A, Band Care partners in a firm sharing profits and losses in the ratio of 2: 2: 1. They
decided to dissolve the firm and appointed B to realise the assets and pay the
liRs.bilities. He is to get 5% commission on amount finally paid to other partners as
capital. He was also to bear the expenses of realisation. Their balance sheet on this
date stood as under: ·
B realised the assets as follows:
(i) Debtors and Bills Receivable were falling due for payment after 2 months so B
realised them at a discount of 6% p.a.
(ii) Creditors and Bills payable were falling due after 3 months so they were..,. paid
at a discount of 12% p.a.
(iii) B took over the investments at a discount of 10%.
(iv) Stock materialisedRs. 38,000 and plantRs. 55,000 while furniture fetched only t
10,000 and nothing is recovered from prepaid expenses paid.
(v) Provident fund materialised at 12,000, Commission received in advance was
returned and salary outstanding not recorded was also paid 1,000.
(vi) Realisation expenses were 800.
Prepare necessary accounts to close the books of accounts.
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