INTERNATIONAL INDIAN SCHOOL, RIYADH

TERM- I WORKSHEET 2022-2023

ACCOUNTANCY- CLASS XII

ACCOUNTING FOR PARTNERSHIP FIRMS- FUNDAMENTALS

Q1. Ankur, Bhavna and Disha are partners in a firm. On 1st April 2011 the balance in their capital
accounts stood at ₹ 14,00,000, ₹ 6,00,000 and ₹ 4,00,000 respectively. They shared profits in the
proportion of 7:3: 2 respectively. Partners are entitled to interest on capital @6% per annum and
salary to Bhavna @ ₹ 50,000 p.a. and a commission of ₹3,000 per month to Disha as per the
provisions of the partnership deed.
Bhavna's share of profit (excluding interest on capital) is guaranteed at not less than ₹ 1,70,000 p.a.
Disha's share of profit (including interest on capital but excluding salary) is guaranteed at not less
than ₹1,50,000 p.a. Any deficiency arising on that account shall be met by Ankur. The profits of the
firm for the year ended 31st March 2012 amounted to ₹ 9,50,000. Prepare 'Profit and Loss
Appropriation Account' for the year ended 31st March 2012.

Q2. A, B & C were partners in a firm having capitals of ₹ 80,000; ₹ 80,000; and ₹ 40,000 respectively.
Their Current Account balances were A: ₹ 10,000; B: ₹ 5,000 and C: ₹ 2,000 (Dr). According to the
partnership deed, the partners were entitled to an interest on capital @5% p.a. C, being the working
partner was also entitled to a salary of ₹ 6,000 p.a. The profits were to be divided as follows:
(a)The First 20,000 in proportion to their capitals.
(b) Next 30,000 in the ratio 5:3:2.
(c) Remaining profits to be shared equally.
The firm made a profit of ₹ 1,56,000 before charging any of the above items. Prepare Profit and Loss
Appropriation Account and pass the necessary Journal Entry for the apportionment of profit.

Q3. The partners of a firm distributed the profits for the year ended 31st March, 2012, ₹ 90,000 in
the ratio of 3:2:1 without providing for the following adjustments:
(i) A and B were entitled to a salary of ₹ 1,500 each per annum.
(ii) B was entitled to a commission of ₹ 4,500.
(iii) B and C had guaranteed a minimum profit of ₹ 35,000 p.a. to A.
(iv) Profits were to be shared in the ratio of 3:3:2.
Pass necessary journal entry for the above adjustments in the books of the firm.
Q4. A, B and C were partners in a firm. On 1st April, 2008 their fixed capitals stood at ₹ 50,000,
₹25,000, and ₹25,000 respectively.
As per the provisions of the partnership Deed:
PTO

(i) B was entitled for a salary of ₹5,000 p.a.

 (ii) All the partners were entitled to interest on capital @5% p.a.
(iii) Profits were to be shared in the ratio of capitals.
The net profit for the year ended 31st March, 2009 of ₹ 33,000 and 31st March, 2010 of
₹45,000 was divided equally without providing for the above terms.

Pass an adjustment Journal entry to rectify the above error.

Q5. Anand, Bhaskar, and Dinkar are partners in a firm. On 1st April, 2011, the balance in their capital
accounts stood at ₹ 10,00,000, SS8,00,000 and ₹6,00,000 respectively. They shared profits in the
proportion of 5:4:3 respectively. Partners are entitled to interest on capital @10% per annum and
salary to Bhaskar @4,000 per month and a commission of ₹ 16,000 per quarter to Dinkar as per the
provisions of the partnership deed.

Anand's share of profit (excluding interest on capital) is guaranteed at not less than ₹1,90,000 p.a.
Bhaskar's share of profit (including interest on capital but excluding salary) is guaranteed at not less
than ₹2,45,000 p.a. Any deficiency arising on that account shall be met by Dinkar. The profits of the
firm for the year ended 31st March, 2012 amounted to ₹8,32.000. Prepare 'Profit and Loss
Appropriation Account for the year ended 31st March, 2012.

Q6. Sheela and Sankalita are partners sharing profits and losses in the ratio of 2:3. Sheela's capital
account showed a balance of ₹4,00,000 while Sankalita's capital account stood at ₹6,00,000. The
current account balances of Sheela and Sankalita were ₹1,00,000 and ₹1,50,000 respectively. The
profit earned during the year is ₹1,02,000.

