A and B are partners sharing profits and losses equally. On 31st March, 2021, they decided to dissolve their firm. On the date of dissolution, their Balance Sheet was as under:
Balance Sheet of A and B as at 31st March, 2021
|Mrs. A’s Loan||70,000||Furniture||2,00,000|
|Capitals:||Plant and Machinery||1,00,000|
|A 2,30,000||Profit & Loss A/c||50,000|
The assets were realised and liabilities were paid as under:
(i) Creditors were paid at 20% less.
(ii) Furniture was taken over by A for ₹1,80,000 and Plant and Machinery was sold for ₹80,000.
(iii) B took over the stock at ₹1,80,000.
(iv) A promised to pay Mrs. A’s Loan.
(v) Realisation expenses of ₹20,000 were paid by B.
Prepare Realisation Account.