Accountancy > Accounting For Partnership Firms > Dissolution Of Partnership Firm
Jai and Kavi were partners in a firm sharing profits and losses equally. They agreed to dissolve the firm on 31st March, 2024. Their Balance Sheet as on 31st March, 2024 was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Bills Payable | 2,00,000 | Cash in Hand | 2,00,000 |
| Loan by Kavi | 2,00,000 | Cash at Bank | 4,00,000 |
| General Reserve | 4,00,000 | Debtors 3,40,000 Less: Prov. 40k | 3,00,000 |
| Profit and Loss A/c | 4,00,000 | Land and Building | 6,00,000 |
| Loan by Mrs. Kavi | 1,50,000 | Machinery | 5,00,000 |
| Capitals: Jai 5L, Kavi 5L | 10,00,000 | Goodwill | 3,50,000 |
| Total | 23,50,000 | Total | 23,50,000 |
The following transaction took place at the time of dissolution: (i) Land and Building realised ₹4,50,000. (ii) Jai took Machinery at ₹4,50,000. (iii) Bills Payable were paid ₹1,96,000 in full settlement. (iv) Debtors realised at ₹2,70,000. (v) Firm had to pay ₹5,000 for Outstanding Salary which was not provided earlier. (vi) Realisation expenses were ₹19,000. Prepare Realisation Account.
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