Pradeep and Paresh partners in a firm decided to dissolve their partnership firm on 1st April, 2024. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 10,000 as commission for his services. Balance Sheet of the firm on 31st March, 2024 was as follows:
Balance Sheet as at 31st March, 2024
| Liabilities | ₹ | Assets | ₹ | |
| Sundry Creditors Mrs. Pradeep’s Loan Paresh’s Loan Investment Fluctuation Reserve Capital A/cs: Pradeep Paresh |
1,29,400 40,000 24,000 8,000 1,21,000 1,21,000 |
Building Investment Debtors Less: Provision for Doubtful Debts Bank Profit & Loss A/c Goodwill |
71,400 4,000 |
3,00,000 30,00067,400 16,000 20,000 10,000 |
| 4,43,400 | 4,43,400 |
Following terms and conditions were agreed upon:
- Pradeep agreed to pay his wife’s loan.
- Investment was given to Paresh for ₹ 27,000.
- Building realised ₹ 3,50,000.
- Creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.
- Realisation expenses were ₹ 2,500.
Prepare Realisation Account.
Solution :
