Question

Abhishek, Babita and Chandan started business on 1^st April 2014 with capital of Rs.1,00,000, Rs.80,000 and Rs.60,000 respectively sharing profits and losses in the ratio of 4:3:3 for the year ended 31^st March 2015. The firm suffered a loss of Rs.50,000. Each of the partner withdrew Rs.10,000 during the year and the firm was dissolved. The creditors of the firm stood at Rs.24,000 on that day and cash in hand was Rs.4,000. The assets realized Rs.3,00,000 and creators were paid Rs.23,500 in full settlement of that claim. Prepare Realization Account and show working.

Answer 1

REALISATION ACCOUNT

Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To Sundry Assets Account	1,80,000	By CreditorsAccount	24,000
To Cash Account	23,500	By Cash Account	3,00,00
To Capital Account
- Abhishek48,200
- Babita36,150
- Chandan36,150	1,20,500
	3,24,000		3,24,000

Working Notes:

Statement showing calculation of capital as on 31^st March 2015

	Abhishek	Babita	Chandan
Capital (01.04.2014)	1,00,000	80,000	60,000
Less: Loss (50,000)	20,000	15,000	15,000
	80,000	65,000	45,000
Drawings	10,000	10,000	10,000
Capital as on 31st March 2015	70,000	55,000	35,000

MEMORANDUM BALANCE SHEET as on 31.03.2015

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Cash	40,000
- Abhishek 70,000		Sundry Assets (Balancing figure)	1,80,000
- Babita 55,000
- Chandan 35,000	1,60,000
Creditors	24,000
	1,84,000		1,84,000