Question

Loss on realization of 84,000 was to be distributed between Sam and Shafiq (partners) in the ratio of 4:3 at the time of the dissolution of the partnership firm. Calculate the amount to be transferred to Shafiq’s capital account.

• A. 36,000 to be credited
• B. 36,000 to be debited
• C. 48,000 to be credited
• D. 48,000 to be debited

Answer 1

Answer: (B)

36,000 to be debited

Answer 2

1. Total Loss on Realization: - The total loss is 84,000.
2. Ratio of Distribution: - Sam and Shafiq share the loss in the ratio of 4:3. - Total parts in the ratio = $4 + 3 = 7$.
3. Loss Allocation to Shafiq: - Shafiq's share of the loss: $\text{Shafiq's loss} = \left(\frac{3}{7}\right) \times 84,000 = \frac{252,000}{7} = 36,000$ 4. Effect on Shafiq's Capital Account: - Since this is a loss, it will reduce Shafiq's capital account. Therefore, the amount to be transferred to Shafiq's capital account will be debited. Thus, the amount to be transferred to Shafiq's capital account is 36,000 to be debited.