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Desh, Prem and Azad carrying on business and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2022 on which date their Balance Sheet was as follows:

Liabilities Assets  

Sundry Creditors

Bills Payable

Bank Loan

General Reserve

Investments Fluctuation Reserve

Capital A/cs:

Desh

Prem

Azad

41,500

20,000

40,000

50,000

40,000

75,000

75,000

15,000

Cash at Bank

Stock

Debtors

Less: PDD

Investments

Premises

 

 

50,000

2,500

22,500

80,000

 

47,500

55,000

1,51,500

  3,56,500     3,56,500

Following transactions took place at the time of dissolution:

(i) A bill for ₹ 5,000 received from Mohan discounted from bank is not met on maturity. Mohan proved insolvent and a dividend of 50% was received from his estate.

(ii) The assets except Cash at Bank and Investments were sold to a company which paid ₹ 3,25,000 in cash. The Investments were sold and ₹ 56,500 were received.

(iii) Sundry Creditors (including Bills Payable) were paid ₹ 57,500 in full settlement.

(iv) Realisation Expneses were ₹ 15,000.

Prepare Realisation Account, Partner’s Capital Accounts and Bank Account.

Anurag Pathak Changed status to publish February 10, 2024
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