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.’

In the books of ‘Janki Stores’ Journal Entries Date Particulars L. F. Debit (₹) Credit (₹) 1 Realisation A/c Dr. 5,26,200 To Building A/c 1,02,000 To Machinery A/c 73,000 To Motor Car A/c 1,67,600 To Goodwill A/c 45,600 To Investments A/c 62,400 To Debtors A/c 30,600 To Stock A/c 45,000 (Being sundry assets transferred to Realisation A/c) 2 Creditors A/c Dr. 28,800 Bills Payable A/c Dr. 21,600 To Realisation A/c 50,400 (Being sundry liabilities transferred to realisation A/c) 3 Bank A/c Dr. 1,82,760 To Realisation A/c 1,82,760 (Being amount received for assets sold) 4 Realisation A/c Dr. 6,800 To Bank A/c 6,800 (Being amount paid for realisation expense) 5 Leela’s Capital A/c Dr. 1,23,600 To Realisation A/c 1,23,600 (Being Building taken over by Leela) 6 Manda’s Capital A/c Dr. 1,21,200 To Realisation A/c 1,21,200 (Being Goodwill, Stock, Debtors taken over by Manda) 7 Kunda’s Capital A/c Dr. 55,440 To Realisation A/c 55,440 (Being Investments taken over by Kunda) 8 Realisation A/c Dr. 50,400 To Manda’s Capital A/c 50,400 (Being creditors and Bills payable amount paid by Manda) 9 Leela’s Capital A/c Dr. 25,000 Manda’s Capital A/c Dr. 16,667 Kunda’s Capital A/c Dr. 8,333 To Realisation A/c 50,000 ( Being loss of realisation transferred to Partners’ Capital A/c) 10 Leela’s Capital A/c Dr. 78,560 Manda’s Capital A/c Dr. 56,533 Kunda’s Capital A/c Dr. 44,227 To Bank A/c 1,79,320 ( Being final settlement made) 1346120 1346120 Working Notes : In the books of Leela, Manda and Kunda Dr. Realisation Account Cr. Particulars Amount (₹) Amount (₹) Particulars Amount (₹) Amount (₹) To Sundry Assets A/c By Sundry Liabilities A/c Building 1,02,000 Creditors 28,800 Machinery 73,000 Bills Payable 21,600 50,400 Motor car 1,67,600 By Bank A/c Goodwill 45,600 Motor Car 1,51,080 Investments 62,400 Machinery 31,680 1,82,760 Debtors 30,600 By Leela’s Capital A/c 1,23,600 Stock 45,000 5,26,200 Building To Bank A/c By Manda’s Capital A/c Realisation Expense 6,800 Goodwill 45,600 To Manda’s Capital A/c Stock 45,000 Creditors 28,800 Debtors 30,600 1,21,200 Bills Payable 21,600 50,400 By Kunda’s Capital A/c 55,440 Investments By Partners’ Capital A/c (Loss on realisation transferred) Leela 25,000 Manda 16,667 Kunda 8,333 50,000 5,83,400 5,83,400 Dr. Partner's Capital Accounts Cr. Particulars Leela(₹) Manda(₹) Kunda(₹) Particulars Leela(₹) Manda(₹) Kunda(₹) To Realisation A/c(Building) 1,23,600 - - By Balance b/d 2,27,160 1,44,000 1,08,000 To Realisation A/c (Goodwill + Stock + Debtors) - 1,21,200 - By Realisation A/c - 50,400 - To Realisation A/c (Investments) - - 55,440 To Realisation A/c(Loss on Realisation) 25,000 16,667 8,333 To Bank A/c 78,560 56,533 44,227 2,27,160 1,94,400 1,08,000 2,27,160 1,94,400 1,08,000 Dr. Bank Account Cr. Particulars Amount (₹) Particulars Amount (₹) To Balance b/d 3,360 By Realisation Expense A/c 6,800 To Realisation A/c (Assets) 1,82,760 By Leela's Capital A/c 78,560 By Manda's Capital A/c 56,533 By Kunda's Capital A/c 44,227 1,86,120 1,86,120

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,

प्रश्न

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 31^st 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.’