The partnership deed laid down that Sheela should be paid a salary of ₹ 1,000 p.m. while Sankalita is
entitled to a commission of ₹15,000. Interest on Capital is to be credited at 6% p.a. Sheela and
Sankalita withdrew ₹ 12,000 and ₹18,000 respectively during the year. Interest on Sheela's drawing
was decided to be ₹2,000 and on Sankalita's drawings to be ₹3,000.

Prepare Profit and Loss Appropriation Account and Partners' Capital and Current Accounts.
Q7. Verma and Kaul are partners in a firm. The partnership agreement provides that interest on
drawings should be charged @6% p.a. Verma withdraws ₹ 2,000 per month in the beginning of each
month starting from 1st April, 2015 to 31st March, 2016. Kaul withdrew ₹3,000 per quarter, starting
from 1st April, 2015. Calculate interest on partners' drawings.

Q8. A and B are partners sharing profit or loss in the ratio of 3:2 having capital balances of ₹50,000
and ₹40,000 on 1st April, 2010. On 1st July, 2010, A introduced ₹10,000 as his additional capital
whereas B introduced only ₹ 1,000. If the interest on capital is allowed to partners @ 10% p.a.
Calculate the interest on capital if the financial year closes on 31st March.

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CHANGE IN PROFIT SHARING RATIO AMONG EXISTING

PARTNERS
Q1. A partnership firm earned net profits during the last three years as follows:

YEARS NET PROFIT (₹)

2007-2008 1,90,000
2008-2009 2,20,000
2009-2010 2,50,000
The capital employed in the firm throughout the above mentioned period has been ₹ 4,00,000.
Having regard to the risk involved, 15% is considered to be a fair return on the capital. The
remuneration of all the partners during this period is estimated to be ₹ 1,00,000 per annum.

Calculate the value of goodwill on the basis of

(i) two years' purchase of super profits earned on average basis during the above
mentioned three years and
(ii) by capitalization method.

Q2. A business has earned average profits of 1,00,000 during the last few years and the normal rate
of return in similar business is 10%. Find out the value of goodwill by:

(i) Capitalisation of Super Profit Method and

(ii) Super Profit Method if the goodwill is valued at three years' purchase of super
profit. The assets of the business were ₹ 10,00,000 and its external liabilities ₹
1,80,000.

Q3. J and K are partners in a firm. Their capitals are: J ₹ 3,00,000 and K ₹ 2,00,000. During the year
ended 31.3.2010, the firm earned a profit of ₹ 1,50,000. Assuming that the normal rate of return is
20%, calculate the value of goodwill of the firm:

(i) By capitalisation method and

(ii) By super profit method if the goodwill is valued at two years' purchase of super
profits.

Q4. W and U shared profits and losses in the ratio of 3:1. They admitted V as a new partner in whose
favor W surrenders half of his share and U surrenders 1/16th of his share. Calculate the new profit-
sharing ratio.

Q5. Hema and Prema share profits in the ratio of 57. They admit Rema for one sixth share which she
acquires in the ratio 3:2 from the old partners, Calculate the sacrificing ratio and the new profit-
sharing ratio.
Q6. George and Henry are partners sharing profits and losses in the ratio of 3:2. They decided to
admit David as a new partner and to share future profits and losses equally. David brings in 50,000
as his capital. Goodwill of the firm is valued at ₹ 60,000. Pass the necessary journal entries: (i) when
no goodwill appears in books, (ii) when goodwill appears at ₹ 50,000 in books.

Q7. A and B are partners in a firm sharing profits in the ratio of 3:1. They admitted C as a new
partner. The new profit-sharing ratio of A, B and C will be 2:1:1. C brought ₹ 2,50,000 for his capital
but could not bring his share of goodwill (premium) ₹ 10,000 in cash. Pass necessary journal entries
in the books of the firm for the amount of capital brought in by C and for the treatment of goodwill.

Q8. M and N are in partnership sharing profits and losses in the ratio 5:3. O is admitted as a partner
for one-fifth share which he acquires entirely from M. O contributes ₹ 20,000 as capital and ₹ 8,000
as his share of goodwill. Journalise the above transactions when:

(i) goodwill is paid privately,

(ii) goodwill is retained in the business,
(iii) goodwill is withdrawn. Also calculate the new profit-sharing ratio.

