2.'X' and 'Y' carrying on business in partnership sharing Profit and Losses equally, wished

to dissolve the firm and sell the business to 'X' Limited Company on 31-3-2006, when the

firm's position was as follows:

Liabilities

Rs.

Assets

Rs.

X's Capital

Y's Capital

Sundry

Creditors

1,50,000

1,00,000

60,000

3,10,000

Land and Building

Furniture

Stock

Debtors

Cash

1,00,000

40,000

1,00,000

66,000

4,000

3,10,000

The arrangement with X Limited Company was as follows:

(i)

Land and Building was purchased at 20% more than the book value.

(ii)

Furniture and stock were purchased at book values less 15%.

(iii) The goodwill of the firm was valued at Rs.40,000.

(iv) The firm's debtors, cash and creditors were not to be taken over, but the company

agreed to collect the book debts of the firm and discharge the creditors of the firm

as an agent, for which services, the company was to be paid 5% on all collections

from the firm's debtors and 3% on cash paid to firm's creditors.

(v)

The purchase price was to be discharged by the company in fully paid equity shares

of Rs.10 each at a premium of Rs.2 per share.

The company collected all the amounts from debtors. The creditors were paid off less by

Rs.1,000 allowed by them as discount. The company paid the balance due to the vendors

in cash.

Prepare the Realisation account, the Capital accounts of the partners and the Cash

account in the books of partnership firm.