At the time of dissolution of a firm, Creditors are ₹ 70,000; Firm’s Capital is ₹ 1,20,000; Cash Balance is ₹ 10,000. Other assets realised ₹ 1,50,000. Gain/Loss in the realisation account will be:

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₹ 30,000 (Loss) Explanation: Total Assets Realized = Cash Balance + Other Assets Realized = 10,000 + 1,50,000 = ₹ 1,60,000 Total Liabilities = Creditors (₹ 70,000) Partner’s Capital = ₹ 1,20,000 Total Liabilities and Capital = ₹ 70,000 + ₹ 1,20,000 = ₹ 1,90,000 Profit/Loss = Total Assets Realized – Total Liabilities and Capital = ₹ 1,60,000 – ₹ 1,90,000 = ₹ 30,000 (Loss)

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