2

Realisation A/c
Particulars Amt. Particulars Amt
A, B and C were partners sharing profits and
losses in the ratio of 2 : 2 : 1. Their balance
Sheet as at 31st March, 2018 was as follows:

Liabilities Amt. Assets Amt.

Capital A/c’s Cash at Bank 3,00,000
A 7,50,000 Deb. 1,95,000
B 3,00,000 (-) Prov.(5,000) 1,90,000
C 2,50,000 13,00,000 Stock 3,00,000
Creditors 2,00,000 Fixed Assets 7,10,000
15,00,000 15,00,000

On the above date, they dissolved the firm and

following amounts were realised:
Fixed Assets ₹ 6,75,000; Stock ₹ 3,39,000;
Debtors ₹ 1,35,000; Creditors were paid ₹
1,85,000 in full settlement of their claim.
Expanses on realisation amounted to ₹ 19,000.
Prepare Realisation A/c.
 Realisation A/c
Particulars Amt. Particulars Amt.
Debtors 1,95,000 Creditors 2,00,000
Stock 3,00,000 Provision for DD 5,000
Fixed Assets 7,10,000
Cash/ Bank
Cash/ Bank Debtors 1,35,000
Creditors 1,85,000 Stock 3,39,000
Real. Exp 19,000 Fixed Assets 6,75,000

Loss Transfer to
Capital A/c
A 22,000
B 22,000
C 11,000 55,000
14,09,000 14,09,000
3
A and B were partners in a firm sharing profits in the ratio of 3 : 2. On 31st
March, 2011, the balance sheet of the firm was as follows

Liabilities Amt. Assets Amt.

Sundry Creditors 1,17,000 Building 2,40,000
Capital A/c’s Furniture 1,75,000
A 3,00,000 Debtors 80,000
B 2,00,000 Stock 75,000
Cash 47,000

6,17,000 6,17,000
The firm was dissolved on 1st April, 2011 and the assets and liabilities were
settled as follows
(i) Building was taken over by creditors as their full and final payment.
(ii) Furniture was taken over by B for cash payment at 5% less than the
book value.
(iii) Debtors were collected by a debt collection agency at a cost of f5,000.
(iv) Stock realised ₹ 70,500.
(v) B agreed to bear all realisation expenses. For this service, B is paid ₹
500. Actual expense on realisation amounted to ₹ 1,000.
Pass necessary journal entries for dissolution of the firm.
 Realisation A/c
Particulars Amt Particulars Amt
To Sundry Assets By Creditors A/c 1,17,000
Building 2,40,000 By Cash A/c
Furniture 1,75,000 Furniture 1,66,250
Debtors 80,000 Debtors 75,000
Stock 75,000 Stock 70,500 3,11,750
To B’s Capital (Exp) 500 By Loss transferred to
A 85,050
B 56,700 1,41,750

5,70,500 5,70,500
4
A and B were equal partners in a firm. They decided to dissolve the
partnership on 31st December, 2018. Their financial position was as follows:
₹ ₹
Creditors 2,700 Cash at Bank 3,000
General Reserve 3,000 Debtors 1,000
B’s loan A/c 3,000 Plant 4,700
Capital A/cs: Stock 15,000
A: 12,000 Building 6,000
B: 13,000 24,000 Furniture 3,000
32,700 32,700

Building was sold for ₹ 6,300. Furniture for ₹ 3,300 and stock for ₹ 13,800.
Debtors realised only ₹ 800 and plant realized ₹ 4,800. Creditors were paid
₹ 2,600 in full statement. Expenses of realisation amounted to ₹ 500.
Prepare Realisation Account.
 REALISATION ACCOUNT
Dr. Cr.
₹ ₹
To Debtors A/c 1,000 By Creditors 2,700
To Plant A/c 4,700 By Bank A/c 29,000
To Stock A/c 15,000 By Loss transferred to
To Building A/c 6,000 A’s Capital A/c 550
To Furniture A/c 3,000 B’s Capital A/c 550

