Question

Sohan and Rohan decided to dissolve their firm and convert it into an Ltd company. Their assets were Rs.2,20,000 and trade liabilities Rs.60,000. Purchase price is agreed at Rs.1,80,000. Expenses amounted to Rs.10,000, paid by the firm. Calculate realisation profit or loss from realisation A/C.​​

Answer 1

Given,

• Assets=Rs2,20,000,

• Trade liabilities Rs.60,000,

• Purchase Rs.1,80,000,

• Expenses amounted to Rs.10,000, paid by the firm.

To find,

The realization profit or loss from realization A/c.

Solution,

Prepare Realization A/c to find out the profit or loss-

                               Realization A/c as on.

Particulars             Amount(Rs)               Particulars          Amount(Rs)

Assets                    2,20,000                  Trade liabilites      60,000

Payment of                                             By assets realized  180000

liabilites              

1. Expenses        10,000                        

To profit transferred 10,000

to Sohan and Rohan                            

Total                         240000                                                  240000

Hence, Sohan and Rohan earned a profit of Rs.10000.