Pawan and Arun are partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their firm on 31st March, 2023, when their Balance Sheet was as follows:

Liabilities Assets
Capital A/cs: Pawan Arun Sundry Creditors Profit and Loss A/c 17,500 10,000 2,000 1,500 Freehold Property Investments Sundry Debtors Stock Bank Cash 16,000 4,000 2,000 3,000 2,000 4,000
  31,000   31,000

The partners decided to dissolve the firm on the above date. Other assets were realised as follows:

Freehold Property ₹ 18,000; Sundry Debtors ₹ 1,800; Stock ₹ 2,600.

Creditors of the firm agreed to accept 5% less. Expenses on Realisation on assets were ₹ 400. There was a printer in the firm which was not shown in the above Balance Sheet. The Printer is now sold for ₹ 1,000.

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

Anurag Pathak Answered question June 21, 2024
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