रोजनामा प्रविष्टि

खाता बही

उत्तर

In the books of ‘Janki Stores’

Journal Entries
Date	Particulars		L. F.	Debit (₹)	Credit (₹)
1	Realisation A/c	Dr.		5,26,200
	To Building A/c				1,02,000
	To Machinery A/c				73,000
	To Motor Car A/c				1,67,600
	To Goodwill A/c				45,600
	To Investments A/c				62,400
	To Debtors A/c				30,600
	To Stock A/c				45,000
	(Being sundry assets transferred to Realisation A/c)
2	Creditors A/c	Dr.		28,800
	Bills Payable A/c	Dr.		21,600
	To Realisation A/c				50,400
	(Being sundry liabilities transferred to realisation A/c)
3	Bank A/c	Dr.		1,82,760
	To Realisation A/c				1,82,760
	(Being amount received for assets sold)
4	Realisation A/c	Dr.		6,800
	To Bank A/c				6,800
	(Being amount paid for realisation expense)
5	Leela’s Capital A/c	Dr.		1,23,600
	To Realisation A/c				1,23,600
	(Being Building taken over by Leela)
6	Manda’s Capital A/c	Dr.		1,21,200
	To Realisation A/c				1,21,200
	(Being Goodwill, Stock, Debtors taken over by Manda)
7	Kunda’s Capital A/c	Dr.		55,440
	To Realisation A/c				55,440
	(Being Investments taken over by Kunda)
8	Realisation A/c	Dr.		50,400
	To Manda’s Capital A/c				50,400
	(Being creditors and Bills payable amount paid by Manda)
9	Leela’s Capital A/c	Dr.		25,000
	Manda’s Capital A/c	Dr.		16,667
	Kunda’s Capital A/c	Dr.		8,333
	To Realisation A/c				50,000
	( Being loss of realisation transferred to Partners’ Capital A/c)
10	Leela’s Capital A/c	Dr.		78,560
	Manda’s Capital A/c	Dr.		56,533
	Kunda’s Capital A/c	Dr.		44,227
	To Bank A/c				1,79,320
	( Being final settlement made)
				1346120	1346120

Working Notes :

In the books of Leela, Manda and Kunda

Dr.	Realisation Account						Cr.
Particulars		Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c				By Sundry Liabilities A/c
Building		1,02,000		Creditors	28,800
Machinery		73,000		Bills Payable	21,600	50,400
Motor car		1,67,600		By Bank A/c
Goodwill		45,600		Motor Car	1,51,080
Investments		62,400		Machinery	31,680	1,82,760
Debtors		30,600		By Leela’s Capital A/c		1,23,600
Stock		45,000	5,26,200	Building
To Bank A/c				By Manda’s Capital A/c
Realisation Expense			6,800	Goodwill	45,600
To Manda’s Capital A/c				Stock	45,000
Creditors		28,800		Debtors	30,600	1,21,200
Bills Payable		21,600	50,400	By Kunda’s Capital A/c		55,440
				Investments
				By Partners’ Capital A/c (Loss on realisation transferred)
				Leela	25,000
				Manda	16,667
				Kunda	8,333	50,000
			5,83,400			5,83,400

Dr.	Partner's Capital Accounts						Cr.
Particulars	Leela (₹)	Manda (₹)	Kunda (₹)	Particulars	Leela (₹)	Manda (₹)	Kunda (₹)
To Realisation A/c (Building)	1,23,600	-	-	By Balance b/d	2,27,160	1,44,000	1,08,000
To Realisation A/c (Goodwill + Stock + Debtors)	-	1,21,200	-	By Realisation A/c	-	50,400	-
To Realisation A/c (Investments)	-	-	55,440
To Realisation A/c (Loss on Realisation)	25,000	16,667	8,333
To Bank A/c	78,560	56,533	44,227
	2,27,160	1,94,400	1,08,000		2,27,160	1,94,400	1,08,000

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	3,360	By Realisation Expense A/c	6,800
To Realisation A/c (Assets)	1,82,760	By Leela's Capital A/c	78,560
		By Manda's Capital A/c	56,533
		By Kunda's Capital A/c	44,227
	1,86,120		1,86,120

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Concept of Dissolution of Partnership Firm

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Q 2.Q 1.Q 3.

अध्याय 6: Dissolution of Partnership Firm - Exercise 6.2 (Practical problems) [पृष्ठ २४४]

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बालभारती Book-Keeping and Accountancy [English] Standard 12 Maharashtra State Board

अध्याय 6 Dissolution of Partnership Firm
Exercise 6.2 (Practical problems) | Q 2. | पृष्ठ २४४

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Concept of Dissolution of Partnership Firm

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संबंधित प्रश्न

Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31 st March, 2012 was as under:

Balance Sheet as on

31st March, 2012

Liabilities	Amount(Rs.)	Assets	Amount(Rs.)
Sundry Creditors	16000	Cash in hand	500
Capital A/c Aaba Baba	2000 2000	Stock	4500
		Debtors	4000
		Plant and machinery	5000
		Furniture	2000
		Land and Building	4000
	20000		20000

Due to weak financial position of the partners the firm is dissolved.

Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.

The assets are realised as follows :-

Stock Rs. 3,000, Plant and Machinery Rs. 3,000, Furniture Rs. 1,000, Land and Building Rs. 2,000 and Debtors Rs. 1,000 only.

Realisation expenses amounted to Rs. 500.

You are required to prepare necessary Ledger Accounts to close the books of the firm.

Distinguish between 'Dissolution of partnership' and 'Dissolution of partnership firm' on the basis of court's intervention.

K and P were partners in a firm sharing profits in the ratio of 7:5. On 31-1-2016 their firm was dissolved. After transferring assets (other than cash) and outsiders liabilities to the realization account, you are given the following information:

(a) Raman, a creditor for Rs.4, 20,000 accepted building valued at Rs.8, 00,000 and paid the balance to the firm by a cheque.

(b) Rajeev, a second creditor for Rs.1, 70,000 accepted machinery valued at Rs.1, 65,000 in full settlement of his claim.

(c) Ranjan, a third creditor for Rs.90,000 accepted investments of Rs.45,000 and a bank draft of Rs.43,000 in his favour in full settlement of his claim.

(d) P we appointed to do the work of dissolution for which he was allowed Rs.2,000. Actual expenses of dissolution Rs.2,400 were paid by P.

Pass necessary journal entries for the above transactions in the books of K and P.

Lal and Pal were partners in a firm sharing profits in the ratio of 3: 7. On 1.4.2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realisation account, you are given the following information:

(a) A creditor of Rs.3,60,000 accepted machinery valued at Rs.5,00,000 and paid to the firm Rs.1,40,000.

(b) A Second creditor for Rs.50,000 accepted stock at Rs.45,000 in full settlement of his claim.

(c) A third creditor amounting to Rs.90,000 accepted Rs.45,000 in cash and investments worth Rs.43,000 in full settlement of his claim.

(d) Loss on dissolution was Rs.15,000.

Pass necessary journal entries for the above transactions in the books of firm assuming that all payments were made by cheque.

Distinguish between ‘Dissolution of partnership’ and Dissolution of partnership firm ‘on the basis of closure of Books.

Prem and Suresh were partners in a firm sharing profits in the ratio of 7: 8. On 1.4.2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realisation account, you given the following information :

(a) Raman, a creditor of Rs 4, 00,000 accepted land valued at Rs 7,00,000 and paid Rs 3,00,000 to the firm.

(b) Gopal, a second creditor for Rs 1,05,000 accepted Rs 90,000 in cash and investments of Rs 14,000 in full settlement of his account.

(c) Hari, a third creditor amounting to Rs 75,000 accepted stock of the book value of Rs 60,000 for Rs 45,000 and the balance was paid to him by cheque.

(d) Loss on dissolution was Rs 45,000.

Pass necessary journal entries for the above transactions in the books of the firm.

G and H were partners in a firm sharing profits in the ratio of 9: 7. On 1.4.2015 their firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realisation account you are given the following information :

(a) Mohan, a creditor of Rs 2,30,000 accepted debtors of Rs 2,00,000 at a discount of 10% and the balance was paid to him by cheque.

(b) Sohan, a second creditor for Rs 7,00,000 accepted land of the book value of Rs 10,00,000 at Rs 15,00,000 and paid the balance to the firm by cheque.

(c) Ram, a third creditor for Rs 80,000 took over stock of book value of Rs 40,000 at Rs 30,000 and investments of Rs 48,000 in full settlement of his claim.

(d) Loss on dissolution was Rs 48,000.

Pass necessary journal entries for the above transactions in the books of G and H.

E and F were partners in a firm sharing profits in the ratio of 7:3. On 28-2-2016 the firm was dissolved. After transferring assets (other than cash) and outsider's liabilities to realization account you are given the following information:

(a) A creditor for Rs 3, 00,000 accepted building valued Rs 3, 75,000 and paid the firm Rs 75,000.

(b) A second creditor for Rs 93,000 accepted stock valued at Rs 90,000 in full settlement of his claim.

(c) A third creditor amounting to Rs 60,000 accepted Rs 37,000 in cash and investments of the book value of Rs 40,000 in full settlement of his claim.

