Practicing Success
Read the following case study and answer the question: Naina and Nayantara are Partners in a firm, sharing profits in ratio 3 : 2. They decided to dissolve their firm on 31, March 2021 when their Balance-Sheet was as follows:
The Assets and liabilities were disposed off as follows: (a) Machinery was given to creditors in full settlement of their amount and stock was given to Bills Payable in full settlement. |
Journal entry for payment of realisation expense will be: |
Bank/Cash A/c Dr. 5,000 Realisation A/c Dr. 5,000 Naina's Capital A/c Dr. 3,000 Realisation A/c Dr. 5,000 |
Realisation A/c Dr. 5,000 |
The correct answer is Option (4)- When no information is given then it is implemented that realisation expenses are paid by the firm. |