L and M were partners in a firm sharing profits in the ratio of `2 : 2 : 3` . On 28th February ,
Channel: Doubtnut
Date: 29/03/2020

L and M were partners in a firm sharing profits in the ratio of `2 : 2 : 3` . On 28th February , 2016 the firm was dissolved . After transferrring assets (other than cash) and outsiders\' liabilities to Realisation Account you are given the following information : (i) A creditors for ? 1, 40 , 000 accepted building valued at ? 1, 80 , 000 and paid to the firm ? 40 , 000 . (ii) A second creditor for ? 30 , 000 accepted machinery valued at ? 28 ,000 in full settlement of his claim . (iii) A third creditor amounting to ? 70 , 000 accepted ? 30 , 000 in cash and investments of the book value of ? 45, 000 in full settlement of his claim . (iv) Loss on dissolution was ? 4,000 . Pass necessary Journal entries for the above transactions in the books of the firm assuming that all payments were made by cheque .