P, Q and R sharing profit in the ratio of 3:1:1 decided to dissolve their firm on Mar 31, 2010, their position was as follows:
|
Liabilities |
Assets |
||||
|
Creditors |
12,000 |
Cash in Bank |
7,000 |
||
|
Loan |
3,000 |
Debtors |
48,400 |
||
|
Capitals |
Less: Reserve |
2,400 |
46,000 |
||
|
P |
55,000 |
Stock |
16,600 |
||
|
Q |
22,000 |
Furniture |
2,400 |
||
|
R |
20,002 |
97,000 |
Sundry Assets |
40,000 |
|
|
1,12,000 |
1,12,000 |
It is agreed that:
- P is to take over all the furniture at Rs 2,000 and debtors amounting to Rs 40,000 at Rs 36,000. P also agrees to pay the creditors.
- Q is to take over all the stock at book value and some of the sundry assets Rs 14,400 (being book value less 10%).
- R is to take over the remaining sundry assets at 90% of the book value and assume responsibility for the discharge of the loan.
- The remaining debtors were taken by a debt collecting agency at 80% of the book value.
- The expenses of dissolution amounted to Rs 400. You are required to prepare Realisation Account, Bank Account and Capital Accounts of the Partners.