Following is the balance sheet of P, Q and R who were sharing profits and losses in the ratio of 3 : 2 : 1

Following is the balance sheet of P, Q and R who were sharing profits and losses in the ratio of 3 : 2 : 1.

Liabilities	₹	Assets	₹
Bank Overdraft	12,000	Debtors 20,000 Less: Provision 1,200	18,800
Creditors	70,000	Stock	40,000
Mrs. P’s Loan	25,800	3,000 Shares in ‘A’ Ltd.	30,000
Capital Accounts: P Q R	1,20,000 95,000 5,000	Motor Car	75,000
		Plant	80,000
		Advertisement Suspense A/c	84,000
	3,27,800		3,27,800

  The firm was dissolved on that date and the following arrangements were made: (i) Assets realised as follows: Debtors ₹ 15,000; Plant and 30% discount. (ii) Stock was valued at ₹ 36,000 and this was taken over by P and Q equally. (iii) Market value of the shares of A Ltd. is ₹ 16 per share. Half the shares were sold in the market and the balance half were taken over by P and Q in their profit sharing ratio. (iv) A creditor for ₹ 50,000 took over Motor Car in full settlement of his claim and the balance of creditors were paid at a discount of 2%. (v) Expenses of realisation amounted to ₹ 6,000. P agreed to discharge his wife’s Loan. Prepare Journal entries and Ledger accounts. [Ans. Loss on Realisation ₹ 44,400. R brings in ₹ 16,400; Final Payment to P ₹ 49,200 and Q ₹ 24,600. Total of Bank A/c ₹ 1,11,400.]