Topics
Introduction to Partnership and Partnership Final Accounts
- Concept of Partnership
- Partnership Deed
- Provisions of the Indian Partnership Act, 1932
- Special Aspects of Partnership Accounts> Partner's Capital Account
- Partner's Capital Account> Fixed Capital Account
- Partner's Current Account
- Partner's Capital Account> Fluctuating Capital Account
- Examples on Partners’ Capital Accounts
- Partnership Final Accounts
- Trading Account
- Profit and Loss Account
- Balance Sheet
- Adjustments in Final Account
- Examples on Partnership Final Accounts
Introduction to Partnership
Partnership Final Accounts
- Partnership Final Accounts
- Adjustments - Income Receivable
- Interest on Capital and Current Accounts
- Adjustments - Interest on Investment and Loans
- Adjustments - Goods Destroyed by Fire Or Accident (Insured Or Uninsured)
- Adjustments - Goods Stolen
- Adjustments of Financial Statements - Goods Distributed as Free Samples and Manager's Commission
- Adjustments - Goods Withdrawn by Partners
- Adjustments - Unrecorded Purchases and Sales
- Adjustments - Capital Expenditure Included in Revenue Expenses and Vice-versa
- Adjustments - Bills Receivable Dishonoured
- Adjustments - Bills Payable Dishonoured
- Adjustments - Deferred Expenses
- Adjustments - Capital Receipts Included in Revenue Receipts and Vice-versa
- Adjustments - Commission to Working Partner Managers on the Basis of Gross Profit Net Profit, Sales, Etc
Accounts of ‘Not for Profit’ Concerns
Reconstitution of Partnership (Admission of Partner)
- Reconstitution of Partnership
- Admission of Partner
- New Profit Sharing Ratio
- Sacrificing Ratio
- Admission of Partner> Accounting Treatment of Goodwill
- Average Profit Method
- Super Profit Method
- Admission of Partner> Reserves and Accumulated Profit/Losses
- Admission of Partner> Revaluation of Assets and Liabilities
- Admission of Partner> Adjustment of Capital
- Examples on Admission of Partner
Reconstitution of Partnership
- Modes of Reconstitution of a Partnership Firm
- Admission of Partner
- New Profit Sharing Ratio
- Methods of Valuation of Goodwill
- Admission of Partner> Adjustment of Capital
- Admission of Partner> Revaluation of Assets and Liabilities
- Admission of Partner> Accounting Treatment of Goodwill
- Retirement of Partner
- Needs of Retirement Or Death of a Partner
- Retirement/Death of a Partner> Treatment of Goodwill
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Retirement/Death of a Partner> New Profit Sharing Ratio
Dissolution of Partnership Firm
Reconstitution of Partnership (Retirement of Partner)
- Retirement of Partner
- Retirement/Death of a Partner> New Profit Sharing Ratio
- Retirement/Death of a Partner> Gaining Ratio
- Retirement/Death of a Partner> Treatment of Goodwill
- Hidden Goodwill
- Retirement/Death of a Partner> Reserves and Accumulated Profits/Losses
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Retirement/Death of a Partner> Adjustment of Capitals
- Computation of Amount Due to the Retiring Partner
- Payment of Amount due to Retiring Partner
- Examples on Retirement of Partner
Reconstitution of Partnership (Death of Partner)
- Death of Partner
- Retirement/Death of a Partner> New Profit Sharing Ratio
- Retirement/Death of a Partner> Gaining Ratio
- Retirement/Death of a Partner> Revaluation of Assets and Liabilities
- Determination of Amount due to the Deceased Partner
- Settlement of Amount Payable to the Deceased Partner
- Examples on Death of Partner
Accounts of “Not for Profit” concerns
- Concept of Non-Profit Concerns
- Receipts and Payments Account
- Additional Information - Prepaid Expenses of the Current and Previous Year
- Additional Information - Subscription Received in Advance
- Additional Information - Subscription Outstanding of the Current and Previous Year
- Additional Information - Capitalisation of Entrance Fees
- Additional Information - Creation of Special Funds Out of Donations
- Additional Information - Stock of Stationery
- Additional Information - Opening Balances of Assets and Liabilities
- Income and Expenditure Account
Dissolution of Partnership Firm
- Concept of Dissolution of Partnership Firm
- Difference Between Dissolution of Partnership and Dissolution of Firm
- Accounting at the Time of Dissolution of a Firm
- Types of Firm Dissolution> Simple Dissolution
- Accounting Entries To Close The Books Of Accounts
- Transfer Stage
- Realisation/Disposal Stage
- Distribution Stage
- Treatment of Unrecorded (Undisclosed) Assets and Liabilities
