Partnership

Dissolution

Medium

common

Stock at the time of dissolution was appearing in books at Rs 50,000. Half of the stock was sold at a discount of 20% and the remaining was taken over by one of the partners at a 10% discount. What amount was received in cash at the time of realization of stock.

Rs 25,000

Rs 20,000

Rs 22,500

Rs 45,000

✅ Correct Option: 2

Book value of stock = Rs 50,000

Half of stock = Rs 50,000 ÷ 2 = Rs 25,000

First half - Sold in market:

Value = Rs 25,000

Discount = 20%

Amount received = Rs 25,000 - (20% of Rs 25,000)

Amount received = Rs 25,000 - Rs 5,000 = Rs 20,000 (Cash)

Second half - Taken over by partner:

Value = Rs 25,000

Discount = 10%

Amount = Rs 25,000 - (10% of Rs 25,000)

Amount = Rs 25,000 - Rs 2,500 = Rs 22,500 (Not in cash)

When a partner takes over an asset, the amount is debited to the partner's capital account. No cash is received.

Cash received from realization of stock = Rs 20,000

The correct answer is Option 2.

2022: 30 Aug Shift 2

The treatment of Goodwill appearing in the balance sheet will be:

2025: 22 May Shift 1

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

2026: 20 May Shift 1

Match List-I with List-II

List-I (Cases for payment of realisation expenses)	List-II (Journal entry)
(A) When realisation expenses are incurred and paid by the firm	(I) Realisation A/c Dr. To Partner's Capital A/c
(B) When realisation expenses are paid by a partner on behalf of the firm	(II) No entry is required
(C) When a partner has agreed to bear the realisation expenses and the realisation expenses are paid by the firm	(III) Realisation A/c Dr. To Bank A/c
(D) When a partner has agreed to bear the realisation expenses and the partner himself pays the realisation expenses.	(IV) Partner's Capital A/C Dr. To Bank A/c

Choose the correct answer from the options given below:

2025: 13 May Shift 2

In which of the following the Economic relationship between the partners comes to an end?

2026: 11 May Shift 2

When the firm is dissolved, its books of account are to be closed and the profit or loss arising on realisation of its assets and discharge of liabilities is to be computed. For this purpose, a Realisation Account is prepared. Identify correct statements related to Realisation Account.

A. Transfer all assets (other than cash in hand, bank balance and fictitious assets, if any), and all external liabilities to this account.

B. The balance in this account is not transferred to partners' capital accounts in the profit sharing ratio.

C. The balance in this account is transferred to partners' capital accounts in the profit sharing ratio.

D. Ascertain the net effect (profit or loss) of realisation of assets and payment of liabilities.

Choose the correct answer from the options given below:

2025: 30 May Shift 2

Unrecorded liabilities when paid are shown in:

Stock at the time of dissolution was appearing in books at Rs 50,000. Half of the stock was sold at a discount of 20% and the remaining was taken over by one of the partners at a 10% discount. What amount was received in cash at the time of realization of stock.

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