Multiple Choice Questions on At the time of dissolution of a firm Creditors are Rs70 000 Partners rsquo capital is Rs1 20 000 Cas........... for Commerce 12th Preparation

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Multiple Choice Questions

At the time of dissolution of a firm Creditors are Rs70 000 Partners rsquo capital is Rs1 20 000 Cas...........

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    At the time of dissolution of a firm, Creditors are Rs70,000; Partners’ capital is Rs1,20,000; Cash Balance is Rs10,000. Other assets realised Rs1,50,000. Profit/Loss in the realisation account will be :

    Rs60,000 (Loss)

    Incorrect Answer

    Rs80,000 (Profit)

    Incorrect Answer

    Rs40,000 (Loss)

    Incorrect Answer

    Rs30,000 (Loss)

    Correct Answer
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    Explanation:

    - At dissolution, a firm settles debts and distributes remaining assets.

    - Creditors are owed Rs70,000.

    - Partners have Rs1,20,000 in capital.

    - Firm has Rs10,000 in cash balance.

    - Other assets realized Rs1,50,000.

    - Total available cash = Rs10,000 (cash balance) + Rs1,50,000 (realized assets) = Rs1,60,000.

    - Total liabilities including partners = Rs70,000 (creditors) + Rs1,20,000 (partners’ capital) = Rs1,90,000.

    - Cash available is Rs1,60,000; liabilities are Rs1,90,000.

    - The loss in realization is Rs1,90,000 - Rs1,60,000 = Rs30,000.

    - Correct option is: Option:4, Rs30,000 (Loss)

    By: santosh
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