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Question - Dissolution of Partnership Firm

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Question

A, B, and C were partners sharing profits and losses in the proportion of 2:2:1. Following is their balance sheet as on 31st March, 2013.

Balance sheet as on 31st March, 2013

 

Liabilities
Amount
(Rs. )
Assets
Amount
(Rs.)
Amount
(Rs.)
Capital Account
 
Machinery
 
25000
A
30000
Stock
 
10000
B
10000
Debtors
      27500
 
C
10000
Less: R.D.D.
  • 1500
26000
General Reserve
3000
Investment
 
12000
Creditors
20000
Profit and Loss A/c
 
9000
A’s Loan Account
4000
Bank
 
2000
Bills Payable
7000
   
 
84000
  
84000

On the above date, the partners decided to dissolve the firm.

(1)  Assets were realised as -

Machinery Rs. 22,500, Stock Rs. 9,000, Investment Rs. 10,500, Debtors Rs. 22,500

(2) Dissolution expenses were Rs. 1,500.

(3) Goodwill of the firm realised Rs. 12,000

Pass the necessary journal entries int he books of the firm.

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