A, B and C sharing profits in the ratio of 3 : 1 : 1 agree upon dissolution. They decide to divide certain assets and liabilities and continue business separately. Their Balance Sheet was as under:

It is agreed that:

(a) Goodwill is to be ignored.

(b) A is to take over all the fixtures at ₹800; debtors amounting to ₹20,000 at ₹17,200. The creditors of ₹6,000 to be assumed by A at that figure.

(c) B is to take over all the stocks at ₹7,000 and certain of the sundry assets at ₹7,200 ( being book value less 10%).

(d) C is to take over the remaining sundry assets at 90% of book values, less ₹100 allowances and assume responsibility for the discharge of the loan, together with the accruing interest of ₹30 which has not been recorded in the books of the firm.

(e) The expenses of dissolution were ₹270. The remaining debtors were sold to a debt collecting agency for 50% of book values.

Prepare:

(i) Realisation Account;

(ii) Partners’ Capital Accounts; and

(iii) Cash Account.

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Creditors Loan Capital A/c --A Capital A/c B Capital A/c --C Liabilities ₹ 6,000 Cash 1,500 Sundry Assets 27,500 Debtors 10,000 Less: Provision for bad debts 7,000 Stock 52,000 Assets Fixtures 24,200 1,200 ₹ 3,200 17,000 23,000 7,800 1,000 52,000