Pradeep and Paresh partners in a firm decided to dissolve their partnership firm on 1st April, 2026. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 10,000 as commission for his services. Balance Sheet

Pradeep and Paresh partners in a firm decided to dissolve their partnership firm on 1st April, 2026. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 10,000 as commission for his services. Balance Sheet of the firm on 31st March, 2026 was as follows:

Following terms and conditions were agreed upon:

(a) Pradeep agreed to pay his wife’s loan.

(b) Investment was given to Paresh for ₹ 27,000.

(c) Building realised ₹ 3,50,000.

(d) Creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.

(e) Realisation expenses were ₹ 2,500.

Prepare Realisation Account.

Solution:

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