Mears, Pugh and Stafford were in partnership sharing profits and losses in the ratio 5:3:2 respectively.

The partners had agreed that the partnership would be dissolved on 1 April 2023.

The partnership balance sheet at 31 March 2023 was as follows:

Additional information 1 A vehicle could have been sold for £18,800. However, because this would have generated a loss of £3,200, it was decided instead that Pugh would take the vehicle at its carrying amount as part of his settlement.
2 All other non-current assets were found to be impaired. They could only be disposed of for the recoverable amount. The fair value of these assets was £150,000 and the value in use was £125,000.
3 Inventory would usually be sold at a mark-up of 25% on cost price. However, because the inventory was damaged, it was actually sold for £14,220 less than this amount.
4 A bankrupt customer owed £2,350. All other trade receivables paid in full after being given a 5%
settlement discount.
5 The partnership is owed a refund of £100 from a supplier and this has not been accounted for. All other trade payables were settled in full after receiving a 2% discount.
6 The costs of dissolving the partnership of £1,951 were paid by cheque.
Mears was bankrupt and so was unable to repay any amounts owing to the partnership from her own personal finance.
Required:

(a) Prepare the realisation account for the partnership at 1 April 2023.

(b) Prepare the partnership capital accounts for Mears, Pugh and Stafford at 1 April 2023.

(c) Prepare the partnership bank account at 1 April 2023 to show all transactions relating to the dissolution of the partnership.

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Non-current assets Current assets Inventory Trade receivables Current liabilities Bank overdraft Trade payables Capital accounts Mears Pugh Stafford Current accounts Mears Pugh Stafford Mears, Pugh and Stafford Balance sheet at 31 March 2023 31,600 14,850 9,210 8,900 25,000 84,000 56,000 (19,500) 31,704 36,136 185,000 46,450 231,450 18,110 213,340 165,000 48,340 213,340