Ashok Babu and Chetan are in partnership sharing profit in the proportion of 1 2 1 3 1 6 respectivel...........

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under: (3 marks)

Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017

Liabilities Amount

Assets Amount

Sundry Creditors 20,000 Bank 7,500 Bills payable 25,500 Sundry Debtors 58,000 Babu’s loan 30,000 Stock 39,500 Capital’s: Machinery 48,000 Ashok 70,000 Investment 42,000 Babu 55,000 Freehold Property 50,500 Chetan 27,000 1,52,000 Current Accounts : Ashok 10,000 Babu 5,000 Chetan 3,000 18,000 2,45,500 2,45,500

The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.

Prepare Realisation Account, Partners Capital Account, and Bank Account.

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