Question

P,Q and R share profits in proportion of ½, ¼ and 1/4 . On the date of dissolution their

Balance sheet was as follows.

Liabilities Rs Assets Rs

Creditors 14,000 Sundry assets 40,000

P’s capital 10,000

Q’s capital 10,000

R’s capital 6,000

40,000 40,000

The assets realized Rs. 35,500. Creditors were paid in full. Realization expenses amounted to

Rs.15,000. Close the books of the firm.​

Answer 1

Answer:

                                                 Realization Account-

Particulars                      Amt                         Particulars                        Amt

To Sundry Asset            40,000                 By Creditors                     14,000

To Cash(Creditors paid) 14,000                By Cash(Asset realised)      35,500

To cash(Realisation Exp) 15,000               By Partner's Capital Account

                                                                    P's Cap. Acc                          9750                

                                                                    Q's Cap. Acc                          4875

                                                                    R's Cap. Acc                          4875

Total                                  69000               Total                                    69000

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