Dr. Realisation Account Cr. Date Particulars Date Particulars 2017 To Machinery Alc 31,000 2017 By Sundry Creditors Alc 12.000 Dec. 31 To Furniture A/C 3,000 Dec. 31 By Bank Alc (assets realised) 30.600 To Stock Alc 10,000 By A Capital A/c (stock taken over) 3,200 To Debtors Alc 6,000 By B Capital Alc (furniture taken over) 2,400 To Bank A/c (sundry creditors paid) 12,000 By Partners' Capital Alcs (loss): To Bank A/c (expenses) 300 (A7,050; 24,700, C2 2,350) 14,100 62,300 62 300 Dr. Bank Account Cr. Date Particulars Date Particulars 2017 To Realisation Alc 30,600 2017 By Balance bld (Note 1) 6,000 Dec. 31 To C Capital Alc 350 Dec. 31 By Realisation A/c (payment to creditors) 12,000 By Realisation Alc (expenses) 300 By Capital Alc (A9,750; B2 2,900) 12.650 30,950 30,950 Dr. Partners' Capital Accounts Cr. Date Particulars A B Date Particulars B C 2017 To Realisation A/C 3,200 2.400 2017 By Balance bld 20,000 10,000 2,000 Dec 31 To Realisation A/c (loss) 7,050 4,700 2,350 Dec 31 By Bank Alc 350 To Bank Alc 9,750 2,900 20,000 10,000 2,350 20,000 10,000 2,350 Working Note: (1) Bank overdraft represents adverse balance in the Bank Account. Therefore, it should not be transferred to Realisation Account Illustration 2 A, B and Care in partnership sharing profits and losses in the ratio of 5:3:2. They decide to dissolve their partnership and the Balance Sheet at the date of the dissolution is as follows: Liabilities Assets 3 Sundry creditors 6,000 Freehold property 52.000 Bills payable 3,000 Plant 30,000 Bank overdraft 1,500 Stock in trade 40,000 Reserve fund 5,000 Furniture 5,000 Capital - A 53,500 Sundry debtors 17,500 Capital-B 44,100 Less: Provision for bad debts 500 17,000 Capital - 39,400 Cash in hand 8,500 1,52,500 1,52,500 A is to take the freehold property at 35,000, B is to take the stock-in-trade at 35,000 and C is to take furniture at 3,000. Sundry debtors realised 16,000 and Plant realised 40,000. Cost of dissolution was 2,000. Close the books of the firm showing the Realisation Account, Capital Accounts and Cash Account 975