Question

Kumar and Gaurav were partners in the firm in a sharing profit in the ratio of their capitals. On 31st March 2013 their Balance Sheet was as follows:

Balance Sheet of Kumar and Gaurav as on 31st March 2013
Liabilities	Amount Rs	Assets	Amount Rs
Creditors Workman Compensation Fund Satya’s Current Account Capital’s:    Kumar        1,50,000    Gaurav       1,00,000	80,000 25,000 24,000     2,50,000	Bank Debtors Stock Machinery Shanti’s Current Account	79,000 1,70,000 34,000 79,000 17,000
	3,79,000		3,79,000

On the above date the firm was dissolved:

1. Kumar took over 50% of stock at 10% less than its book value. The remaining stock was sold for Rs 10,000.
2. Debtors were realized at a discount of 5%.
3. An unrecorded asset was sold for Rs 9,000 and machinery was sold for Rs 18,000.
4. Creditors were paid in full.
5. There was an outstanding bill for repairs for amounting to Rs 14,000 which was settled at Rs 12,000.

Prepare Realisation Account

Answer 1

Realisation Account
Dr.			Cr.
Particulars	Rs	Particulars	Rs
To Sundry Asset:    Debtors         1,70,000    Stock               34,000   Machinery          79,000     To Cash A/c (Liabilities)     Creditors           80,000    Outstanding Bill   12,000	2,83,000         92,000	By Creditors A/c By Shanti’s Current A/c (stock) By Cash A/c (Assets Realised)   Stock                            10,000   Unrecorded Investment     9,000   Machinery                       18,000   Debtors                       1,61,500   By Realisation Loss trfd    Kumar’s Current A/c    48,720   Gaurav’s Current A/c    32,480	80,000 15,300         1,98,500       81,200
	3,75,000		3,75,000

Note: In this case, the partners share profit in the ratio of their capitals i.e. 3:2.