Ravneet and Manmeet were partners in a firm sharing profits and losses in the ratio of 7 : 3. On 31st March, 2025, their Balance Sheet was as follows :
Balance Sheet of Ravneet and Manmeet as on 31st March, 2025
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
|---|---|---|---|
| Creditors | 4,50,000 | Cash at Bank | 2,50,000 |
| Capitals : | | Stock | 2,50,000 |
| Ravneet 5,00,000 | | Debtors | 2,00,000 |
| Manmeet 3,00,000 | 8,00,000 | Plant & Machinery | 5,50,000 |
| | 12,50,000 | | 12,50,000 |
On the above date, the firm was dissolved. The plant and machinery was sold at Rs. 4,87,000 and stock at 20% less than the book value. Debtors realised Rs. 1,40,000.
Ravneet agreed to bear all realisation expenses for which he was allowed a commission of Rs. 9,000. Actual realisation expenses amounted to Rs. 7,500.
Prepare Realisation Account and Partners' Capital Accounts.
6 marks· Part A· Dissolution of a Partnership Firm — Realisation Account and Partners' Capital Accounts