A and B shared profits in the ratio of 7 : 3. They dissolved the partnership and appointed A to realise the assets. A is to receive 6% commission on the amount realised from stock, Debtors, B/R and Shares

A and B shared profits in the ratio of 7 : 3  They dissolved the partnership and appointed A to realise the assets. A is to receive 6% commission on the amount realised from stock, Debtors, B/R and Shares. The position of the firm was as follows:

Liabilities	₹	Assets	₹
Creditors	60,000	Plant and Machinery	20,000
Repairs and Renewals Reserve	4,000	Prepaid Insurance	1,200
Bank Loan	20,000	Stock	60,000
A’s Capital A/c B’s Capital A/c	50,000 20,000	100 Shares in D.C.M Ltd	5,000
		Sundry Debtors	38,000
		B/R	6,000
		Cash at Bank	8,800
		A’s Drawings	5,000
		Advertisement Suspense A/c	10,000
	1,54,000		1,54,000

  Information:

1. A realised the assets as follows:- Full amount from Sundry Debtors and B/R except from one for ₹ 2,000 being insolvent. Stock realised ₹ 52,000; Shares in D.C.M were sold for ₹ 60 each.
2. Half the trade creditors accepted plant and machinery at an agreed valuation of 10% less than the book value and cash of ₹ 7,000 in full settlement of their claims.
3. Remaining creditors were paid off at a discount of 10%. Expenses of realisation amounted to ₹ 700.
4. On quarter’s tax amounting to ₹ 1,500 was due and had to be paid.
5. There was a contingent liability amounting to ₹ 13,000. It was settled for ₹ 6,000.
6. Bank Loan was discharged along with interest due for two months @ 18% p.a.

Prepare necessary accounts. [Ans. Loss on Realisation ₹ 15,000; Amount paid to A ₹ 33,500 and B ₹ 12,500; Total of Bank A/c ₹ 1,08,800.]