To Bank A/c 2,600

Creditor 2,600
Realisation Exp. 500 3,100
32,800 32,800
5 C, D and E were partners in a firm sharing profits in the ratio of 3:1:1. Their Balance
Sheet as at 31st March,
2022 was as follows:
Liabilities Assets
Sundry Creditors 1,00,000 Cash at Bank 2,00,000
Bills Payable 2,00,000 Investment 3,00,000
C's Loan 1,20,000 Stock 2,00,000
Capital A/cs: Debtors 1,00,000
C 4,00,000 Machinery 3,20,000
D 2,00,000
E 1,00,000

11,20,000 11,20,000
On the above date, the firm was dissolved due to certain disagreement among the
partners:
(i) Machinery of Rs. 3,00,000 were given to creditors in full settlement of their
account and remaining machinery was sold for Rs. 10,000.
(i) Investments realized Rs. 2,90,000.
(iii) Stock was sold for 1,80,000.
(iv) Debtors for 20,000 proved bad.
(V) Realisation expenses amounted to Rs. 10,000.
Prepare Realisation Account.
 REALISATION ACCOUNT

Amt. Amt.
To Machinery 3,20,000 By Sundry Creditors 1,00,000
To Investment 3,00,000 By Bills Payable 2,00,000
To Stock 2,00,000 By Bank A/c
To Debtors 1,00,000 Machinery 10,000
To Bank A/c: Investment 2,90,000
Bills Payable 2,00,000 Stock 1,80,000
Realisation exp. 10,000 2,10,000 Debtors 80,000 5,60,000
To Loss transferred to:
C's Capital A/c 1,62,000
D's Capital A/c 54,000
E's Capital A/c 54,000

4,41,250 4,41,250
6
A and B decided to dissolve their business on 31st December, 2018. On
that date their Balance Sheet stood as follows:
BALANCE SHEET

Liabilities ₹ Assets ₹
Creditors 12,000 Cash 2,000
A’s Loan 16,000 Debtors 10,000
Capital A/cs: Stock 40,000
A: 12,000 Plant 20,000
B: 13,000 24,000 Fixtures 8,000
Goodwill 8,000
88,000 88,000
Partners sharing profits and losses in the ratio of capital. Sundry debtors
realized ₹ 7,400; Stock ₹ ₹ 37,000; plant and fixtures realized 80% of
their books value and goodwill realized ₹ 12,000. Creditors paid off at 5%
discount and cost of dissolution amounted to ₹ 1,200. Prepare Realisation
Account.
 REALISATION ACCOUNT

Dr. Cr.
₹ ₹
To Debtors A/c 10,000 By Creditors 12,000
To Stock A/c 40,000 By Cash A/c 78,800
To Plant A/c 20,000 (Assets Realised)
To Fixtures 8,000 By Capital A/c:
To Goodwill 8,000 A 5,200
To Cash A/c B 2,600 7,800
Creditor 11,400
Dissolution Exp. 1,200 12,600

98,600 98,600
7 Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals.
On 31st March, 2013, their balance sheet was as follows

Liabilities Amt. Assets Amt.

Sundry Creditors 1,50,000 Bank 2,80,000
Workmen’s Compensation Fund 3,00,000 Debtors 3,40,000
General Reserve 75,000 Stock 1,50,000
Capital A/c’s Furniture 4,60,000
Hanif 10,25,000 Machinery 8,20,000
Jubed 5,00,000