(d) Loss on dissolution was Rs 7,000.

Pass necessary journal entries for the above transactions in the books of the firm assuming that all payments were made by cheque.

Prachi, Ritika and Ishita were partners in a firm sharing profits and losses in the ratio of 5 : 3: 2. In spite of repeated reminders by the authorities, they kept dumping hazardous material into a nearby river. The court ordered for the dissolution of their partnership firm on 31st March 2012. Prachi was deputed to realise the assets and pay the liabilities. She was aid Rs 1,000 as the commission for her services. The financial position of the firm was as follows:

Liabilities

Assets

Creditors

Investment Fluctuation

Fund

Capitals

Prachi

Ritika

2,00,000

30,000

40,000

Furniture

Stock

Investments

Cash

Ishita's Capital

37,000

5,500

15,000

9,000

18,000

84,500

Devendra and Ganesh were partners sharing profits and losses in the ratio of 3: 2. They dissolved the partnership firm on 31st March 2013 when their position was as follows:
The assets realised as follows:

Balance Sheet as on 31.03.2013
Liabilities	Amount Rs	Assets	Amount Rs.
Sundry Creditor	12,500	Debtors 56,250
Bank Overdraft	10,000	Less: R.D.D. 6,250	50000
Reserve Fund	15,000	Stock	112500
Capital Accounts:		Furniture	25000
Devendra 1,15,000		Motor Car	37500
Ganesh 75,000		Cash in hand	2500

	227500		227500

(1) Debtors Rs. 45,000, stock Rs. 1,00,000 and goodwill Rs. 12,500

(2) The motor car was taken over by Devendra for Rs. 35,000 and furniture by Ganesh for Rs. 30,000.

(3) The creditors were paid Rs. 11,250 in full settlement.

(4) The realisation expenses were Rs. 5,000.

Pass necessary journal entries in the books of the firm.

Moli, Bhola and Raj were partners in a firm sharing profits and losses in the ratio of 3 : 3 : 4. Their partnership deed provided for the following :
(i) Interest on capital @ 5% p.a.
(ii) Interest on drawing @ 12% p.a.
(iii) Interest on partners' loan @ 6% p.a.
(iv) Moli was allowed an annual salary of Rs 4,000; Bhola was allowed a commission of 10% of net profit as shown by Profit and Loss Account and Raj was guaranteed a profit of Rs 1,50,000 after making all the adjustments as provided in the partnership agreement.
Their fixed capitals were Moli : Rs 5,00,000; Bhola : Rs 8,00,000 and Raj : Rs 4,00,000. On 1^st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31^st March, 2017 before interest on Bhola's loan was Rs 3,06,000.
Prepare Profit and Loss Appropriation Account of Moli, Bhola and Raj for the year ended 31^st March, 2017 and their Current Accounts assuming that Bhola withdrew Rs 5,000 at the end of each month, Moli withdrew Rs 10,000 at the end of each quarter and Raj withdrew Rs 40,000 at the end of each half year.

Answer in one sentence only.

Which account is debited on payment of dissolution expenses?

Write the word / term / phrase, which can substitute the following statements.
An account opened to find out the Profit or Loss on Sale of Assets and Settlement of Liabilities.

Write the word / term / phrase, which can substitute the following statements.
Credit balance in Realisation Account.

Write the word / term / phrase, which can substitute the following statement.
Conversion of assets into cash on dissolution of firm.

Write the word / term / phrase, which can substitute the following statement.
Liability likely to arise in future on happening of certain events.

State whether the following statement is True or False.

On dissolution Cash or Bank Account is closed automatically.

State whether the following statement is True or False with reason.

Dissolution takes place when the relation among the partners comes to an end.

State whether the following statement is True or False with reason.

Realisation Loss is not transferred to the insolvent partner’s capital account.

In case of dissolution assets and liabilities are transferred to ______ A/c.

X, Y and Z were carrying on business. They share profits and losses in the ratio of 5:3:2 respectively. Their Balance Sheet as on 31^st March, 2010 was as under:

Balance Sheet as on 31^st March, 2010

Liabilities	Amount (Rs)	Assets		Amount (Rs)
Sundry Creditors	21000	Plant and Machinery		20000
Y’s loan	5000	Investment		8000
Reserve fund	20000	Stock
Capital Account:		Debtors	18000	17000
X	20000	Less : R.D.D	1000	17000
Y	10000	Cash in hand		2000
Z	4000	Cash at Bank		3000
	80000			80000

On the above date the firm was dissolved and the assets realised as under:

1) Investment Rs 5,000, Stock Rs 24,000 and Debtors Rs 15,000.

