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A and B have capitals of ₹40,000 and ₹25,000 respectively. The firm incurred a realisation loss of ₹13,000, which was borne equally by both partners. What will be A’s final capital after realisation?

Answer and explanation

Correct answer: ₹33,500

The realisation loss of ₹13,000 is shared equally, so A’s share is ₹6,500. Final capital = Initial capital − A’s share of loss = ₹40,000 − ₹6,500 = ₹33,500. The unchanged amount of ₹40,000 ignores the loss, while adding the loss would be conceptually incorrect. Exam tip: For an equally shared loss, divide the total loss by the number of partners and deduct each partner’s share from their capital.

Related tags

DissolutionPartner AccountsRealisation LossCapital AdjustmentNumerical AccountingDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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