At the time of dissolution of the firm, partners capital Rs 20,000, liabilities Rs 15,000 and cash balance Rs 1,000 amount realized from sundry assets Rs 9,000. What is loss on realization?
Total of both column of Balance Sheet should be same. Loss on realization = Total of liability side – Total of Assets side = (20,000 + 15,000) – (10,000 +9000) = 35000 – 10000 = 25000 Rs 9000 realized from 34,000 Assets = It means loss on realization will Rs 25,000.
