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

Suggest Corrections

166

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Shanthi and Satya were partners in a firm 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
$\begin{matrix} Liabilities & Amount & Assets & Amount (Rs) & (Rs) Creditors & 45, 000 & Bank & 55, 000 Workmen's Compensation Fund & 65, 000 & Debtors & 40, 000 Saty's Current A/c & 60, 000 & Stock & 85, 000 Capitals : & Furniture & 1, 00, 000 Shanti & 2, 00, 000 & Machinery & 1, 30, 000 Satya & 1, 00, 000 & Shanti's Current A/c & 20, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 50, 000 & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 50, 000 \end{matrix}$

On the above date the firm was dissolved :

(i) 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 realised Rs 80,000.

(ii) An unrecorded investment was sold for Rs 20,000. Machinery was sold at a loss of Rs 60,000.

(iii) Debtors realised Rs 55,000.

(iv) There was an outstanding bill for repairs for which Rs 19,000 were paid. Prepare Realisation Account.

Q. Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decide to dissolve the firm on 31st March, 2019 at which date their Balance Sheet stood as:

Liabilities		Amount (₹)	Assets		Amount (₹)
Bank Loan		1,500	Trademarks		1,200
Creditors for Goods		8,000	Machinery		12,000
Bills Payable		500	Furniture		400
Capital A/cs:			Stock		6,000
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Arjun	6,000	22,000	Less: Provision for Bad Debts	400	8,600
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The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks realised ₹ 800.
(d) Machinery and Stock-in-Trade were taken by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Q. Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2019, the Balance Sheet of the firm was:


Liabilities		Amount (₹)	Assets		Amount (₹)
Sundry Creditors		75,000	Cash		6,000
Bills Payable		30,000	Bank		30,000
Rita's Loan		15,000	Stock		75,000
Reserve		24,000	Book Debts	66,000
Capital A/cs:			Less: Provision for Doubtful Debts	6,000	60,000
Rita	90,000
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The firm was dissolved on the date given above. The following transactions took place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised ₹ 54,000; balance of the Stock was sold at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised ₹ 75,000. Land and Building ₹ 1,20,000.
(e) Rita took the goodwill of the firm at a value of ₹ 30,000.
(f) An unrecorded asset of ₹ 6,900 was handed over to an unrecorded liability of ₹ 6,000 in full settlement.
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Show Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Shanti and Satya were partners in a firm sharing profits in the ratio of 4 :1. On 31st March, 2013 their Balance Sheet was as follows:

Balance Sheet of Shanti and Satya
as at 31st March, 2013

$\begin{matrix} Capital and Liabilities & Amount (Rs.) & Assets & Amount (Rs.) Creditors & 45, 000 & Bank & 55, 000 Workmen's Compensation Fund & 40, 000 & Debtors & 60, 000 Satya's Current Account & 65, 000 & Stock & 85,000 Capitals: & Furniture & 1, 00, 000 Shanti & 2, 00, 000 & Machinery & 1, 30, 000 Satya & 1, 00, 000 & Shanti's Current Account & 20, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 50, 000 - -------- - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 4, 50, 000 - -------- - \end{matrix}$

On the above date the firm was dissolved:

(1) Shanti took over 40% of the stock at 10% less than its 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.

Q. Ashu and Harish are partners sharing profits and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2018. Their Balance Sheet on the above date was:


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Capital A/cs:			Building	80,000
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(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year .
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(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount .
Pass necessary journal entries for dissolution of the firm.

Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit-sharing ratio. Debtors realised for ₹ 46,000, expenses of realisation amounted to ₹ 3,000. Prepare necessary Ledger Accounts.

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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