On dissolution of the firm, partner A demands that his loan of Rs. 1,00,000 should be paid before, payment of Capitals of the partners, whereas partners B and C demand that Capitals should be paid before the payment of A’ s loan. State the order of payment.
SOLUTION As per Section 48 of the Indian Partnership Act, 1932, partner’s loan is paid before the payment of partner’s Capitals.
A and B are partners in a firm sharing profits in the ratio of 3: 2. Mrs. A has given a loan of Rs. 20,000 to the firm and the firm also obtained a loan of Rs. 10,000 from B. The firm was dissolved and its assets were realised for Rs. 25,000. State the order of payment of Mrs. A’ s Loan and B’ s Loan with reason, if there were no creditors of the firm.
SOLUTION As per Section 48 of the Indian Partnership Act, 1932, Mrs. A's Loan of Rs. 20,000 will be paid first and after that B' s Loan will be paid…
How would you treat Employees Provident Fund shown on the liability side a of balance sheet, at the time of dissolution of partnership firm and why?
SOLUTION Employee’s Provident Fund is a liability to the employees. Hence, it will be transferred to the credit side of Realisation Account and will be paid off.
How is Workmen Compensation Reserve shown in the Balance Sheet of a partnership firm, treated at the time of its dissolution?
SOLUTION Workmen Compensation Reserve to the extent of liability is Credited to Realisation A/c and the remaining amount of Workmen Compensation Reserve is Credited to the Partner’s Capital A/cs in…
Why partner’s loan is not transferred to Realisation A/c?
SOLUTION Partners' Loan is not an outside liability.
State the reason why a partner’s wife loan is transferred to Realisation A/c?
SOLUTION Wife Loan is an outside liability.
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