CUET Accountancy 2024
Accountancy
Dissolution of Partnership Firm
Easy
G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.
Existing Profit and Loss Account in the books of the firm will be shared/borne by partners in the ratio:
Existing Profit and Loss Account in the books of the firm will be shared/borne by partners in the ratio:
Correct Option: 1
To determine how the existing Profit and Loss Account (P&L A/c) will be shared among partners G, K, and B, we need to consider their profit-sharing ratio, which is 5:3:2.When a partnership is dissolved, any remaining profits or losses in the P&L A/c are shared according to the agreed ratio.This means that any remaining profits or losses will be divided in the same ratio as the profits were shared during the partnership.
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CUET Accountancy 2024
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