Q$.13$

$A,B$ and $C$ are partners in $A$ & Co$.$ sharing profits and losses in the ratio of $2$:$2$:$1$ respectively.

The Balance Sheet of A & Co$.$ as at ${31}^{st}$ March, $1993$ is as follows:

The firm was dissolved on the date of Balance Sheet due to continued losses. After preparing the above balance sheet as on $31\mathrm{.}3\mathrm{.}1993,$ it was discovered that purchases amounting to $\text{'}20,000$ in March, $1993$ were not recorded in books, though the goods were received during March $1993.$

Fixed Assets realized $1,00,000,$ Stock $1,05,000$ and Debtors $1,02,500.$ Creditors were paid after deduction of discount @ $2\%.$ The expenses of realization came to ${?}^5,400.$ A agreed to take over the loan of Mrs$.$ A$.$ B is insolvent and his estate is unable to contribute anything.

Prepare the relevant accounts to close the books of $A$ & Co applying the decision of Garner Vs Murray. $[$Ans$.$ Loss on realization $\text{'}1,20,000$; B$\text{'}$s Deficiency $\text{'}22,000.]$

$[$CA $($Inter$)$ Nov., $1993]$