Read the following passage and answer the question.
X & Y are partners sharing profits and losses in the ratio 4:3. They decide to dissolve the firm. On the date of dissolution following information is available-
X's Capital = ₹1,25,030
Y's Capital = ₹2,070
Creditors = ₹23,150
Cash = ₹4,520
Remaining assets realised at ₹1,24,910 and the dissolution expenses are ₹1,860. Both Partners are solvent.
What is the balance of cash account in last?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- No balance.
Partner's capital account are closed in the last through bank or cash account. Any deficiency or surplus of cash is adjusted. No balance will be left in bank or cash account in the end. Debit side or credit side will be equal.
Cash A/c
| PARTICULARS | AMOUNT (₹) | PARTICULARS | AMOUNT (₹) |
| To balance b/d | 4,520 | By realisation A/c (creditors paid) | 23,150 |
| To realisation A/c (assets realised) | 1,24,910 | By realisation A/c (expenses) | 1,860 |
| To Y's Capital A/c (Cash brought in) | 7,650 | By X's Capital A/c (Final payment) | 1,12,070 |
| 1,37,080 | 1,37,080 |