Question - 16

Surjit and Rachi sharing profit and loss in the raio of 3:2 their balance sheet as on March 31, 2006 is as follows:

Liabilities                                        Amt.

Creditors                                           38,000

Loan from Mrs. Surjit                      10,000

Reserve                                               15,000

Loan from Rahi                                  5,000

Capital :

Surjit                                                   10,000

Rachi                                                    8,000

                                                          86,000

Assets                                              Amt.

Bank                                                   11,500

Stock                                                   6,000

Debtor                                               19,000

Furniture                                            4,000

Plant                                                  28,000

Invetment                                         10,000

Profit and loss                                    7,500

                                                          86,000

The firm was dissolved on March 31, 2006 on the following term :

  1. Surjit agreed to take the investment at Rs. 8,000 and to paid Mr. Surjit's loan.
  2. Other assets were realized as follows : Stock Rs. 5,000, Debtors Rs. 18,500, Furniture Rs. 4,500, Plant Rs. 25,000.
  3. Expenses on Realization amounted to Rs. 1,600.
  4. Creditors agreed to accept Rs. 37,000 as a final settlement.
 You are required to prepare Realization account partner's capital account and Bank account.

NOTE : Purchase Novbodh book for extra information.