32 :- Michael, Jackson and John are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2025, they decide to dissolve the firm. On this date the balance sheet stood as
During the realisation process, a liability under a suit for damages is settled at Rs 20,000 as against Rs 5,000 provided for in the books of the firm.
Land and building were sold for Rs 40,000 and the stock and sundry debtors realised Rs 30,000 and Rs 42,000 respectively. The expenses of realisation amounted to Rs 1,200.
There was a car in the firm, which was written off from the books. It was taken by Michael for Rs 20,000. He also agreed to pay outstanding salary of Rs 20,000 not provided in books.
Prepare Realisation Account, Partner’s Capital Accounts and Bank account in the books of the firm.
Solution :-
