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Question

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013, their Balance Sheet was as follows:
Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 1,70,000 Bank 1,10,000
Workmen Compensation Reserve 2,10,000 Debtors 2,40,000
General Reserve 2,00,000 Stock 1,30,000
Ramesh's Current Account 80,000 Furniture 2,00,000
Capital A/cs: Machinery 9,30,000
Ramesh 7,00,000 Umesh's Current Account 50,000
Umesh 3,00,000 10,00,000
16,60,000 16,60,000

On the above date the firm was dissolved.
(a) Ramesh took over 50% of stock at ₹ 10,000 less than book value. The remaining stock was sold at a loss of ₹ 15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
(c) Creditors were paid in full.
(d) There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000.
Prepare Realisation Account.

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Solution

Realisation Account

Dr.

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Sundry Assets-

Creditors

1,70,000

Debtors

2,40,000

Ramesh’s Current A/c (Stock)

55,000

Stock

1,30,000

Cash A/c (Assets Realised)

Furniture

2,00,000

Stock

50,000

Machinery

9,30,000

15,00,000

Machinery

4,50,000

Debtors

2,28,000

7,28,000

To Cash A/c (Liabilities)

Umesh’s Current A/c (Furniture)

50,000

Creditors

1,70,000

Outstanding Bill

1,40,000

3,10,000

Realisation Loss

Ramesh’s
Current A/c

5,64,900

Umesh’s Current A/c

2,42,100

8,07,000

18,10,000

18,10,000


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