Partnership

Dissolution

Medium

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

Determine Gain/Loss on Realisation.

Loss ₹ 2,40,000

Gain ₹ 24,000

Loss ₹ 1,70,000

Loss ₹ 2,10,000

✅ Correct Option: 1

Given:

Sundry Assets = 8,50,000

Realisation = 80%

Step 1: Realised Value of Assets

Realised amount = 8,50,000 × 80%

= 6,80,000

Loss on assets = 8,50,000 − 6,80,000

= 1,70,000

Step 2: Unrecorded Liability

Paid = 40,000

Step 3: Realisation Expenses

Expenses = 30,000

Step 4: Total Loss on Realisation

Total Loss =

1,70,000 + 40,000 + 30,000

= 2,40,000

Final Answer:

Loss ₹2,40,000 (Option 1)

2022: 20 July Shift 1

A firm may not be dissolved by court in the following condition :

2026: 31 May Shift 1

On dissolution of a firm, creditors are transferred to:

2025: 2 June Shift 2

When realisation expenses are paid by the Partner on behalf of a Firm, which account will be credited:

2022: 23 Aug Shift 2

On 1st April 2022, A, B and C decided to dissolve their firm On the date of dissolution, Sundry debtors appeared in Balance Sheet at Rs. 6,00,000 and Provision for doubtful debt at Rs. 30,000 Debtors to extent of Rs. 60,000 were bad. In journal entry for realisation of debtors.

2026: 13 May Shift 2

Choose the correct sequence of Closing of Ledger Accounts at the time of dissolution of a Partnership Firm.

(A) Closing of Cash at Bank & Cash in hand account.

(B) Realisation of Assets and payment of external liabilities recorded in Realisation Account.

(D) Closing Partner's capital account by settling the final payment to partners or receipt from partners.

Choose the correct answer from the options given below:

2025: 27 May Shift 1

Dissolution by Court happens:

Determine Gain/Loss on Realisation.

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)