- Process of Dissolution> Valuation of Goodwill
- Process of Dissolution> Realisation Account
- Examples on Simple Dissolution
- Types of Firm Dissolution> Dissolution under Insolvency Situation
- When One Partner Becomes Insolvent
- When Two Partners Become Insolvent
- When All Partners Are Insolvent
Single Entry System
- Concept of Single Entry System
- Statements of Affairs
- Additional Information - Additional Capital
- Effects of Adjustments-Drawings
- Concept of Depreciation
- Additional Information - Undervaluation of Assets and Liabilities
- Additional Information - Overvaluation of Assets and Liabilities
- Interest on Capital and Current Accounts
- Additional Information - Partners Salary
- Illustrations of Single Entry System
Bill of Exchange (Only Trade Bill)
- Necessity of Bill of Exchange (Only Trade Bill)
- Acceptance
- Concept of Bills of Exchange
- Honouring and Dishonouring of Bill of Exchange
- Accounting Treatment> Discounting the Bill of Exchange
- Accounting Treatment> Retaining the Bill till the Due Date
- Accounting Treatment> Endorsement of Bill of Exchanges
- Accounting Treatment > Bills Sent to Bank for Collection
- Insolvency of Drawee
- Retirement of Bill under Rebate
- Accounting at the Time of Dissolution of a Firm
- Examples on Bills of Exchange
Bills of Exchange
- Credit Transactions
- Concept of Bills of Exchange
- Acceptance
- Due Date
- Promissory Note
- Honouring and Dishonouring of Bill of Exchange
- Classification of Bills for Accounting
- Accounting Treatment> Retaining the Bill till the Due Date
- Accounting Treatment> Discounting the Bill of Exchange
- Accounting Treatment> Endorsement of Bill of Exchanges
- Accounting Treatment > Bills Sent to Bank for Collection
- Renewal Bill of Exchange
- Retirement of Bill under Rebate
- Insolvency of Drawee
- Examples on Bills of Exchange
Company Accounts - Issue of Shares
- Joint Stock Company
- Concept of Shares
- Kinds of Shares> Equity Shares
- Kinds of Shares> Preference Shares
- Shareholder's Fund> Share Capital of a Company
- Treatment of Share Capital in Balance Sheet
- Methods of Issue of Share Capital
- Terms of Issue of Shares> Issue of Shares at Par
- Terms of Issue of Shares> Issue of Shares at Premium
- Terms of Issue of Shares> Issue Shares at Discount
- Over Subscription of Shares
- Pro-rata Allotment
- Under Subscription of Shares
- Calls-In-Arrears
- Calls-In-Advance
- Issue of Shares for Consideration other than Cash
- Forfeiture of Shares
- When Shares Were Originally Issued at a Premium
- When Shares Were Originally Issued at Discount
- Reissue of Forfeited Shares
Company Accounts
- Concept of Shares
- Shareholder's Fund> Share Capital of a Company
- Private Placement of Shares
- Terms of Issue of Shares> Issue of Shares at Par
- Under Subscription of Shares
- Over Subscription of Shares
- Types of Share Issue
- Forfeiture of Shares
- Concept of Debentures
- Terms of Issue of Debentures> Issue of Debentures at Par
- Issue of Debentures for Consideration Other than Cash
- Interest on Debentures
Analysis of Financial Statements
- Concept of Financial Statements
- Concept of Financial Statement Analysis
- Formats of Financial Statement Analysis
- Tools of Analysis of Financial Statements
- Comparative Financial Statement
- Comparative Balance Sheet
- Comparative Income Statement
- Common-Size Statement
- Common Size Balance Sheet
- Common-Size Income Statement
- Concept of Cash Flow Statement
- Preparation of Cash Flow Statement
- Concept of Ratio Analysis
- Current Ratios/Working Capital Ratios
- Quick Ratio/Acid Test Ratio/Liquid Ratio
- Gross Profit Ratio
- Net Profit Ratio
- Operating Profit Ratio
- Operating Ratio
- Return on Investment
- Return on Capital Employed
Analysis of Financial Statements
- Comparative Financial Statement
- Common-Size Statement
- Concept of Cash Flow Statement
- Quick Ratio/Acid Test Ratio/Liquid Ratio
- Classification of Ratios> Income Statement Ratio
- Classification of Ratios> Combined/Mixed Ratio
- ROCE
Computer In Accounting
- Introduction
- Modes of Dissolution of Firm
Maharashtra State Board: Class 12
Definition: Dissolution of Partnership Firm
- Indian Partnership Act 1932, Sec. 39, provides that, "The dissolution of the partnership between all the partners of a firm is called the dissolution of a firm."
- "The act of process of ending an official organization or legal agreement."
- "The dissolution of partnership firm indicates the discontinuance function as a firm."
