Madhur and Neeraj were partners in a firm sharing profits and losses in the ratio of 3 : 2. The Balance Sheet as at 31st March, 2024 was as follows: Balance Sheet of Madhur and Neeraj as at 31st March, 2024
Liabilities Amount (₹) Assets Amount (₹) Capitals: Machinery 7,00,000 Madhur 9,00,000 Investments 4,00,000 Neeraj 8,00,000 Debtors 11,00,000 Creditors 6,00,000 Stock 2,00,000 Bills Payable 2,00,000 Cash at Bank 1,00,000 Total 25,00,000 Total 25,00,000
The firm was dissolved on the above date and the following transactions took place:
Machinery was taken over by creditors in full settlement of their account.
Investments were taken over by Neeraj at 5,00,000.
One of the debtors of 1,00,000 was untraceable. Remaining debtors were realised at 10% less.
Stock was taken over by Madhur at 50% discount.
Realisation expenses amounting to 1,00,000 were paid by Madhur.
Prepare Realisation Account.
Madhur and Neeraj were partners in a firm sharing profits and losses in the ratio of 3 : 2. The Balance Sheet as at 31st March, 2024 was as follows: Balance Sheet of Madhur and Neeraj as at 31st March, 2024
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals: | Machinery | 7,00,000 | |
| Madhur | 9,00,000 | Investments | 4,00,000 |
| Neeraj | 8,00,000 | Debtors | 11,00,000 |
| Creditors | 6,00,000 | Stock | 2,00,000 |
| Bills Payable | 2,00,000 | Cash at Bank | 1,00,000 |
| Total | 25,00,000 | Total | 25,00,000 |
The firm was dissolved on the above date and the following transactions took place:
Machinery was taken over by creditors in full settlement of their account.
Investments were taken over by Neeraj at 5,00,000.
One of the debtors of 1,00,000 was untraceable. Remaining debtors were realised at 10% less.
Stock was taken over by Madhur at 50% discount.
Realisation expenses amounting to 1,00,000 were paid by Madhur.
Prepare Realisation Account.
Show Hint
Solution and Explanation
Step 1: Calculate Realised Values
- Machinery taken over by creditors – No cash received or paid.
- Investments taken over by Neeraj – ₹5,00,000 (Dr. Realisation A/c, Cr. Neeraj's Capital A/c)
- Debtors:
- Total = ₹11,00,000
- Less: Untraceable = ₹1,00,000
- Remaining = ₹10,00,000 realised @ 90% = ₹9,00,000
- Stock: 50% of ₹2,00,000 = ₹1,00,000 (taken over by Madhur)
- Realisation Expenses = ₹1,00,000 (paid by Madhur, debited to Realisation A/c)
Step 2: Realisation Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
|---|---|---|---|
| To Machinery A/c | 7,00,000 | By Creditors (assets taken over) | 6,00,000 |
| To Investments A/c | 4,00,000 | By Neeraj's Capital A/c (Investments) | 5,00,000 |
| To Debtors A/c | 11,00,000 | By Bank A/c (Debtors realised) | 9,00,000 |
| To Stock A/c | 2,00,000 | By Madhur's Capital A/c (Stock) | 1,00,000 |
| To Bank A/c (Expenses) | 1,00,000 | ||
| Total | 25,00,000 | Total | 21,00,000 |
Loss on Realisation = ₹4,00,000
Distribution of Loss in 3:2 ratio:
- Madhur = (3/5) × ₹4,00,000 = ₹2,40,000
- Neeraj = (2/5) × ₹4,00,000 = ₹1,60,000
Final Answer: Realisation loss of ₹4,00,000 shared between Madhur (₹2,40,000) and Neeraj (₹1,60,000).
Top CBSE CLASS XII Accountancy Questions
From the following Balance Sheet of Hira Ltd. as at 31st March, 2023, prepare Comparative Balance Sheet:
- On 1st May, 2023, Amrit Ltd. issued 10,000, 10% debentures of ₹100 each at a premium of 10%, redeemable at a premium of 10%. Loss on issue of debentures will be:
- Gupta and Sharma are partners in a firm sharing profit in the ratio of 4:1. They admitted Preeti as a new partner for \( \frac{1}{4} \) share in the profits, which she acquired wholly from Gupta. The new profit sharing ratio of Gupta, Sharma, and Preeti will be:
- On the dissolution of a partnership firm, there were debtors of ₹34,000. Debtors of ₹1,000 became bad, and 60% was realized from the remaining debtors. Which account will be debited and by how much amount on the realization from debtors?
