Question

K and A are partners in a firm. They share profits and losses in the ratio of $4:1$. They decide to dissolve the firm. K capital - Rs$1,60,000$, A Capital - Rs$1,00,000$, Total assets - Rs$3,95,000$, Total liabilities - Rs$1,35,000$. On dissolution assets realized Rs$3,50,000$ & liabilities including unrecorded liability settled at Rs$1,50,000$. What will be Net profit or loss on realization ?

• A. Profit $30,000$
• B. Loss $60,000$
• C. Profit $60,000$
• D. Loss $30,000$

Answer 1

Answer: (B)

Loss $60,000$

Realisation Account

Particulars	Amount	Particulars	Amount
To Sundry Assets	395000	By Sundry Liabilities	135000
To Bank A/c (Liabilities Paid)	150000	By Bank A/c (Assets realised)	350000
		By loss(transferred to partner's capital account) K - 48000 A - 12000	60000
Total	545000	Total	545000