Loss on realisation ₹84,000 was to be distributed between Sam and Shafiq (partners) in the ratio of 4 : 3 at the time of dissolution of partnership firm. Calculate the amount to be transferred to Shafiq's capital account.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹36,000 to be debited
A loss on realisation reduces the partners’ capital, so it is debited to their capital accounts (Partners’ Capital A/cs Dr. To Realisation A/c) in the profit sharing ratio.
Shafiq’s share:
= ₹84,000 × 3/7
= ₹36,000 (debited)
₹48,000 is Sam’s share (4/7); a credit would be right only for a profit on realisation.