2) The Plant and Machinery was taken over by Mr. ‘X’ at book value.

3) Sundry Creditors and Mr. ‘Y’ loan were paid in full.

4) Realisation expenses incurred Rs 1,000.

Prepare Realisation Account, Partner’s Capital Account and Bank Account

Mahesh, Suresh and Jayesh were partners of the firm. They decided to dissolve the firm on 31^st March, 2012. Their Balance Sheet as on that date was as under:

Balance Sheet as on 31^st March, 2012

Liabilities	Amount (Rs)	Assets		Amount (Rs)
Creditors	18000	Cash at Bank		9600
Loan	4500	Sundry Assets		51000
Capitals		Debtors	72600	69000
Mahesh	82500	Less : R.D.D.	3600	69000
Suresh	30000	Stock		23400
Jayesh	21000	Furniture		3000
	156000			156000

The firm was dissolved as follows:

1) Mahesh will accept furniture for Rs 2,000 and agreed accept the debtors of book value of Rs 60,000 at on agreed value of Rs 51,000.

2) Suresh will accept stock at an agreed value Rs 20,000, and Sundry Assets of Book value Rs 24,000 at Rs 23,500.

3) Jayesh will accept remaining Sundry Assets for Rs 25,000 He will further accept the liability of loan along with due interest at 12% p.a.

Interest for three months on this loan was outstanding and was not recorded in the books.

4) Expenses of dissolution were Rs 1,000 and outstanding expenses of Rs 1,200 were to be paid from the firm.

5) The remaining debtors were realised Rs 7,000.
Prepare:
1) Realisation A/c
2) Partner’s Capital A/c
3) Bank A/c

(When all partners become insolvent)

Shiv, Sadashiv and Sadanand are Partners in a firm sharing Profit and Losses equally whose Balance-sheet as on 31^st December, 2011 stood as follows:

Balance Sheet as on 31^st December, 2011

Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Accounts		Sadanand’s Capital A/c	2000
Shiv	6000	Buildings	18300
Sadashiv	4000	Machinery	12700
Parvati’s Loan	10000	Debtors	9100
Sundry Creditors	30000	Bank	7900
	50000		50000

Shiv, Sadashiv and Sadanand were declared bankrupt and hence the firm was dissolved as on that date:

(i) The sundry Assets realised as follows:

Building Rs 10,900, Machinery Rs 8,200, Debtors Rs 6,800.

(ii) Realisation expenses amounted to Rs 1,300.

(iii) Sadanand was unable to contribute anything-

Whereas Rs 1,100 and Rs 900 were recovered from the realisation of private estate of Shiv and Sadashiv respectively.

You are required to close the books of the firm.

State whether the following statement is ‘True’ or ‘False’
On dissolution, cash or bank account is closed automatically.

Answer the following question:
State any two situations when a partnership firm can be compulsorily dissolved.

Gaurav, Saurabh, and Vaibhav were partners in firm sharing profits and losses in the ratio of 2 : 2 : 1. They decided to dissolve the firm on 31^st March 2018. After transferring Sundry assets (other than cash in hand and cash at Bank) and third-party liabilities to realisation account, the assets were realized and liabilities were paid off as follows:

A machinery with a book value of ₹ 6,00,000 was taken over by Gaurav at 50% and stock worth ₹ 5,000 was taken over by a creditor of ₹ 9,000 in full settlement of his claim.
Land and building (book value ₹ 3,00,000) were sold for ₹ 4,00,000 through a broker who charged 2% commission.
The remaining creditors were paid ₹ 76,000 in full settlement of their claim and the remaining assets were taken over by Vaibhav for ₹ 17,000.
Bank loan of ₹ 3,00,000 was paid along with interest of ₹ 21,000.

Pass necessary journal entries for the above transactions in the books of the firm.

Realisation account is __________ on realisation of assets.

All activities of partnership firm cease on _________ of firm.

Write the word/phrase/term/ which can substitute the following statement.

Expenses incurred on dissolution of firm.

Insolvent Partner Capital A/c debit side total is ₹ 10,000 and the credit side total is ₹ 6,000. Calculate deficiency.

Insolvent partners capital A/c Debit side is ₹ 15,000 & insolvent partner brought cash ₹ 6,000. Calculate the amount of Insolvency Loss to be distributed among the solvent partners.

