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Home Questions 3N4DA4PXEB
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

From the information provided below, calculate various questions asked in questions.

Following is the Balance Sheet of Ashwani and Bharat on March 31, 2024.

Balance Sheet Ashwani and Bharat as on March 31, 2024

Liabilities

 Amount (₹)

Assets

 Amount (₹)
Creditors  76,000 Cash at bank  17,000
Mrs. Ashwani's loan  10,000 Stock  10,000
Mrs. Bharat loan  20,000 Investments  20,000
Investment fluctuation reserve  2,000 Debtors-                                    40,000
Less: Provision for doubtful debts 4,000		  36,000
General Reserve  20,000 Buildings  70,000
Capitals:
Ashwani- 20,000
Bharat - 20,000		  40,000 Goodwill  15,000
Total  1,68,000 Total  1,68,000

 The firm was dissolved on that date. The following was agreed transactions took place.

(i) Aswhani promised to pay Mrs. Ashwani's loan and took away stock for ₹8,000.

(ii) Bharat took away half of the investment at 10% less. Debtors realised for ₹38,000. Creditor's were paid at less of ₹380. Buildings realised for ₹1,30,000, Goodwill ₹12,000 and the remaining Investment were sold at ₹9,000. An old typewriter not recorded in the books was taken over by Bharat for ₹600. Realisation expenses amounted to ₹2,000.

Investment Fluctuation Reserve will be:

Options:

Transferred to debit side of realization A/c

Transferred to credit side of realization A/c

Distributed amongst partners in profit sharing ratio

Subtracted from Value of Investment

Correct Answer:

Transferred to credit side of realization A/c

Explanation:

The correct answer is option 2- Transferred to credit side of realization A/c.

If there are investments on the assets side then related reserve is transferred to realisation account. So, it is transferred to credit side of realization A/c.

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