Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows:
Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Trade Creditors
Employee’s Provident Fund Mrs. Ashish’s Loan Kanav’s Loan Workmen’s Compensation Fund Investment Fluctuation Reserve Capitals: Ashish Kanav |
42,000 60,000 9,000 35,000 20,000 4,000 1,20,000 80,000 |
Bank
Stock Debtors Furniture Plant Investments Profit & Loss A/c |
35,000 24,000 19,000 40,000 2,10,000 32,000 10,000 |
| 3,70,000 | 3,70,000 |
On the above date they decided to dissolve the firm.
(a) Ashish agreed to take over furniture at ₹ 38,000 and pay Mrs. Ashish’s Loan.
(b) Debtors realised ₹ 18,500 and plant realised 10% more.
(c) Kanav took over 40% of the stock at 20% less than book value. Remaining stock was sold at a gain of 10%.
(d) Trade creditors took over investments in full settlement.
(e) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of ₹ 12,000 and to bear realisation expenses. Actual expenses of realisation amounted to ₹ 8,000.
Prepare Realisation Account.
[Ans.: Gain (profit) on Realisaiton – ₹ 20,020.]
Anurag Pathak Changed status to publish July 31, 2023
