Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows:
Balance Sheet of Ashish and Kanav as at 31st March, 2018
Employees’ Provident Fund
Mrs. Ashish’s Loan
Workmen’s Compensation Fund
Investment Fluctuation Reserve
Profit and Loss Account
On the above date they decided to dissolve the firm.
(i) Ashish agreed to take over furniture at Rs. 38,000 and pay off Mrs. Ashish’s loan.
(ii) Debtors realised Rs. 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of Rs. 12,000 and to bear realization expenses. Actual expenses of realization amounted to Rs. 8,000.
Prepare Realization Account.