Partnership

Dissolution

Easy

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.

Existing Profit and Loss Account in the books of the firm will be shared/borne by partners in the ratio:

5 : 3 : 2

Equal Ratio

4 : 3 : 2

Ratio of closing capital claims

✅ Correct Option: 1

To determine how the existing Profit and Loss Account (P&L A/c) will be shared among partners G, K, and B, we need to consider their profit-sharing ratio, which is 5:3:2.

When a partnership is dissolved, any remaining profits or losses in the P&L A/c are shared according to the agreed ratio.

This means that any remaining profits or losses will be divided in the same ratio as the profits were shared during the partnership.

2026: 12 May Shift 1

After transferring liabilities like creditors and bills payables to the Realisation Account, in the absence of any information regarding their payment, such liabilities are treated as:

2025: 30 May Shift 2

When realisation expenses are paid by the firm on behalf of a partner, which account will be debited:

2025: 22 May Shift 1

In the case of the Dissolution of partnership firm, which accounts are opened:

(A) Realization Account

(B) Revaluation Account

(D) Bank Account

Choose the correct answer from the options given below:

2022: 20 July Shift 1

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

2026: 11 May Shift 1

On dissolution of a firm, partner's spouse loan account is transferred to:

2026: 6 June Shift 1

On dissolution of a firm, Partner's Loan Account is transferred to:

Existing Profit and Loss Account in the books of the firm will be shared/borne by partners in the ratio:

Solution

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