Balance Sheet as on 31.3.2023
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Capital | X | Plant | 90,000 |
| Sundry Creditors | 1,00,000 | Debtors | 60,000 |
| Creditors | 1,70,000 | Furniture | 12,000 |
| Bills Payable | 30,000 | Stock | 50,000 |
| | | Investments | 70,000 |
| | | Bills Receivable | 16,000 |
| | | Cash in hand | 32,000 |
| | 3,80,000 | | 3,80,000 |
On the above date the firm was dissolved. Sanjay was appointed to realize the assets. Sanjay was to receive 6% commission on the sale of assets (except cash) and was to bear all expenses of realization.
a) Sanjay realized the assets as follows:
Plant ₹72,000, Debtors ₹54,000, Furniture ₹18,000, Stock 90% of book value, Investments ₹76,000 and Bills Receivable ₹31,000.
b) One of the Creditors for ₹1,300 did not claim the amount.
c) Expenses of realization amounted to ₹4,500.
Answer (2)
To address the question, we will compute the total realization from the sale of assets, calculate Sanjay's commission, and determine any remaining amounts or expenses.
Realization from Sale of Assets:
Plant: Sold for ₹72,000
Debtors: Sold for ₹54,000
Furniture: Sold for ₹18,000
Stock: 90% of book value, i.e., 90% of ₹50,000 = ₹45,000
Investments: Sold for ₹76,000
Bills Receivable: Sold for ₹31,000
Total realization from assets = ₹72,000 + ₹54,000 + ₹18,000 + ₹45,000 + ₹76,000 + ₹31,000 = ₹2,96,000
Calculation of Commission for Sanjay:
Sanjay's commission is 6% on the sale of all assets except cash.
Commission = 6% × ₹2,96,000 = ₹17,760
Adjustments for Creditors and Realization Expenses:
One creditor, amounting to ₹1,300, did not claim their payment.
Remaining liabilities to creditors = Total creditors - Unclaimed creditor = ₹2,70,000 - ₹1,300 = ₹2,68,700
Expenses of realization paid by Sanjay = ₹4,500
Calculation of Net Amount Available: Total amount realized from assets = ₹2,96,000
Sanjay's commission = ₹17,760
Net amount after commission = ₹2,96,000 - ₹17,760 = ₹2,78,240
Total expenses including liabilities = Creditors + Expenses = ₹2,68,700 + ₹4,500 = ₹2,73,200
Net amount after settling liabilities and expenses = ₹2,78,240 - ₹2,73,200 = ₹5,040
In conclusion, after the sale of assets, payment of expenses, liabilities, and Sanjay's commission, the firm has ₹5,040 left. This amount can be considered part of the remaining capital or distributed as per the firm’s agreement.
The total realization from the sale of assets was ₹2,96,000, from which Sanjay's commission of ₹17,760 was deducted. After accounting for liabilities of ₹1,73,200, the remaining amount was ₹1,05,040. This can be considered for future distribution per agreement among partners.
;
