Question

H and J were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2018 their Balance Sheet was as follows :

BALANCE SHEET OF H AND J

as on 31st March, 2018

$\begin{array}{cccc}\text{Liabilities}& \text{Amount}& \text{Assets}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{Creditors}& 1,50,000& \text{Bank}& 2,00,000\\ \text{Workmen Compensation Fund}& 3,00,000& \text{Debtors}& 3,40,000\\ \text{General Reserve}& 75,000& \text{Stock}& 1,50,000\\ \text{H's Current A/c}& 25,000& \text{Furniture}& 4,60,000\\ \text{Captial :}& & \text{Machinery}& 8,20,000\\ \text{H}& 10,00,000& \text{J's Current A/c}& 80,000\\ \text{J}& 5,00,000& & \\ & 20,50,000& & 20,50,000\end{array}$

On the above date the firm was dissolved.

(i) Debtors were realised at a discount of 5 $\%$. 50$\%$ of the stock was taken over by H at 10$\%$ less than the book value. Remaining stock was sold for Rs 65,000.

(ii) Furniture was taken over by J for Rs 1,35,000. Machinery was sold for Rs 7,40,000.

(iii) Creditors were paid in full.

(iv) Expenses on realisation Rs 8,000.

Prepare Realisation Account.

Answer 1

REALISATION ACCOUNT

Dr. Cr.
$\begin{array}{cccc}\text{Particulars}& \text{Amount}& \text{Particulars}& \text{Amount}\\ & \left(\text{Rs}\right)& & \left(\text{Rs}\right)\\ \text{To Debtors}& 3,40,000& \text{By Creditors}& 1,50,000\\ \text{To Stock}& 1,50,000& \text{By Bank A/c}:& \\ \text{To Furniture}& 4,60,000& \text{Debtors}3,23,000& \\ \text{To Machinery}& 8,20,000& \text{Stock}65,000& \\ \text{To Bank A/c}:& & \text{Machinery}\underset{–}{7,40,000}& 11,28,000\\ \text{Creditors}1,50,000& & \text{By H's Capital A/c}& 67,500\\ \text{Realisation Expenses}\underset{–}{8,000}& 1,58,000& \left(\text{Stock taken over}\right)& \\ & & \text{By J's Capital A/c}& 1,35,000\\ & & \left(\text{Furniture taken over}\right)& \\ & & \text{By Loss A/c:}& \\ & & \text{H}2,98,333& \\ & & \text{J}\underset{–}{1,49,167}& 4,47,500\\ & 19,28,000& & 19,28,000\end{array}$