Question - 12

A and B decided to dissolve thier business on 31st December 2017 on that date their Balance Sheet stood as follows:

Liabilities                                 Amt.

Creditors                                 10,000

A's loan                                   18,000

Capital A/c:

        A             20,000

       B             40,000             60,000

                                              88,000

Assets                                     Amt.

Cash                                        2,000

Debtors                                 13,000

Sundry Assets                       68,000

Goodwill                                5,000

                                              88,000

Partners shared profit & loss in the ratio of capital Goodwill realized Rs.6,000. Creditors were paid off at 5% discount sundry Assets realised Rs. 63,000 Debtors realized Rs. 8,000 Cost of dissolution amounted to Rs. 500 prepare Realization Account.

NOTE : Purchase Novbodh book for extra information.