Question

Ekam and Akash were partners in a firm sharing profits in the ratio of 3 : 2. On 31st March, 2024 the Balance Sheet of the firm was as follows: 

The firm was dissolved and the assets and liabilities were settled as follows: 
Land and Building was taken over by the creditors as full settlement. 
Ekam accepted an unrecorded asset of ₹50,000 in full settlement of his loan. 
Furniture was taken over by Akash for cash payment at 5% less than book value. 
Debtors were collected by a debt collection agency at a cost of ₹10,000. 
Bills Receivable realised ₹1,41,000. 
Akash agreed to bear all realisation expenses. He was allowed ₹1,000 for this service. Actual realisation expenses of ₹2,000 were paid by Akash. 
Prepare Realisation Account and Partners’ Capital Accounts.

Hint:

In dissolution, all assets and liabilities are transferred to Realisation Account and profit or loss is shared in the old profit-sharing ratio.

Answer 1

(i) Realisation Account 

Profit on Realisation = ₹67,500 This profit is shared between partners in the ratio 3 : 2 \[ \text{Ekam’s Share} = 40,500 ; \text{Akash’s Share} = 27,000 \] (ii) Partners’ Capital Accounts