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Arun and Tarun were partners sharing profit and losses in the ratio 3:2. They decided to dissolve the firm on 31.3.2019, when their balance sheet was as under:
The firm was dissolved on 1.4.2019 on the following terms:
a) Arun took over the investment at Rs 8,000 and agreed to pay off the loan of his wife
b) The assets realized as follows: Stock Rs 2,000, Debtors Rs 20,500, Furniture Rs 1,000 more than its book value, Plant Rs 20,000 less than its book value.
c) Expenses of realization were Rs 1,200
d) Creditors were paid off at a discount of 3%
e) Firm had an unrecorded asset which was valued at Rs 5,000 which was accepted by unrecorded liability of Rs7,000, in full settlement of their claims.
Prepare the Realisation A/C, Partner’s Capital Accounts and Bank A/C to close the books of the firm