20,50,000 20,50,000

On the above date, the firm was dissolved

(i) Debtors were realised at a discount of 5%. 50% of the stock was taken over by
Hanif at 10% less than the book value. Remaining stock was sold for ₹ 65,000.
(ii) Furniture was taken over by Jubed for ₹ 1,35,000. Machinery was sold as scrap for
₹ 74,000.
(iii) Creditors were paid in full.
(iv) Expenses on realisation ₹ 8,000 were paid by Hanif. Prepare realisation account.
 REALISATION ACCOUNT
Dr. Cr.
₹ ₹
To Debtors A/c 3,40,000 By Creditors 1,50,000
To Stock A/c 1,50,000 By Cash A/c
To Furniture 4,60,000 Debtors 3,23,000
To Machinery 8,20,000 Stock 65,000
To Cash A/c (Creditors) 1,50,000 Machinery 74,000 4,62,000
To Hanif’s Capital A/c 8,000 By Hanif’s Capital A/c (Stock) 67,500
(Realisation Exp.) By Jubed Capital A/c (Furniture) 1,35,000
By Capital A/c:
Hanif 7,42,333
Jubed 3,71,167 11,13,500

19,28,000 19,28,000
8
Shanti and Satya were partners in a firm sharing profits in the ratio of 4 : 1. On
31st March, 2013, their balance sheet was as follows

Liabilities Amt. Assets Amt.

Sundry Creditors 45,000 Bank 75,000
Workmen’s Compensation 40,000 Debtors 60,000
Fund
Capital A/c’s Stock 85,000
Shanti 2,00,000 Furniture 1,00,000
Satya 1,65,000 Machinery 1,30,000

4,50,000 4,50,000

On the above date, the firm was dissolved

(i) Shanti took over 40% of the stock at 10% less than its book value and the
remaining stock was sold for ₹ 40,000. Furniture realised ₹ 80,000.
(ii) All unrecorded investment was sold for ₹ 20,000. Machinery was sold at a loss
of ₹ 60,000.
(iii) Debtors realised ₹ 55,000.
(iv) There was an outstanding bill for repairs for which ₹ 19,000 were paid.
Prepare realisation account.
 REALISATION ACCOUNT
Dr. Cr.
₹ ₹
To Debtors A/c 60,000 By Creditors 45,000
To Stock A/c 85,000 By Cash A/c
To Furniture 1,00,000 Debtors 55,000
To Machinery 1,30,000 Stock 40,000
To Cash A/c (Creditors) Machinery 70,000
Creditors 45,000 Furniture 80,000
O/s Repair Bill 19,000 64,000 Unrecorded Investment 20,000 2,65,000
By Shanti’s Capital A/c (Stock) 30,600
By Capital A/c:
Shanti 7,42,333
Satya 3,71,167 98,400

4,39,000 4,39,000
9
Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses
equally. On 1st April, 2024, the Balance Sheet of the firm was:

Liabilities Assets
Sundry Creditors 75,000 Cash 6,000
Bills Payable 30,000 Bank 30,000
Rita's Loan 25,000 Stock 75,000
Reserve 24,000 Book Debts 66,000
Capital A/cs: Less: Provision (6,000) 60,000
Rita 90,000 Plant and Machinery 45,000
Sobha 30,000 Land and Building 48,000
Loan to Shobha 10,000
2,74,000 2,74,000
The firm was dissolved on the date given above. The following transactions took place:
(b) Book Debts realised 54,000; Stock realised 81,250.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full.
(d) Land and Building 1,20,000.
(e) Rita took the goodwill of the firm at a value of 30,000.
(f) An unrecorded asset of 6,900 was handed over to an unrecorded liability of 6,000 in full
settlement.
(g) Realisation expenses were 5,250
Show Realisation Account.
 Amt. Amt.
To Stock 75,000 By Provision for DD 6,000
To Book Debts 66,000 By Sundry Creditors 75,000
To Plant and Machinery 45,000 By Bills Payable 30,000

To Land and building 48,000 By Rita's Capital A/c 30,000

To Bank A/c: (Goodwill taken over)
Sundry Creditors 67,500 By Bank A/c
Bills Payable 30,000 Stock 81,250
Realisation exp. 5,250 1,02,750 Book Debts 54,000
To Profit transferred to: Machinery 45,000
Rita's Capital A/c 52,250 Plant and Machiner 1,20,000 3,00,250
Sobha's Capital 52,250

