Question

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;

                                      Balance sheet of A and B as at 1st January 2020.

Liabilities Amount Assets Amount
(OMR) (OMR)
Sundry Creditors 10,000 Building 17,000
Capital Account Debtors 5,500
Ali 10,000 Stock 4,500
Akbar 20,000 30,000 Furniture 8,000
Machinery
Cash at Bank 2,000
3000

Total     40,000 Total 40,000


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                          
b) Partners’ Capital account                
c) Bank account

Answer 1