Sami and Salim were sharing profit and losses in the ratio of 3:2, their Balance Sheet as on 31^st December 2020 is as follows:

Balance Sheet of Sami and Salim as on 31^st December, 2020

Liabilities	Amount(RO)	Assets	Amount(RO)
Bills Payable	38,000	Cash Balance	11,500
Creditors	10,000	Stock	6,000
General Reserves	15,000	Debtors	19,000
Salim Loan	5,000	Furniture	32,000
Capital Sami Salim	10,000 8,000	Investment Profit and Loss	10,000 7,500
	86,000		86,000

The Firm was dissolved on 31^st December 2020 on the following terms:

1. Sami agreed to take the investment at RO 8,000 and to Pay Creditors.
2. Assets were realized at Stock RO 5,000; Debtors RO 18,500; Furniture RO 29,500.
3. Expenses on Realization amounted to RO 1,600
4. Bills Payable was accepted RO 37,000 as a Final Settlement.

Write the Necessary Journal Entries and Prepare the Realization Account, Partners Capital Account and Cash Account

Answer rating: 100% (QA)

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