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Question : A and B were partners from 1st April 2018 with capitals of Rs. 60,000 and Rs. 40,000 respectively. They shared profits in the ratio of 3: 2. They carried on business for two years.

In the first year ended 31st March 2019, they earned a profit of Rs. 50,000 but in the second year ended 31st March 2020, a loss of Rs. 20,000 was incurred. As the business was no longer profitable, they dissolved the firm on 31st March 2020. Creditors on that date were Rs 20,000. The partners withdrew for personal use of Rs. 8,000 per partner per year. The assets realised Rs. 1,00,000. The expenses of realisation were Rs. 3,000.
Question:
The profit/loss on realization is

Option 1: Profit Rs 21,000

Option 2: Loss Rs 21,000

Option 3: Loss Rs 2,100

Option 4: Profit Rs 2,100


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Loss Rs 21,000


Solution : Answer = Loss Rs 21,000

Realisation a/c
To sundry assets 1,18,000 S.Liabilities
To Cash By Creditor 20,000
Creditors 20,000 By Cash (assets realised) 1,00,000
Expenses 3,000 By Loss 21,000
1,41,000 1,41,000

Hence, the correct option is 2.

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