032 2,80,000 Debtors Illustration 9 P and Q were carrying on business sharing profits and losses equally. The firm's Balance Sheet as at 31.12.2013 was: Liabilities Assets Capital Accounts: Plant 1,60,000 P 1,50,000 Building 48.000 Q 1.30.000 75,000 Sundry Creditors 80,000 Stock 70,000 Bank Overdraft 45,000 Joint Life Policy 6,000 Profit & Loss A/C 30,000 Drawings Account: 9.000 7.000 16.000 4,05,000 4.05.000 The operations of the business were carried on till 30.06.2014. P and Q both withdrew in equal amount half the amount of profit made during the current period of six months after charging depreciation at 10% per annum on plant and after writing off 5% on building. During the current period of six months, creditors were reduced by 720,000 and bank overdraft by 75,000 The joint life policy was surrendered for 76,000 before 30th June 2014. Stock was valued at 784,000 and debtors at 68,000 on 30 June 2014. The other items remained the same as at 31.12.2013 On 30.06.2014, the firm sold its business to PQ Ltd. The value of goodwill was estimated at 71,30,000 and the remaining assets were valued on the basis of the balance sheet as on 30.06.2014 PQ Ltd. paid the purchase consideration in equity shares of 710 each. You are required to prepare: (a) Balance sheet of the firm as at 30.06.2014, (b) Realisation account, (c) Partners' Capital Accounts showing the final settlement between them. (16 Marks)