0

Harsh, Swarn and Tarun were in a partnership sharing profits and losses equally. Their Balance Sheet as at 31st March, 2022 was as under:

Liabilities Assets

Capital A/cs:

Harsh

Swarn

Tarun

Creditors

Bills Payable

1,00,000

1,00,000

1,00,000

90,000

10,000

Machinery

Furniture

Debtors

Investments

Bills Receivable

Stock

Cash at Bank

80,000

50,000

20,000

60,000

10,000

1,00,000

80,000

  4,00,000   4,00,000

Investments had market value of ₹ 90,000 which were held to be sold to enable the settlement of accounts with partner’s estate in case of death of a partner the continuance of the firm.

On 1st April, 2022 It was decided that the firm would be dissolved, subject to the following adjustments:

(i) Investments were sold and amount realised was ₹ 90,000.

(ii) Machinery realised at 70% of the book value.

(iii) Furniture was taken by Tarun at a market value of ₹ 40,000.

(iv) Bills Receivable and Debtors had to be discounted at 5%.

(v) Stock comprised:

(a) Easily Marketable Items: 70% of the total inventory which were realised in full.

(b) Obsolete Items: 10% of the total inventory which had to be discarded.

(c) Rest of the items in the Stock realised 50% of their book value.

(vi) A liability of ₹ 2,500 which had not been recorded in the books of the firm had to be settled by the firm before its dissolution.

You are required to prepare Realisation Account.

Anurag Pathak Changed status to publish February 10, 2024
Add a Comment