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X , Y and Z commenced business on 1st Ap...

X , Y and Z commenced business on 1st April , 2016 with capitals of ₹ 5,00,000 , ₹ 4,00,000 and ₹ 3,00,000 respectively . Profits and losses were shared in the ratio of ` 4 : 3 : 3`. Interest on Capitals was paid at 5 % p.a. During 2016-17 and 2017-18 they earned profit of ₹ 2,00,000 and ₹ 2,50,000 (before allowing interest on capital) . Drawings of each partner were ₹ 50,000 per year . On 31st March , 2018 the firm was dissolved . Creditors on that date were ₹ 1,20,000 . The assets realised ₹ 13,00,000 net .
Give necessary accounts to close the books of the firm .

Text Solution

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Balance Sheet on the date of dissolution is not given . Further , partner's capitals and book value of assets on the date of dissolution are also not given . Hence , first of all balances of partner's capital are ascertained . After that , Balance Sheet on the date of dissolution , i.e., 31st March , 2018 , will be prepared to ascertain the value of assets .

Net Profit (2016-17) = Total Profit - Interest on Capital = ₹ 2,00,000 - ₹ 60,000 = ₹ 1,40,000 ,
Net Profit (2017-18) = Total Profit - Interest on Capital = ₹ 2,50,000 - ₹ 62,500 = ₹ 1,87, 500.
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