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Question - Dissolution of Partnership Firm

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Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31 st March, 2012 was as under:

                                                               Balance Sheet as on

                                                                  31st March, 2012

LiabilitiesAmount(Rs.)AssetsAmount(Rs.)
Sundry Creditors16000Cash in hand500

Capital A/c

              Aaba

              Baba

 

2000

2000

Stock4500
  Debtors4000
  Plant and machinery5000
  Furniture2000
  Land and Building4000
 20000 20000

 

Due to weak financial position of the partners the firm is dissolved.

Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.

The assets are realised as follows :-

Stock Rs. 3,000, Plant and Machinery Rs. 3,000, Furniture Rs. 1,000, Land and Building Rs. 2,000 and Debtors Rs. 1,000 only.

Realisation expenses amounted to Rs. 500.

You are required to prepare necessary Ledger Accounts to close the books of the firm.

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