Q9. X, Y and Z are partners in a firm sharing profits and loses as 3:2:1. Their Balance Sheet as at 31st
March, 2016 was as follows:
 Liabilities ₹ Assets ₹
Sundry Creditors 4,50,000 Cash in Hand 60,000
General Reserve 2,40,000 Cash at Bank 60,000
Bank Loan 2,10,000 Sundry Debtors 1,80,000
Partners’ Capital A/cs Stock 3,60,000
X 3,00,000 Bills Receivable 1,50,000
Y 2,40,000 Plant and Machinery 8,40,000
Z 2,10,000 7,50,000
16,50,000 16,50,000
From 1st April, 2016, they agreed to alter their profit-sharing ratio as 5:3:2. It is also decided that:

a. Plant and Machinery should be valued at ₹ 9,00,000.

b. A provision of 5% on Sundry Debtors be made for Doubtful Debts.
c. The goodwill of the firm be valued at ₹3,00,000.
d. The stock be reduced to ₹ 3,30,000.
e. Total capital of the firm will be ₹ 12,00,000.
Goodwill was not to appear in the books.

Q10. L, M and N were partners in a firm sharing profits in the ratio of 2:2:1. Their Balance Sheet as at
31st March, 2015 was as follows: Balance Sheet as at 31st March, 2015
Liabilities ₹ Assets ₹
Creditors 60,000 Land 1,70,000
Bills Payable 40,000 Building
Outstanding Expenses 50,000 Plant 2,00,000
General Reserve 1,00,000 Stock 80,000
Capital: Debtors 50,000
L 1,40,000 Cash 10,000
M 1,20,000
N 1,40,000 3,60,000
6,10,000 6,10,000
From 1st April, 2015 the partners decided to share profits in the ratio of 1:2:3. For this purpose, it
was agreed that:
i. The goodwill of the firm should be valued at ₹ 1,20,000.
ii. Land should be revalued at ₹ 2,00,000. Building should be depreciated by 6%. PTO
iii. Creditors amounting to ₹ 6,000 were not to be paid.
It was decided among the partners that General Reserve has to be distributed among
the partners whereas goodwill and revised values of assets and liabilities are not to be
recorded in the books.
You are required to:
(i) Record the necessary journal entries to give effect to the above agreement.
(ii) Prepare the capital accounts of the partners.
(iii) Prepare the balance sheet of the reconstituted firm.

RETIREMENT & DEATH OF A PARTNER

Q1. E. Fand G are partners sharing profits in the ratio of 3:2:1. E retires and his share in profit will be
shared by F and G in the ratio of 2:3. Find out the new profit-sharing ratio.
Q2. Sonia, Tania, and Mania are partners sharing profits in the ratio of 6:4:2. Tania retires, and
goodwill of the firm is valued at ₹ 72,000. Sonia and Mania decided to share profit in future in the
ratio of 6:4. Pass necessary journal entries.

Q3. A, B and C are partners sharing profits and losses in the ratio of 3:1:1. On 31st March, 2016, their
Balance Sheet stood as under:
Liabilities ₹ Assets ₹
Sundry Creditors 25,000 Building 30,000
Bills Payable 40,000 Sundry Debtors 25,000
Partners’ Capital A/cs Machinery 42,000
A 25,000 Cash in Hand 5,000
B 15,000 Cash at Bank 3,000
C 10,000 50,000 Stock 10,000
1,15,000 1,15,000

On 1st April, 2016, B decides to retire from the firm. On that day, the assets and liabilities of the firm
are revalued as under:
(a) A provision @6% is to be created for doubtful debts.
(b) Building is revalued at ₹ 35,000.
(c) 5% Depreciation is to be provided on Machinery.
(d) Stock has been decreased by ₹ 1,000.
(e) Amount due to Sundry creditors has been decreased by ₹ 4,000.
Pass necessary journal entries on revaluation of assets and liabilities and prepare a
ReQ4valuation Account.

