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Question : Phiu, Queen and Lilly commenced business on 1st April 2019 with capitals of:

Phiu -Rs. 2,00,000; Queen -Rs. 2,00,000 and Lilly -Rs. 1,00,000. Profits are shared in the ratio of 4:3:3. Capital carried interest @ 5% p.a. During the year 2019-20, the firm suffered a loss of Rs. 1,50,000 before allowing interest on capital. Drawings of each partner during the year were Rs. 20,000. On 31st March 2020, the partners agreed to dissolve the firm as it was no longer profitable. The creditors on that date were Rs. 40,000. The assets realised a net value of Rs. 3,20,000 and the expenses of realisation were Rs. 7,000.

The value of sundry assets are __________and loss of realization will be____________.

Option 1: The value of sundry assets are Rs 3,50,000, and loss on realisation Rs 17,000

Option 2: The value of sundry assets Rs 3,30,000 and loss on realization Rs 17000

Option 3: The value of Sunday assets Rs 33000 and loss on realization Rs 17000

Option 4: None of the above


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: The value of sundry assets Rs 3,30,000 and loss on realization Rs 17000


Solution : Answer = The value of sundry assets is Rs 3,30,000 and the loss on realization is Rs 17,000
If there is a loss, no interest will be allowed on capital

Memorandum Balance Sheet
Liabilities Amount Assets Amount
Capitals S.Assets (b/f) 3,30,000
P[2,00,000-20,000-60,000] 1,20,000
Q[2,00,000-20,000-45,000] 1,35,000
L[1,00,000-20,000-45,000] 1,35,000
Creditor 40,000
3,30,000 3,30,000

Realisation A/c
To Sundry Assets 3,30,000 By Sundry Liabilities
To Bank By Creditor 40,000
Creditor-40,000 By Bank(assets realised) 3,20,000
Exp-7,000 47,000 By Loss 17,000
3,77,000 3,77,000

Hence, the correct option is 2.

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