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

Liabilities Amount
Assets Amount
Creditors 3,00,000 Bank 3,00,000
A’s Loan 60,000 Stock 2,40,000
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
B       2,30,000 4,60,000
8,90,000 8,90,000

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.

Marks-5, CBSE:2021-22/Term-2/Zone-2/Set-1/Q-7*

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