Q4. Sandeep, Praveen and Tara are partners sharing profits in the ratio of 3:2:1. On 1st April, 2012
Sandeep gave a notice to retire from the firm. Praveen and Tara decided to share future profits, in
the ratio of 2:3. The capital accounts of Praveen and Tara after all adjustments showed a balance of
₹ 64,000 and ₹ 1,00,000 respectively. The total amount to be paid to Sandeep was ₹ 1,23,000. This
amount was to be paid by Praveen and Tara in such a way that their capitals become proportionate
to their new profit-sharing ratio.
Pass necessary Journal entries for the above transactions in the books of the firm. Show your
workings clearly.

Q5. P, Q and R are partners in a firm without any partnership deed. R retires, his capital account
after making adjustment of reserves and profit on revaluation exists at ₹ 64,000. P and Q have
agreed to pay him ₹ 80,000 in full settlement of his claim. Record necessary journal entry for
goodwill on R's retirement.

Q6. E, F, G, H are partners sharing profits in the ratio of 1: 4:3: 5. E and H retire. Calculate new profit-
sharing ratio of remaining partners.

Q7. The Balance Sheet of X, Y and Z who were sharing profits as 5:3:2 stood as follows as at March
31, 2016:
 Liabilities ₹ Assets ₹
Partners’ Capital A/cs Cash at Bank 40,000
X 40,000 Sundry Debtors 80,000
Y 62,000 Stock 1,00,000
Z 33,000 1,35,000 Fixed assets 50,000
85,000 Advertisement Expenditure 10,000
10,000
50,000
2,80,000 2,80,000

X retired on March 31, 2016 and Y and Z continued to share profits in the ratio of 2:3 respectively. It
was decided to make the following adjustments on the retirement of X:

i. Goodwill of the firm is to be calculated at the rate of two years' purchase on the basis of last
three year's profits and losses. The profits and losses for the three years were as detailed
below:
YEAR ENDING ON PROFIT/LOSS ( ₹ )
31ST MARCH, 2014 60,000
31ST MARCH, 2015 (25,000) LOSS
31ST MARCH, 2016 85,000
ii. Depreciate fixed assets by 5%.
iii. Make a provision for doubtful debts at 5% on debtors.
iv. A liability for damages, included in creditors for 10,000 is finally settled at 78,000.
v. A provision for repair bills for 1,000 is also to be made.
In order to pay X on his retirement Y and Z were to contribute such an amount that their
capital is proportionate to their profit-sharing ratio and leave a balance of ₹15,000 in the
bank account. Prepare Ledger Accounts and Balance Sheet after X's retirement.
Q8. A, B and C were partners in a firm sharing profits in the ratio of 2: 1: 1. Their Balance Sheet as on
31st March, 2010 was as follows: PTO

Liabilities ₹ Assets ₹
Capitals A/cs Furniture 9,000
A 10,000 Stock 4,000
B 5,000 Debtors 6,000
C 5,000 20,000 Bills Receivable 2,000
3,200 Cash at Bank 5,000
3,000 Cash at hand 200
26,200 26,200

On 30th June, 2010, C died. Under the provisions of partnership deed, the executors of a deceased
partner were entitled to the following:
(i) Amount standing to the credit of partners' capital account.
(ii) Interest on capital @5% p.a.
(iii) Share of goodwill on the basis of two years purchase of the average profits of last three years.
(iv) Share of profit in the year of his death, till the date of his death on the basis of the last year's
profit.

The profits of the firm during the previous three years were as follows:
 YEAR PROFITs ( ₹ )
2007-2008 5,000
2008-2009 9,000
2009-2012 7,000
C's executors were paid ₹ 1,800 on 1st July, 2010 and the balance in three equal instalments of equal
intervals of 6 months starting from 31st December, 2010 with interest @10% per annum.
Pass necessary journal entries, at the time of C's death, prepare C's Capital Account and C's
Executor's Account up to 31st December, 2010.

