Question

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

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

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.

Answer 1

$\text{Dr.}\text{REALISATION ACCOUNT}\text{Dr.}$
$\begin{array}{cccc}\text{Particulars}& \text{Amount (Rs.)}& \text{Particulars}& \text{Amount (Rs.)}\\ \text{Debtors A/c}& 60,000& \text{Creditors A/c}& 45,000\\ \text{Stock A/c}& 85,000& \text{Shanti's Current A/c (stock)}& 30,600\\ \text{Furniture A/c}& 1,00,000& \text{Bank A/c (Assets Realised)}& \\ \text{Machinery A/c}& 1,30,000& \text{Stock}40,000& \\ \text{Bank A/c:}& & \text{Furniture}80,000& \\ \text{Outstanding Bill}19,000& & \text{Investment}20,000& \\ \text{Creditors}\underset{–}{45,000}& 64,000& \text{Machinery}70,000& \\ & & \text{Debtors}\underset{–}{55,000}& 2,65,000\\ & & \text{By Loss transferred to:}& \\ & & \text{Shanti's Current A/c}78,720& \\ & & \text{Satya's Current A/c}\underset{–}{19,680}& 98,400\\ & \underset{–}{\overline{4,39,000}}& & \underset{–}{\overline{4,39,000}}\end{array}$