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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

Read the following information and answer the following 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 will be the profit or loss on realisation?

Options:

Profit (₹22,680)

Loss (₹22,680)

Profit (₹12,980)

Loss (₹12,980)

Correct Answer:

Loss (₹22,680)

Explanation:

The correct answer is option 2- Loss (22,680).

 REALISATION ACCOUNT

Particulars Amount (₹) Particulars Amount (₹)
To Assets (Note 1) 1,45,730 By Creditors 23,150
To Cash A/c (Creditors paid) 23,150 By Cash A/c (assets realised) 1,24,910
To Cash A/c (dissolution expenses) 1,860 By loss transferred to partners Capital A/c
X's Capital A/c (4/7)                             12,960
Y Capital A/c (3/7)                                9,720		 22,680
  1,70,740   1,70,740

So, total loss on realisation account is 22,680.

NOTE 1-
Assets = Creditors + capital - cash
           = 23,150 + 1,25,030 + 2,070 - 4,520
           = ₹1,45,730

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