Question

A, B and C were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On 01-04-2015, they decided to dissolve the firm. On that date A's capital was Rs. 1,25,000, B's capital was Rs. 45,000 and C's capital was Rs. 15,000 (Dr.). The creditors amounted to Rs. 23,150 and cash in hand was Rs. 3,920. The assets realised Rs. 1,44,910 and the expenses of dissolution were Rs. 1,860. Prepare realisation account and show your workings clearly.

Answer 1

BALANCE SHEET as at 1st April, 2015
$\begin{array}{cccc}\text{Capital and Liabilities}& \text{Amount (Rs.)}& \text{Assets}& \text{Amount (Rs.)}\\ \text{Creditors}& 23,150& \text{Cash in hand}& 3,920\\ \text{Capital Accounts:}& & \text{C's Capital (Dr.)}& 15,000\\ A1,25,000& & \text{Sundry Assets (Balancing Figure)}& 1,74,230\\ B\underset{–}{45,000}& 1,70,000& & \\ & \underset{–}{\overline{1,93,150}}& & \underset{–}{\overline{1,93,150}}\end{array}$

$\text{Dr.}\text{REALISATION ACCOUNT}\text{Cr.}$
$\begin{array}{cccc}\text{Particulars}& \text{Amount (Rs.)}& \text{Particulars}& \text{Amount (Rs.)}\\ \text{Sundry Assets}& 1,74,230& \text{Creditors}& 23,150\\ \text{Cash A/c (Creditors paid)}& 23,150& \text{Cash A/c (Assets realised)}& 1,44,910\\ \text{Cash A/c (Expenses)}& 1,860& \text{Capital A/c:}& \\ & & \text{(Loss on Realisation)}& \\ & & A12,472& \\ & & B9,354& \\ & & C\underset{–}{9,354}& 31,180\\ & \underset{–}{\overline{1,99,240}}& & \underset{–}{\overline{1,99,240}}\end{array}$