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Question : At the time of dissolution of a firm, Creditors are Rs.40,000, Partners' capital is Rs.2,00,000; Cash Balance is Rs.20,000, and other assets are realized Rs.2,00,000. Profit/Loss in the realization account will be

Option 1: 60,000 (Loss)

Option 2: 40,000 (Loss)

Option 3: 20,000 (Profit)

Option 4: 20,000 (Loss)


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: 20,000 (Loss)


Solution : Answer = 20,000 (Loss)

Memorandum balance sheet
To Creditor 40,000 Cash 20,000
Partner's capital 2,00,000 S.Assets(b/f) 2,20,000
2,40,000 2,40,000

Realisation a/c
To S.Assets 2,20,000 S.Liabilities(Creditor) 40,000
To Bank 40,000 Bank(assets realised) 2,00,000
Creditor Loss(b/f) 20,000
2,60,000 2,60,000

Hence, the correct option is 4.

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