and show your workings clearly.

Answer 1

Realisation Account

Particulars	Amount	Particulars	Amount
To Sundry Assets (working notes 2)	180000	By Sundry Creditors	24000
To Cash A/c (creditors paid)	23500	By Cash A/c (assets realised)	300000
To Profit (transferred to partner's capital a/c) A- 48200 B- 36150 C- 36150	120500
Total	324000	Total	324000

Partner's Capital A/c

Particulars	A	B	C	Particulars	A	B	c
To Cash A/c	118200	91150	71150	By Balance b/d	70000	55000	35000
				By Realisation A/c	48200	36150	36150
Total	118200	91150	71150	total	118200	91150	71150

Cash Account

Particulars	Amount	Particulars	Amount
To Balance b/d	4000	By Realisation A/c (liabilities paid)	23500
To Realisation A/c (assets realised)	300000	By A's Capital A/c	118200
		By B's Capital A/c	91150
		By C's Capital A/c	71150
	304000		304000

Working Notes: 1 Calculation of Partner's Capital
as on 31st March 2017

Particulars	X	Y	Z
Capital as on 1st April, 2016	100000	80000	60000
Less: Drawings	10000	10000	10000
Less: Share of Loss(50000)	20000	15000	15000
Capital as on 31st March,2017	70000	55000	35000

Working Notes: 2 Memorandum Balance Sheet
as on 31st March, 2017

liabilities	Amount	Assets	Amount
Capital A- 70000 B- 55000 C- 35000	160000	Cash in Hand	4000
Creditors	24000	Sundry Assets (Balancing figure)	180000
Total	184000	Total	184000