Sita, Rita and Meeta are partners sharing profits and losses equally. On 31st March, 2022, they decided to dissolve the business. On that date, the Capital Account Balance were Sita-₹1,00,000; Rita-₹80,000 and Meeta-₹60,000. Creditors for ₹30,000 and Reserve Fund for ₹30,000 were also lying in the books of the firm while on Assets side, Sundry Assets were existing at ₹2,70,000. Sundry assets included patents for ₹20,000. The tangible assets were realised at 90% of the book value while creditors were settled at 110%. Realisation expenses were ₹10,000 paid by Sita. There was an unrecorded assets of ₹5,000 which was taken over by Meeta.
Answer question on the basis of above information.
Calculate the loss/profit on realisation of Assets and liabilities on the basis of preparation of Realisation A/c.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹53,000 Loss on Realisation.
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| To sundry assets | 2,70,000 | By Creditors | 30,000 |
| To Cash A/c (creditors paid) | 33,000 | By cash A/c (realisation of tangible assets) | 2,25,000 |
| To Sita's Capital A/c (Realisation expenses) |
10,000 | By Meeta's Capital A/c (Unrecorded asset) |
5,000 |
| By loss on realisation Sita 17667 Rita 17667 Meeta 17666 |
53,000 | ||
| 3,13,000 | 3,13,000 |
* Tangible asset = 2,70,000 - 20,000(patent)
= 2,50,000
Realisation on tangible asset is 90% i.e. 2,50,000 x 90/100
= ₹2,25,000
* Creditors = ₹30,000
Paid at 110% i.e. 30,000 x 110/100
= ₹33000
* Realisations expenses has to be paid by firm but it is paid by partner Sita. So, the journal entry for this -
Realisation A/c Dr. ₹10,000
To Sita's Capital A/c ₹10,000
* Unrecorded assets of ₹5,000 is taken over by partner Meeta. Journal entry for this-
Meeta's Capital A/c Dr. ₹5,000
To Realisation A/c ₹5,000