Question - 22

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively they dissolve the partnership of the Dec., 31, 2006 when the balance sheet of the firm as under :

Liabilties                                         Amt.

sundry creditors                             20,000

Bill payable                                   25,500

Loan from Babu                            30,000

Capital :

Ashok             70,000

Babu               55,000

Chetan            27,000                  1,52,000

Current account        

Ashok             10,000

Babu                 5,000

Chetan              3,000                    18,000

                                                     2,45,000

Assets                                              Amt.

Bank                                               7,500

Sundry debtor                                58,000

Stock                                             39,500

Machinery                                     48,000

Investment                                    42,000

Freehold property                         50,500

                                                    2,45,000

The machinery was taken over by Babu for Rs. 45,000. Ashok took over the investment for Rs. 40,000 and freehold property took over by chetan and Rs. 55,000 the remaining assets realized as follows :  debtor Rs. 56,500, stock Rs. 36,500, sundry creditors were settled at discount of 7% A office computer not shown in the book of account realized Rs. 9,000 Realization expenses amounted to Rs. 3,000 prepare necessary account.

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