The expenses incurred for realisation of assets and liabilities is called expenses.
If total assets are Rs. 5,00,000; total liabilities are Rs. 1,00,000; amount realised on sale of assets is Rs. 4,20,000 and realisation expenses are Rs. 5,000, what will be the profit or loss on realisation?
Give the necessary journal entries in each of the following alternative cases :
(i) Realisation expenses amounted to Rs. 500.
(ii) Realisation expenses paid by the firm amounted to Rs. 500 and the partner has to bear the realisation expenses.
(iii) 'A' one of the partners was to bear all the realisation expenses for which he was given a commission of 2% of net cash realised from dissolution. Cash realised from assets was Rs 25,000 and cash paid for liabilities amounted to Rs 5,000
Realisation expenses to be borne by Rashim for which he will be paid Rs. 70,000 as remuneration for completing the dissolution process. The actual expenses incurred by Rashim were 1,20,000. How will you deal with realisation expenses of the firm of Rashim and Bindiya-