Question

X; Y and Z are partners in a firm in the ratio of 4 : 3 : 2. On firm’s dissolution, firm’s total assets are ₹ 70,000, creditors are ₹ 15,000. Realisation expenses are ₹ 2,100. Assets realised 15% more than the book-value. Creditors were paid 2% more. For profit/loss on realisation, Y’s capital account will be debited/credited with:

Options

• Credit ₹ 8,100

• Credit ₹ 2,700

• Debit ₹ 2,700

• Debit ₹ 2,400

Answer 1

Credit ₹ 2,700

Explanation:

Assets realised = ₹ 70,000 × 15%

= ₹ 80,500

Extra paid to creditors = ₹ 15,000 × 2%

= ₹ 300

Realisation expenses = ₹ 2,100

Profit on realisation:

= (₹ 80,500 − ₹ 70,000) − ₹ 300 − ₹ 2,100

= ₹ 10,500 − ₹ 300 − ₹ 2,100

= ₹ 8,100

Y’s share (ratio 4 : 3 : 2 → Y = 3/9)

= ₹ 8,100 × 39

= ₹ 2,700 (credit)