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Revaluation of Assets (Retirement)

Where a partn...

Question

Where a partner cannot clear his debts on dissolution, the other partners must clear these debts in the following manner _________________.

A

Partnership profit/loss sharing ratio

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B

Debts are shared equally

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C

In the ratio of their last agreed capital balance

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D

Both a and b

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Solution

The correct option is C In the ratio of their last agreed capital balance
Option C is the correct answer.

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Q. Where a partner cannot clear his debts on dissolution, the other partners must clear these debts in the following manner?

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Liabilities		₹	Assets		₹
Employees Provident Fund		17,000	Cash		6,100
Workmen Compensation Reserve		6,000	Stock		15,000
Investment Fluctuation Reserve		4,100	Debtors	50,000
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Prepare Revaluation Account and Partners' Capital Accounts.

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