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Amar, Akbar and Antony were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2022 was as follows:

Liabilities Assets  

Capital A/cs:

Amar

Akbar

Antony

Loan by Amar

Reserve Fund

Sundry Creditors

 

24,000

20,000

15,000

7,000

5,000

9,000

Land

Plant

Less: Accumulated Depreciation

Loose Tools

Stock

Sundry Debtors

Less: PDD

Cash at Bank

 

17,000

1,000

 

 

30,000

2,000

8,000

 

16,000

3,000

20,000

 

28,000

5,000

  80,000     80,000

The partners decided to dissolve the firm with effect from 1st April, 2022. In order to give effect to this decision, draw up Realisation Account, Partner’s Capital Accounts and the Bank Account, after taking into consideration the following:

(i) Amar agreed to take over part of the business for which he agreed to pay ₹ 10,000 for Goodwill, which had not been previously valued.

(ii) Amar also took over Land at book value and Plant at ₹ 12,000.

(iii) Losse Tools, Stock and Sundry Debtors realised ₹ 2,000; ₹ 15,000; and ₹ 22,000 respectively.

(iv) Sundry Creditors were paid off at a discount of 10%.

(v) Expenses of Realisation were ₹ 1,500.

(vi) A contingent liability of ₹ 1,000 which occurred during the period was duly paid-off.

Anurag Pathak Changed status to publish February 11, 2024
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