Question

Sunny and Bobby were partners in a firm sharing profits and losses in the ratio of 3 : 2, their balance sheet as at 31st March, 2012:

Liabilities		Amount	Assets		Amount
Creditors		1,90,000	Bank		5,000
Bills Payable		1,10,00	Fixed Deposits		70,000
Employees provident fund		50,000	Stock		86,000
Mrs. Sunny’s Loan		55,000	Investments		1,04,000
Bobby’s Loan		85,000	Debtors	1,77,000	1,65,000
Investment Fluctuation Fund		30,000	(-) Provision for D/D	12,000
Capitals:		3,40,000	Other Fixed Assets		3,80,000
Sunny	2,20,000		Deferred Revenue Expenditure		35,000
Bobby	1,20,000		Sunny’s Loan		15,000
		8,60,000			8,60,000

The firm was dissolved on 31st March, 2012. The assets were realized and the liabilities were paid as under:

1. Sunny promised to pay off Mrs. Sunny’s Loan.
2. Bobby took away stock at 20% discount and 80% of the investments at 10% discount.
3. Dharam, a debtor of Rs. 60,000, had to pay the amount due 2 months after the date of dissolution. He was allowed a discount of 9% p.a. for making immediate payment.
4. Creditors were paid Rs. 1,75,000 in full settlement of their claim.
5. 90% of Other fixed assets realised Rs. 1,98,000 and remaining were realised at discount of 15%.
6. Balance of investments were sold at 75% value and Fixed Deposits were realised at 110%.
7. There was an old furniture which has been written off completely from the books; Bobby took away the same for Rs. 41,000 against his loan and balance to him was given in cash.
8. Realisation expenses Rs. 20,000 were paid by Sunny and Bobby equally on behalf of the firm.

You are required to prepare Realisation A/c.

Answer 1

Dr.	Realisation Account				Cr.
Particulars		Amount	Particulars		Amount
To Fixed Deposits		70,000	By Provision for Doubt. Debts		12,000
To Stock		86,000	By Bills Payable		1,10,000
To Investments		1,04,000	By Creditors		1,90,000
To Debtors		1,77,000	By Employees provident fund		50,000
To Other fixed assets		3,80,000	By Mrs. Sunny's Loan		55,000
To Sunny's Capital A/c (Loan repaid)		55,000	By Investment fluctuation fund		30,000
To Bank A/c		3,35,000	By Bank A/c		4,99,000
Creditors	1,75,000		Debtors	1,76,100
Bills Payable	1,10,000		Other Fixed assets	2,30,300
Employees provident fund	50,000		Investments	15,600
To Sunny's Capital A/c – Expense		10,000	Fixed deposits	77,000
To Bobby's Capital A/c – Expense		10,000	By Bobby's Capital A/c		1,43,680
			By Bobby's Loan A/c		41,000
			By Partners Capital A/c - Loss on real.		96,320
			Bobby	57,792
			Sunny	38,528
		12,27,000			12,27,000