# IGCSE Accounting Paper-2: Specimen Questions with Answers 71 - 73 of 189

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### Passage

Singer and Dancer are partners sharing profit in the ratio of 3: 2. Their balance sheet on 31st March 2014 was as follows:

 Liabilities Amount Assets Amount Singer՚s Capital 32500 Bank 40500 Dancer՚s Capital 11500 Stock 7500 Creditors 48000 Debtors - 21500Less: Provision for doubtful debts - 500 21000 Reserve fund 13500 Fixed Assets 36500 105500 105500

On 31st March 2014, they decided to dissolve the firm and the following information was provided by them: (i) Debtors were realized at a discount of 5 % ; (ii) Stock at £ 7000; (iii) Fixed assets at £ 42000; (iv) realization expenses were £ 1500; (v) All the creditors were fully paid.

## Question 71 (3 of 5 Based on Passage)

Edit

### Write in Short

What will be the take away amount of Singer and Dancer after the firm՚s dissolved?

### Explanation

The take away capital of Singer and Dancer upon dissolution of the firm is £ 42355 and £ 18070.

 Particulars Singer Dancer Particulars Singer Dancer To bank A/c 42355 18070 By balance b/d 32500 11500 Reserve fund 8100 5400 Realization profit 1755 1170 42355 18070 42355 18070

Reserve fund = 13500 in 3: 2 = 8100 and 5400

## Question 72 (4 of 5 Based on Passage)

Edit

### Write in Short

What are the reasons for dissolution of a firm?

### Explanation

Dissolution of the firm may be due to any of the following reasons:

(i) Dissolution by agreement – mutually agreement between the partners

(ii) Compulsory dissolution – When one or all partners become insolvent.

(iii) On the event of contingencies

(iv) Dissolution by notice

(v) Dissolution by court

## Question 73 (5 of 5 Based on Passage)

Edit

### Write in Short

Will Singer and Dancer earn a profit or incur a loss, after the realization of their assets and paying their creditors in full?

### Explanation

 Particulars Amount Amount Particulars Amount Amount Assets transferred Provision for doubtful debts 500 Stock 7500 Creditors 48000 Debtors 21500 Bank Fixed assets 36500 Debtors 20425 Bank expenses stock 7000 Creditors 48000 Fixed assets 42000 Realization expenses 1500 Profit transferred (Bal Fig) Singer՚s capital 1755 Dancer՚s Capital 1170 2925 117425 117425

Profit = 2925

Singer = ; Dancer =

Debtors = 21500 – 5 %= 21500 – 1075 = 20425

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