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Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2023, the Balance sheet of the firm was:

Liabilities Assets
Sundry Creditors

Bills Payable

Loan by Rita

General Reserve

Capital A/cs:

Rita

Sobha

75,000

30,000

25,000

24,000

90,000

30,000

Cash

Bank

Stock

Book Debts
Less: Provision for Doubtful Debts

Plant and Machinery

Land and Building

Loan to Sobha

 

 

 

66,000
6,000

6,000

30,000

75,000

60,000

45,000

48,000

10,000

2,74,000 2,74,000

The firm was dissolved on the date given above. The following transactions took place:

(a) Rita took 25% of the stock at a discount of 20% in settlement of her loan.

(b) Book debts realised ₹ 54,000.

(c) Sundry Creditors were paid out at a discount of 10%. Bills payable were paid in full.

(d) Land and Building realised ₹ 1,20,000.

(e) Rita took the goodwill of the firm at a value of ₹ 30,000.

(f) An unrecorded asset of ₹ 6,900 was given in settlement of unrecorded liability of ₹ 6,000 in full settlement.

(g) Realisation Expenses were 5,250.

Show Realisation Account, Partner’s Capital Accounts and Bank Account in the books of the firm.

[Ans.: Gain (profit) on Realisation – ₹ 1,04,500; Amount paid to Rita – ₹ 1,24,250; Sobha – ₹ 94,250; Total of Bank Account – ₹ 3,21,250.]

Anurag Pathak Changed status to publish December 30, 2023
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