- If vendors are issued fully paid shares of ₹1,25,000 in purchase consideration of net assets of ₹1,50,000, the balance of ₹25,000 will be credited to:
Top CBSE CLASS XII Dissolution of Partnership Firms Questions
- Piyush and Mita were partners in a firm sharing profits and losses in the ratio of 5 : 2. On 31st March, 2024, the firm was dissolved. After transferring various assets (other than cash) and third-party liabilities to the Realisation Account, the following transactions took place:
(i) Investments whose book value was ₹50,000 were realised at 70%.
(ii) Unrecorded liabilities of ₹21,000 were paid.
(iii) Piyush took over stock worth ₹78,000 at ₹65,000.
Pass necessary journal entries for the above transactions in the books of Piyush and Mita. - In the event of dissolution of a partnership firm, the order of payment of losses including deficiencies of capital shall be:
- Lalit and Madan were partners in a firm sharing profits and losses in the ratio of 7 : 3. On 31st March, 2024 their firm was dissolved. After transferring sundry assets (other than cash) and third-party liabilities to Realisation Account, the following transactions took place: \begin{itemize} \item[(i)] The firm had stock of \rupee2,00,000. 40% of this stock was taken over by a creditor of \rupee1,00,000 in full settlement of his claim. The remaining stock was sold at a loss of 10%. \item[(ii)] The remaining creditors were paid \rupee2,10,000. \item[(iii)] Plant and Machinery of \rupee5,00,000 were accepted by Mrs. Madan against the settlement of her loan of \rupee5,40,000. \item[(iv)] Debtors of \rupee3,50,000 were sold to a debt collection agency who charged a commission of \rupee25,000. \item[(v)] Investments of \rupee1,00,000 were taken over by the partners in their profit-sharing ratio. \item[(vi)] Expenses of dissolution were \rupee8,000. \end{itemize} Pass necessary journal entries for the above transactions in the books of the firm.
Rishi, Manu and Komal were partners in a firm sharing profits and losses in the ratio of 3 : 4 : 5. On 31st March, 2024 their firm was dissolved. After transferring sundry assets (except cash in hand and cash at bank) and third party liabilities to realisation account, the following transactions took place:
(i) A creditor of ₹2,00,000 took over an old machine for ₹70,000 that had been completely written off and his balance was settled at a discount of 10%.
(ii) Remaining creditors of ₹8,00,000 agreed to take over stock of ₹6,00,000 in full settlement of their claim.
(iii) The remaining stock of ₹3,00,000 was sold at a loss of 30%.
(iv) Dissolution expenses amounting to ₹90,000 were paid by Komal.
(v) Saransh, an old customer whose account for ₹40,000 was written off as bad debt in the previous year, paid ₹36,000.
(vi) Loss on dissolution amounted to ₹2,40,000.
Pass necessary journal entries for the above transactions to close the books of Rishi, Manu and Komal at the time of dissolution of the firm.- Show the following items under major heads and sub-heads (if any) in the Balance Sheet of the company as per Schedule III, Part I of the Companies Act, 2013:
(a) Calls in advance
(b) Public deposits
(c) Intangible assets under development
Top CBSE CLASS XII Questions
- 2, b, c are in A.P. and the range of determinant $\begin{vmatrix}1&1&1\\ 2&b&c\\ 4&b^{2}&c^{2}\end{vmatrix}$ is [2, 16]. Then find range of c is
- A boy of mass 50 kg is standing at one end of a, boat of length 9 m and mass 400 kg. He runs to the other, end. The distance through which the centre of mass of the boat boy system moves is
- A capillary tube of radius r is dipped inside a large vessel of water. The mass of water raised above water level is M. If the radius of capillary is doubled, the mass of water inside capillary will be
- A circular disc is rotating about its own axis. An external opposing torque 0.02 Nm is applied on the disc by which it comes rest in 5 seconds. The initial angular momentum of disc is
- A circular disc is rotating about its own axis at uniform angular velocity \(\omega.\) The disc is subjected to uniform angular retardation by which its angular velocity is decreased to \(\frac {\omega}{2}\) during 120 rotations. The number of rotations further made by it before coming to rest is