4,41,250 4,41,250
10
Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of
3 : 2. On 31st March, 2018 their balance sheet was as follows:
Liabilities Amt. Assets Amt.
Sundry Creditors 42,000 Bank 35,000
Employees’ Provident Fund 60,000 Debtors 19,000
Mrs. Ashish’s Loan 90,000 Stock 24,000
Kanav’s Loan 35,000 Furniture 40,000
Workmen’s Compensation Fund 20,000 Plant 2,10,000
Investment Fluctuation Reserve 4,000 Investment 32,000
Capital A/c’s Profit & Loss A/c 10,000
Ashish 1,20,000
Kanav 80,000

3,70,000 3,70,000
On the above date, they decided to dissolve the firm.
(i) Ashish agreed to take over funriture at ₹ 38,000 and pay-off Mrs Ashish’s loan.
(ii) Debtors realised ₹ 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining
stock was sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an
agreed remuneration of ₹ 12,000 and to bear realisation expenses. Actual expenses
of realisation amounted to ₹ 8,000.
Prepare realisation account.
 REALISATION ACCOUNT
Dr. Cr.
₹ ₹
To Debtors A/c 19,000 By Creditors 42,000
To Stock A/c 24,000 By Employees’ Provident Fund 60,000
To Furniture 40,000 By Mrs. Ashish Loan 9,000
To Machinery 2,10,000 By Investment Fluctuation Reserve 4,000
To Investment 32,000 By Ashish Capital (Furniture) 38,000
To Ashish Capital 9,000 By Cash A/c
(Mrs. Ashish’s Loan) Debtors 18,500
To Kanav’s Capital A/c 12,000 Stock 60% 15,840
(Realisation expenses) Plant 2,31,000 2,65,340
To Cash A/c 60,000 By Kanav’s Capital A/c 7,680
(Employees’ Provident Fund) (40% Stock)
To Capital A/c:
Ashish 12,012
Kanav 8,008 20,020
4,26,020 4,26,020
Preparation of all
Ledger Accounts at
time of Dissolution
11

Ramesh and Umesh were partners in a firm sharing profits in the ratio of 7:3. On 31st
March, 2013, their Balance Sheet was as follows:

Liabilities Assets

Creditors 1,70,000 Bank 1,60,000

General Reserve 4,10,000 Debtors 2,40,000
Ramesh's Loan 80,000 Stock 1,30,000
Capital A/cs: Furniture 2,00,000
Ramesh 7,00,000 Machinery 9,30,000
Umesh 3,00,000 10,00,000

16,60,000 16,60,000
On the above date the firm was dissolved.
(a) Ramesh took over 50% stock at Rs 10,000 less than the book value. The remaining
stock was sold at a loss of Rs 15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for Rs 50,000 and machinery was sold for Rs
4,50,000.
(c) Creditors were paid in full.
Prepare necessary ledger accounts.
 1 Realisation Account
Particulars Amt. Particulars Amt.
To Debtors 2,40,000 By Creditors 1,70,000
To Stock 1,30,000 By Ramesh Capital A/c 55,000
To Furniture 2,00,000 (Stock)
To Machinery 9,30,000 By Umesh Capital A/c 50,000
To Bank A/c (Creditors) 1,70,000 (Furniture)
By Bank
Stock 50,000
Machinery 4,50,000
Debtors 2,28,000 7,28,000
By Loss transferred to capital A/c
Ramesh 4,66,900
Umesh 2,00,100 6,67,000

16,70,000 16,70,000

2 Partner’s Capital Account

Particulars Ramesh Umesh Particulars Ramesh Umesh
To Realisation (Loss) 4,66,900 2,00,100 By Balance b/d 7,00,000 3,00,000
To Realisation (Stock & Furniture) 55,000 50,000 By General Reserve 2,87,000 1,23,000
To Bank A/c 4,65,100 1,72,900

