Case - 4

Ali and Akbar are partners share profits in the ratio of 3:2 respectively. They decided to dissolve the partnership as on 1st January 2020. On that day their balance sheet was as follows;

fig1

a) Ali decided to take over Machinery at OMR 7,500

b) Akbar took over Building at OMR 18,000

c) Stock realized its full value while furniture was sold at a discount of 10%

d) Debtors were settled at OMR 5000

e) Realization expense amounted to OMR 1000

You are required to Prepare;

a) Realization account (5 marks)

b) Partners Capital account ( 3 mark)

c) Bank account (2 marks)

Balance sheet of A and B as at 1st January 2020. Liabilities Amound Assets (OMR) Amount (OMR) Sundry Creditors 10,000 Building 17,000 Capital Account 10,000 Akbar 20,000 Ali Debtors 5,500 Stock 4,500 30,000 Furniture 8,000 Machinery 2,0001 Cash at Bank 3000 Total 40,000 Total 40,000