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hjj Illustration 62. 068 A, B and C sharing profits in 3:1:1 agree upon dissolution. They each decide to take over certain assets and liabilities
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Illustration 62. 068 A, B and C sharing profits in 3:1:1 agree upon dissolution. They each decide to take over certain assets and liabilities and continue business separately. Balance Sheet as on date of dissolution Liabilities Amount Assets Amount 3,200 Creditors Loan 17.000 6,000 Cash at Bank 1,500 Sundry Assets Debtors 24,200 Less: Bad Debts Provision 1.200 Capitals: A B 27,500 10,000 7.000 23,000 7800 44,500 Stock Furnitures 52,000 1.000 52,000 It is agreed as follows: (1) Goodwill is to be ignored. (2) 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 the figure. (3) B is to take over all the stocks at 37,000 and certain of the sundry assets at 37,200 (being book value less 10%) (4) C is 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 accruing interest of 30 which has not been recorded in the books of the firm, (5) The expenses of dissolution were 270. The remaining debtors were sold to a debt collecting agency for 50% of book values. Prepare Realisation Account, partners' Capital Accounts and Bank AccountStep by Step Solution
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