Question:
Rishika and Shivika were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2024 stood as follows:
Balance Sheet of Rishika and Shivika as at 31st March, 2024
Liabilities Amount (₹) Assets Amount (₹) Capitals: Equipment 45,00,000 Rishika – ₹30,00,000
Shivika – ₹20,00,000 50,00,000 Investments 5,00,000 Shivika’s Husband’s Loan 5,00,000 Debtors 35,00,000 Creditors 40,00,000 Stock 8,00,000 Cash at Bank 2,00,000 Total 95,00,000 Total 95,00,000
The firm was dissolved on the above date and the following transactions took place:
(i) Equipements were given to creditors in full settlement of their account.
(ii) Investments were sold at a profit of 20% on its book value.
(iii) Full amount was collected from debtors.
(iv) Stock was taken over by Rishika at 50% discount.
(v) Actual expenses of realisation amounted to ₹ 2,00,000 which were paid by the firm. Prepare Realisation Account.
Rishika and Shivika were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2024 stood as follows:
Balance Sheet of Rishika and Shivika as at 31st March, 2024
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals: | Equipment | 45,00,000 | |
| Rishika – ₹30,00,000 Shivika – ₹20,00,000 | 50,00,000 | Investments | 5,00,000 |
| Shivika’s Husband’s Loan | 5,00,000 | Debtors | 35,00,000 |
| Creditors | 40,00,000 | Stock | 8,00,000 |
| Cash at Bank | 2,00,000 | ||
| Total | 95,00,000 | Total | 95,00,000 |
The firm was dissolved on the above date and the following transactions took place:
(i) Equipements were given to creditors in full settlement of their account.
(ii) Investments were sold at a profit of 20% on its book value.
(iii) Full amount was collected from debtors.
(iv) Stock was taken over by Rishika at 50% discount.
(v) Actual expenses of realisation amounted to ₹ 2,00,000 which were paid by the firm. Prepare Realisation Account.
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Always account for non-cash settlements (like giving equipment to creditors), profits/losses on asset sales, and ensure expenses are debited to Realisation. Profit/Loss is divided in old ratio.
Updated On: Jul 7, 2025
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Solution and Explanation
Realisation Account
| Dr. | ₹ | Cr. | ₹ | |
|---|---|---|---|---|
| To Equipment A/c | 45,00,000 | By Creditors A/c (settled by equipment) | 40,00,000 | |
| To Investments A/c | 5,00,000 | By Bank A/c (Investment realised ₹6,00,000) | 6,00,000 | |
| To Debtors A/c | 35,00,000 | By Bank A/c (Debtors realised) | 35,00,000 | |
| To Stock A/c | 8,00,000 | By Rishika’s Capital A/c (Stock taken at 50%) | 4,00,000 | |
| To Bank A/c (Realisation Expenses) | 2,00,000 | By Loss on Realisation (shared in 3:2) | ||
| Rishika’s Capital A/c | 2,40,000 | |||
| Shivika’s Capital A/c | 1,60,000 | |||
| Total | 95,00,000 | Total | 95,00,000 |
Final Answer: Loss on Realisation = ₹4,00,000
Rishika’s Share (3/5) = ₹2,40,000
Shivika’s Share (2/5) = ₹1,60,000
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