Rita Geeta and Ashish were partners in a firm sharing profits losses in the ratio of 3 2 1 On March ...........

Rita, Geeta and Ashish were partners in a firm sharing profits/losses in the ratio of 3:2:1. On March 31, 2017 their balance sheet was as follows: (3 marks)

Liabilities Amount

Assets Amount

Capitals: Cash 22,500 Rita 80,000 Debtors 52,300 Geeta 50,000 Stock 36,000 Ashish 30,000 1,60,000 Investments 69,000 Creditors 65,000 Plant 91,200 Bills payable 26,000 General reserve 20,000 2,71,000 2,71,000

On the date of above mentioned date the firm was dissolved:

1. Rita was appointed to realise the assets. Rita was to receive 5% commission on the rate of assets (except cash) and was to bear all expenses of Realisation,

2. Assets were realised as follows:

Rs Debtors 30,000 Stock 26,000 Plant 42,750

3. Investments were realised at 85% of the book value,

4. Expenses of Realisation amounted to Rs 4,100,

5. Firm had to pay Rs 7,200 for outstanding salary not provided for earlier,

6. Contingent liability in respect of bills discounted with the bank was also materialized and paid off Rs 9,800,

Prepare Realisation Account, Capital Accounts of Partners’ and Cash Account.

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