9,87,000 4,23,000 9,87,000 4,23,000

3 Ramesh’s Account 4 Bank Account

Particulars Amt. Particulars Amt. Particulars Amt. Particulars Amt.
To Bank A/c 80,000 By Balance b/d 80,000 To Balance b/d 1,60,000 By Realisation A/c 1,70,000
To Realisation A/c 7,28,000 By Ramesh’s Capital 4,65,100
80,000 80,000 By Umesh’s Capital 1,72,900
By Ramesh’s Loan A/c 80,000

8,88,000 8,88,000
12

Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3:2.
They decided to dissolve their partnership firm on 31st March, 2018. Pradeep was deputed
to realise the assets and to pay off the liabilities. He was paid Rs. 1,000 as commission for
his services. The financial position of the firm on 31st March, 2018 was as follows:
Balance Sheet as at 31 March, 2018
Liabilities Amt Assets Amt
Creditors 80,000 Building 1,20,000
Mrs. Pradeep's Loan 40,000 Investment 30,600
Rajesh's Loan 24,000 Debtors 34,000
Investment Fluctuation Fund 8,000 Less: Pro. For DD (4,000) 30,000
Capital A/cs: Bills Receivable 37,400
Pradeep 42,000 Bank 6,000
Rajesh 42,000 84,000 Profit and loss A/c 8,000
Goodwill 4,000
2,36,000 2,36,000
Following terms and conditions were agreed upon:
➢ Pradeep agreed to pay off his wife's loan.
➢ Debtors realised Rs. 12,000.
➢ Investment sold to Rajesh for Rs. 27,000.
➢ Building realised Rs. 1,52,000.
➢ Remaining creditors were to be paid Rs. 59,000
➢ Bill receivables were settled at a loss of Rs. 1,400.
➢ Realisation expenses amounted to Rs. 2,500.
Prepare Realisation Account.
 1 Realisation Account
Particulars Amount Amount
To Investment Account 30.600 By Creditors A/c 80,000
To Debtors A/c 34,000 By Mrs. Pradeep's Loan A/c 40,000
To Bills Receivable A/c 37,400 By Provision for DD. 4,000
To Building A/c 1,20,000 By Investment Fluctuation Fund 8,000
To Goodwill A/c 4,000 By Rajesh’s A/c
To Pradeep's Capital A/c (investment ) 27,000
(Wife’s Loan) 40,000 By Cash A/c
To Cash A/c Debtors A/c 12,000
Creditors 59,000 Building A/c 1,52,000
Expense 3,500 62,500 Bills Receivable A/c 36,000 2,00,000
To Cash A/c (Realisation Exp.)
To Partner's Capital A/c
(profit)
Pradeep 18,300
Rajesh 12,200 30,500
3,59,000 3,59,000

2 Partner’s Capital Account

Particulars Pradeep Rajesh Particulars Pradeep Rajesh
To Profit & Loss A/c 4,800 3,200 By Balance b/d 42,000 42,000
To Realisation (Investment) 27,000 By Realisation A/c (Wife’s loan) 40,000
To Bank A/c 95,500 24,000 By Realisation A/c (profit) 18,300 12,200
1,00,300 54,200 1,00,300 54,200
9,87,000 4,23,000

3 Ramesh’s Account 4 Bank Account

Particulars Amount Particulars Amount Particulars Amount Particulars Amount
To Bank A/c 24,000 By Balance b/d 24,000 To Balance b/d 6,000 By Realisation A/c 62,500
To Realisation A/c 2,00,000 By Pradeep’s Capital 95,500
24,000 24,000 By Rajesh’s Capital 24,000
By Rajesh’s Loan A/c 24,000

2,06,000 2,06,000