CBSE: Class 12
Maharashtra State Board: Class 12
CISCE: Class 12
Maharashtra State Board: Class 12
CISCE: Class 12
Key Points: Dissolution of Partnership Firm
- Dissolution of a partnership firm means a change in the agreement; the business may continue. Dissolution of a firm means complete closure of business (Sec. 39).
- After the firm's dissolution, assets are sold, liabilities are paid, and the remaining balance is shared among partners.
- Modes of dissolution: Without Court Order and By Court Order.
- Without Court: Occurs by mutual agreement, partner insolvency, unlawful business, expiry of term, completion of venture, or notice if the partnership is at will.
- By Court: Happens if a partner is of unsound mind, permanently disabled, guilty of misconduct, breaches the agreement, the firm runs at a loss, or if the court finds it just and fair.
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Related QuestionsVIEW ALL [127]
Pannalal, Babulal and Hiralal were partners sharing profits and losses in the proportion of 2:2:1, following is their Balance Sheet as on 31st March, 2008.
Balance Sheet as on 31st March, 2008
| Liabilities | Amount (Rs) | Assets | Amount (Rs) | |
| Capital Accounts: | Machinery | 25000 | ||
| Pannalal | 30000 | Stock | 10000 | |
| Babulal | 10000 | Debtors | 27500 | 26000 |
| Hiralal | 10000 | Less : R.D.D | 1500 | |
| General Reserve | 3000 |
Investment |
12000 | |
| Creditors | 20000 | Profit and Loss A/c | 9000 | |
| Pannalal’s Loan A/c | 4000 | Bank | 2000 | |
| Bills payable | 7000 | |||
| 84000 | 84000 | |||
On the above date the partners decided to dissolve the firm:
1) Assets were realised: Machinery Rs 22,500, Stock Rs 9,000, Investment Rs 10,500, Debtors Rs 22,500.
2) Dissolution expenses were Rs 1,500.
3) Goodwill of the firm realised Rs 12,000
Pass the necessary Journal entries in the books of the firm.
Amul and Sumul were partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as on 31st March, 2023 was as follows:
| Balance Sheet as on 31st March, 2023 | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital Accounts : | Building | 10,500 | |
| Amul | 15,000 | Plant | 13,500 |
| Sumul | 9,000 | Debtors | 21,000 |
| Current Accounts: | Stock | 7,500 | |
| Amul | 4,500 | Bank | 9,000 |
| Sumul | 3,000 | ||
| Creditors | 26,100 | ||
| Bills Payable | 3,900 | ||
| 61,500 | 61,500 | ||
The firm was dissolved on the above date and the assets realised as under:
(1) Plant ₹ 12,000, Building ₹ 9,000, Stock ₹ 6,000, and Debtors ₹ 18,000.
(2) Amul agreed to pay off the Bills Payable.
(3) Creditors were paid in full.
(4) Dissolution expenses were ₹ 2,100.
Prepare: Realisation A/c, Partners' Current A/cs, Partners' Capital A/cs and Bank A/c.
Sushil and Sumit were in partnership sharing profits and losses in the proportion of 3/5 and 2/5 respectively. On 31st March, 2005 they decide to dissolve the firm when their Balance Sheet was as under:
Balance Sheet as on 31st March, 2005
| Liabilities | Amount (Rs) | Assets | Amount (Rs) |
|
Sushil’s Capital |
20,000 | Plant and Machinery | 15,000 |
| Sumit's Capital | 18,000 | Stock | 15,000 |
| General Reserve | 5,000 |
Sundry Debtors |
22,000 |
| Sumit’s Loan A/c | 2,000 | Bank |
3,000 |
| Sundry Creditors | 10,000 | ||
| 55,000 | 55,000 |
The Assets realised as follows: Stock Rs 14,000, Plant and Machinery Rs 12,000 and Debtors Rs 20,000. The Sundry Creditors were paid Rs 9,000 in full settlement.
Prepare: Realisation Account, Partners Capital Accounts and Bank Account.
Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under.
| Balance Sheets as on 31st March 2018. | |||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | 28,800 | Building | 1,02,000 |
| Bills Payable | 21,600 | Machinery | 73,000 |
| Capital A/c’s | Motor Car | 1,67,600 | |
| Leela | 2,27,160 | Goodwill | 45,600 |
| Manda | 1,44,000 | Investment | 62,400 |
| Kunda | 1,08,000 | Debtors | 30,600 |
| Stock | 45,000 | ||
| Bank | 3,360 | ||
| 5,29,560 | 5,29,560 | ||
Leela agreed to take over the Building at ₹ 1,23,600. Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable. Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively. Investments were taken by Kunda at an agreed value of ₹ 55,440. Realisation expenses amounted to ₹ 6,800.
Pass necessary entries in the books of ‘Janki Stores.’