Q9. X, Y and Z were partners in a firm sharing profits in 5:3:2 ratio. On 31st March, 2016, Z retired
from the firm. On the date of Z's retirement, the Balance Sheet of the firm was:
Liabilities ₹ Assets ₹
Creditors 27,000 Bank 80,000
Bills Payable 13,000 Debtors 20,000
Outstanding Rent 22,500 Less: Provision for Doubtful Debts 19,500
500
Provision for Legal Claims 57,500 Stock 21,000
Capital A/Cs Furniture 87,000
X 1,27,000 Land and Building 2,00,000
Y 90,000
Z 71,000 2,88,000
4,08,000 4,08,000

On Z's retirement, it was agreed that:

1. Land and Building will be appreciated by 5% and Furniture will be depreciated by 20%
2. Provision for Doubtful Debts will be made at 5% on Debtors and Provision for Legal Claims
will be made ₹ 60,000.
3. Goodwill of the firm was valued at ₹ 60,000. PTO
4. ₹ 70,000 from Z's Capital Account will be transferred to his Loan Account and the balance
will be paid to him by cheque.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of X and Y after Z's
retirement.

Q10. A, B and C were carrying on business in partnership sharing profits and losses in the ratio of
3:2:1, respectively. On 31st December, 2014, the Balance Sheet of the firm stood as follows:
Liabilities ₹ Assets ₹
Sundry Debtors 13,590 Cash 5,900
Capitals A/cs Debtors 8,000
A 15,000 Stock 11,690
B 10,000 Building 23,000
C 10,000 35,000 2,000
48,590 48,590

B retired on the above mentioned date on the following terms:

i. Buildings be appreciated by 7,000.
ii. Provision for doubtful debts be made at 5% on Debtors.
iii. Goodwill of the firm be valued at 79,000 and adjustment in this respect be made without
raising a Goodwill Account.
 iv. 25,000 be paid to B immediately and the balance due to him be treated as a loan carrying
interest at 6% per annum. Such loan is to be paid in three equal annual instalments together
with interest.
Pass the Journal entries to record the above mentioned transactions and show the Balance Sheet of
the firm as it would appear immediately after B's retirement. Also prepare B's Loan Account till it is
finally closed..

Q11. R, S and T were partners in a firm sharing profits in 2:2:1 ratio. On 1st April, 2004 their Balance
Sheet was as follows:
Liabilities ₹ Assets ₹
Profit and Loss Account 9,000 Cash 51,300
Sundry Creditors 25,000 Bills Receivable 10,800
Bank Loan 12,000 Debtors 35,600
Capital A/Cs Stock 44,600
R 80,000 Furniture 7,000
S 50,000 Plant and Machinery 19,500
T 40,000 1,70,000 48,000
2,16,800 2,16,800
S retired from the firm on 1st April, 2004 and his shares were ascertained on the revaluation of
assets as: stock ₹ 40,000; furniture ₹ 6,000; plant and machinery ₹ 18,000, building ₹ 40,000;
doubtful debts ₹ 1,700. The goodwill of the firm was valued at ₹ 12,000. S was to be paid 18,080 in
cash on retirement and the balance in three equal yearly instalments.
Prepare Revaluation Account, Partners' Capital Accounts, S's Loan Account and Balance Sheet on 1st
April, 2004.

Q12. Firm ABC consisted of three partners A, B and C, sharing profits and losses in the ratio of 5:3:2.
Partner A died on 20th February, 2015. The Balance Sheet as on that date was prepared:
Balance Sheet
as on 20th February, 2015
Liabilities ₹ Assets ₹
Capitals Goodwill 6,000
Capitals A/cs Machinery 35,000
A 12,000 Furniture 6,000
B 16,000 Stock 9,000
C 12,000 40,000 Debtors 15,000
Loan from A 5,000 Bank 3,000
General Reserve 7,000
Creditors 22,000
74,000 74,000
According to the Partnership Deed, on the death of a partner, the assets and liabilities are to be
revalued by a valuer. The revalued figures were:
i. Goodwill ₹ 21,000; Machinery ₹ 45,000; Debtors are subject to Provision for
Doubtful Debts at 10%; and Furniture at ₹ 7,000.
ii. Provision for taxation to be created for 1,500.
The business will be continued by B and C. The net balance due to A is transferred to A’s
executor's loan account, which will be paid off later.
Show the Revaluation Account, Partners' Capital Accounts and the new Balance Sheet of the firm.
1. Rohan, Mohan and Sohan were partners sharing profits equally. At the time of
dissolution of the partnership firm, Rohan’s loan to the firm will be :
(A) Credited to Rohan’s Capital Account.
(B) Debited to Realisation Account.
(C) Credited to Realisation Account
(D) Credited to Bank Account.
2. Name an item which is transferred to credit side of Realisation Account at the time of
dissolution of partnership firm, but does not involve cash payment.
3. How is dissolution of partnership different from dissolution of partnership firm?
4. At the time of dissolution of partnership firm, journal entry for the settlement of loan
advanced by the firm to a partner would be:

