Practicing Success
Which of the following will be shown in Capital Account at the time of firm's dissolution? |
Goodwill appearing in old Balance Sheet Investment Fluctuation Reserve and Investment of equal amount in old Balance Sheet Workmen Compensation Reserve of ₹20,000 against which workmen claim is ₹25,000 P & L (Dr) Balance of ₹30,000 |
P & L (Dr) Balance of ₹30,000 |
The correct answer is Option (4) - P & L (Dr.) Balance of ₹30,000. * Goodwill appearing in old Balance Sheet- Goodwill is an intangible asset, and during dissolution, it is transferred to realisation A/c like any other assets. * Investment Fluctuation Reserve and Investment of equal amount in old Balance Sheet- The Investment Fluctuation Reserve and Investment is adjusted during dissolution. There is no extra reserve. * Workmen Compensation Reserve of ₹20,000 against which workmen claim is ₹25,000- As the reserve is of 20000 and claim is more than reserve. Excess of claim is a liability of the firm. * P & L (Dr.) Balance of ₹30,000- The Profit and Loss (Dr.) balance of ₹30,000 is an accumulated loss which is debited to the partner's Capital Account. |