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C, D and E were partners in a firm sharing profits in the ratio of 3 : 1 : 1. Their Balance Sheet as at 31st March, 2022 was as follows:

Balance sheet of C, D and E as at 31st March, 2022

Liabilities Assets

Capital A/cs:

C

D

E

C’s Loan

Sundry Creditors

Bills Payable

4,00,000

2,00,000

1,00,000

1,20,000

1,00,000

2,00,000

Machinery

Investments

Stock

Debtors

Cash at Bank

3,20,000

3,00,000

2,00,000

1,00,000

2,00,000

  11,20,000   11,20,000

On the above date, the firm was dissolved due to certain disagreement among the partners.

(I) Machinery of ₹ 3,00,000 were given to creditors in full settlement of their account and remaining machinery was sold for ₹ 10,000.

(ii) Investments realised ₹ 2,90,000.

(iii) Stock was sold for ₹ 1,80,000.

(iv) Debtors for ₹ 20,000 proved bad.

(v) Realisation expenses amounted to ₹ 10,000.

Prepare Realisation Account.

[Ans.: Loss on Realisation – ₹ 2,70,000.]

Anurag Pathak Answered question June 10, 2024
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