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 December 31, 2017, when the balance sheet of the firm as under:

19. 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 December 31, 2017, when the balance sheet of the firm as under:

Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017

Liabilities	Amount  (Rs.)	Assets	Amount (Rs.)
Sundry Creditors	20,000	Bank	7,500
Bills payable	25,500	Sundry Debtors	58,000
Babu’s loan	30,000	Stock	39,500
Capital’s:		Machinery	48,000
Ashok 70,000		Investment	42,000
Babu 55,000		Freehold Property	50,500
Chetan 27,000	1,52,000
Current account:
Ashok 10,000
Babu 5,000
Cheaten 3,000	18,000
	2,45,500		2,45,500

The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.
Prepare Realisation Account, Partners Capital Account, Bank Account.

SOLUTION

   Realisation Account

Particulars	Amount  (Rs.)	Particulars	Amount  (Rs.)
Sundry Debtors	58,000	Sundry Creditors	20,000
Stock	39,500	Bills Payable	25,500
Machinery	48,000	Ashok’s Current  A/c (Investment)	40,000
Investment	42,000	Babu’s Current  A/c (Machinery)	45,000
Freehold property	50,500	Chetan’s Current A/c	55,000
Bank:
Sundry Creditors	18,600	Bank:
Bills payable	25,500	Sundry Debtors	56,500
Expenses	3,000	Stock	36,500
Profit Transferred to :		Unrecorded computer	9,000
Ashok’s Current A/c	1,200
Babu’s Current A/c	800
Chetan’s Current A/c	400
	2,87,500		2,87,500

   Partners’ Current Accounts

Particulars	Ashok	Babu	Chetan	Particulars	Ashok	Babu	Chetan
Realisation (Assets taken)	40,000	45,000	55,000	Balance b/d	10,000	5,000	3,000
				Realisation  (Profit)	1,200	800	400
				Partners Capital A/c	28,000	39,200	51,600
	40,000	45,000	55,000		40,000	45,000	55,000

 Partners’ Capital Accounts

Particulars	Ashok	Babu	Chetan	Particulars	Ashok	Babu	Chetan
Ashok’s Current	28,800			Balance b/d	70,000	55,000	27,000
Babu’s Current		39200		Bank			24,600
Chetan’s Current			51600
Bank	41,200	15,800
	70,000	55,000	51,600		70,000	55,000	51,600

Babu’s Loan A/c

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Cash A/c	30,000	Balance b/d	30,000
	30,000		30,000

  Bank Account

Particulars	Amount (Rs.)	Particulars	Amount  (Rs.)
Balance b/d	7,500	Realisation  (Payment of Expenses and Liabilities)	47,100
Realisation  (Assets realised )	102,000	Babu’s Loan	30,000
Chetan’s Capital A/c	24,600	Ashok’s Capital A/c	41,200
		Babu’s Capital A/c	15,800
	1,34,100		1,34,100

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