Question

Prashant and Rajesh were partners in a firm sharing profit and losses in the ratio of 3:2. They decided to dissolve the partnership firm on 31st March 2020 . Prashant was deputed to realise the assets and pay the liabilities. He was paid rupees 1000 as commission for his services. The financial position of the firm on 31st March 2020 was as follows:

Liabilities Amount Assets. Amount

Crediors. 80,000 Building. 12,000

Mrs. Prashant's loan. 40,000 Investments. 30,600

Rajesh's loan. 24,000 Debtors. 34,000

Less: prov.. 4000



30,000

Investment fluctuation fund 8,000 Bills receivable 37,400

Capitals:.

Prashant.

Rajesh

42,000

42,000 Cash. 6,000

Profit and loss account. 8,000

Goodwill 4,000

2,36,000 2,36,000



Following was agreed upon:

a) Prashant agreed to pay his wife's loan.

b) Debtors relised rupees 24000.

c) Rajesh took away all Investments at rupees 27000

d) Building relised rupees 152000.

e) Creditors were payable after 2 months.they were paid immediately at 10% discount.

f) Bills receivable were settled at a loss of rupees 1400

g) Realisation expenses amounted to rupees 2500

Prepare realisation account partners capital account and cash account to close the books of firm.​

Answer 1

see below the attachment for full explanation -

Answer 2

Following are the accounts for this question:

                                              Realization account

Particulars                         Amount        Particulars                          Amount

To building                       1,20,000         By provision on debtors     4,000

To investment                   30,600          By creditors                         80,000

To debtors                        34,000           By Mrs. Pradeep's loan      40,000

To bills receivable            37,400           By Investment fluctuation

To goodwill                         4,000                fund                                  8,000

To Pradeep's capital a/c  40,000          By bank a/c :

To bank a/c (expenses)    2,500            Debtors            12,000

To bank a/c (creditors)     59,000          Building         1,52,000

To Pradeep's capital a/c   1,000            Bill receivable  36,000__2,00,000

To partner's capital a/c's:                        By cash a/c                       27,000

Pradeep: 18,300

Rajesh:    12,200_______30,500

Total                                  3,59,000                                                 3,59,000  

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                                                   Bank/Cash account

Particulars                         Amount    Particulars                              Amount

To balance b/d                  6,000        By realization a/c                   2,500

To realization a/c            2,00,000     By realization a/c                  59,000

To realization a/c             27,000        By balance c/d                     1,71,500

Total                                 2,33,000                                                  2,33,000

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