5. On the basis of the following data, how much final payment will be made to a partner on
firm’s dissolution?
Credit balance of capital account of the partner was ` 50,000. Share of loss on
realization amounted to ` 10,000. Firm’s liability taken over by him was for `8,000.
a. ` 32,000
b. ` 48,000
c. ` 40,000
d. ` 52,000
6. State the order of payment of the following, in case of dissolution of partnership firm.
i. to each partner proportionately what is due to him/her from the firm for
advances as distinguished from capital (i.e. partner’ loan);
ii. to each partner proportionately what is due to him on account of capital; and
iii. for the debts of the firm to the third parties;
7. Pass the necessary journal entries for the following transactions on the dissolution of the
partnership firm of Tony and Rony after the various assets (other than cash) and external
liabilities have been transferred to Realization Account :
(i) An unrecorded asset of 2,000 and cash 3,000 was paid for liability of
6,000 in full settlement.
(ii) 100 shares of 10 each have been taken over by partners at market value of
20 per share in their profit sharing ratio, which is 3 : 2.
(iii) Stock of 30,000 was taken over by a creditor of 40,000 at a discount of
30% in full settlement.
(iv) Expenses of realisation 4,000 were to be borne by Rony. Rony used the
firm’s cash for paying these expenses.
8. E, F and G were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On March 31,
2017, their firm was dissolved. On the date of dissolution, the Balance Sheet of the firm
was as follows:
Balance Sheet as at March 31, 2017
 F was appointed to undertake the process of dissolution for which he was allowed a
remuneration of Rs. 5,000. F agreed to bear the dissolution expenses. Assets realized as
follows:
i. The Land & Building was sold for Rs. 1,08,900.
ii. Furniture was sold at 25% of book value.
iii. Machinery was sold as scrap for Rs. 9,000.
iv. All the Debtors were realized at full value.
v. Creditors were payable on an average of 3 months from the date of dissolution.
On discharging the Creditors on the date of dissolution, they allowed a discount
of 5%.
Pass necessary Journal entries for dissolution in the books of the firm
9. The firm of R, K and S was dissolved on 31.3.2019. Pass necessary journal entries for the
following after various assets (other than cash and Bank) and the third party liabilities
had been transferred to realisation account.
(i) K agreed to pay off his wife’s loan of ₹ 6,000.
(ii) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹10,000 were given a
piece of furniture costing ₹8,000 in full and final settlement. Remaining
creditors allowed a discount of 10%.
(iii) A machine that was not recorded in the books was taken over by K at ₹ 3,000
whereas its expected value was ₹ 5,000.
(iv) The firm had a debit balance of ₹ 15,000 in the profit and loss A/c on the date
of dissolution.
10. Niyati, Kartik and Ratik were partners in a firm sharing profits and losses in the ratio of
5:3:2. The firm was dissolved on 31st March, 2019 by the order of the court. After
transfer of assets (other than cash) and external liabilities to Realization Account, the
following transactions took place :
(a) An unrecorded liability of the firm of ` 45,000 was paid by Niyati.
(b) Creditors, to whom ` 67,000 were due to be paid, accepted furniture at ` 35,000 and
the balance was paid to them in cash.
(c) Kartik had given a loan of ` 18,000 to the firm which was paid to him.
(d) Stock worth ` 85,000 was taken over by Ratik at ` 72,000.
(e) Expenses on dissolution amounted to ` 6,000 and were paid by Kartik.
(f) Loss on dissolution amounted to ` 40,000.
Pass the necessary journal entries for the above transactions in the books of the firm.
11. Pass necessary journal entries in the following cases on the dissolution of a partnership
firm of partners X, Y, A and B:
(i) Realization expenses of ` 5,000 were to borne by X, a partner. However, it was
paid by Y.
(ii) Investments costing ` 25,000 (comprising 1000 shares), had been written off
from the books completely. These shares are valued at ` 20 each and were
divided amongst the partners.
(iii) Y’s loan of `50,000 settled at ` 48,000.
(iv) Machinery (book value ` 6,00,000) was given to creditor at a discount of 20%.