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Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)
CapitalMachinery70,000
Meena 90,000Investments50,000
Tina 80,0001,70,000Stock22,000
Sundry creditors60,000Sundry Debtors1,03,000
Bills payable20,000Cash at bank5,000
2,50,0002,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

Which mode of dissolution is highlighted in the above case?

Solution

✅ Correct Option: 2

Since Meena and Tina mutually decided to dissolve the firm on March 31, 2017, this represents dissolution by mutual consent or agreement among all the partners. No insolvency, court order, or contingency is involved.

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