Realisation profit of a firm is ₹ 6,000, partners share Profit & Loss in the ratio of 3: 2: 1. Calculate the amount of Realisation Profit to be credited to Partners Capital A/c.

The dissolution of partnership may take place in the following ways?

Name the account opened to find out the Profit or Loss on Sale of Assets and Settlement of Liabilities?

Write the word/term/phrase, which can substitute each of the following statements.

"Liability likely to arise in future on happening of certain events".

Consider the following statements

Statement 1: "On dissolution Cash or Bank Account is closed automatically".

Statement 2: This is done because of the double- entry system of book-keeping.

Consider the following statements

Statement 1: "Dissolution takes place when the relation among the partner's comes to an end."

Statement 2: "This can be done either voluntarily or compulsorily."

On the basis of the following data, final payment to a partner on the firm's dissolution will be: Credit balance of the capital account of the partner was ₹ 50,000. Share of loss on realisation was ₹ 10,000. The firm’s liability taken over by him was for ₹ 8,000.

At the time of dissolution, all assets are transferred to Realisation Account at their ______.

Which of the following does not result into reconstitution of a partnership firm?

Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into partnership firm last year only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial requirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due to certain disagreements and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had transferred various assets and external liabilities to Realisation A/c. Due to her busy schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On the date of dissolution, you have observed the following transactions:

Dhwani’s Loan of ₹ 50,000 to the firm was settled by paying ₹ 42,000.
Paavni’s Loan of ₹ 40,000 was settled by giving an unrecorded asset of ₹ 45,000.
Loan to Charu of ₹ 60,000 was settled by payment to Charu’s brother loan of the same amount.
Iknoor’s Loan of ₹ 80,000 to the firm and she took over Machinery of ₹ 60,000 as part payment.

You are required to pass necessary entries for all the above-mentioned transactions.

Hints:

Dr. Dhwani’s Loan A/c by ₹ 50,000; Cr. Bank A/c by ₹ 42,000 and Realisation A/c by ₹ 8,000.
Dr. Paavni’s Loan A/c and Cr. Realisation A/c by ₹ 40,000.
Dr. Realisation A/c and Cr. Loan to Charu A/c by ₹ 60,000.
Dr. Iknoor Loan A/c by ₹ 80,000; Cr. Realisation A/c by ₹ 60,000 and Bank A/c by ₹ 20,000.

Riddhi and Siddhi are partners sharing profits and losses in the ratio of 2:1. The following is their balance sheet as on 31st March, 2019.

Balance Sheet as on 31st March, 2019
Liabilities	Amount (₹)	Assets		Amount (₹)
Capital A/c:		Building		60,000
Riddhi	80,000	Furniture		24,000
Siddhi	60,000	Machinery		20,000
Reserve Fund	16,000	Debtors	17,600	16,000
Siddhi's Loan A/c	4,000	Less: RDD	1,600	16,000
Creditors	30,000	Stock		40,000
		Investment		8,000
		Interest Receivable		2,000
		Bank		20,000
	1,90,000			1,90,000

The firm was dissolved on 31st March 2019.

The assets realised were: Machinery ₹ 22,000, Building ₹ 28,000, Stock ₹ 38,000 and Debtors ₹ 15,000.
Riddhi took over the Investment at ₹ 10,000 and Furniture at book value.
Siddhi agreed to accept ₹ 3,000 in full settlement of her Loan Account.
Dissolution expenses amounted to ₹ 4,000.
Interest receivable could not be recovered.

Prepare Realisation Account, Partners' Capital Account, Siddhi's Loan Account and Bank Account.

Complete the table.

Creditors	Bills Payable	Third-Party Liabilities
₹ 16,000	₹ 12,000	?

Complete the following table:

Debit side total of Capital A/c	Credit side total of Capital A/c	Cash brought by Partner
₹ 51,000	?	₹ 17,000

Hema, Manisha and Limsy were in partnership firm sharing profits and losses in the ratio of 5:3:2. They decided to dissolve their partnership firm on 31^st March 2019 and their Balance sheet as on that date stood as:

Balance sheet as on 31st March,2019
Liabilities	Amount ₹	Assets	Amount ₹
Capital Account:		Machinery	1,00,000
Hema	1,50,000	Debtors	50,000
Manisha	80,000	Stock	70,000
Reserve Fund	10,000	Cash at Bank	30,000
Sundry Creditors	20,000	Limsy Capital A/c	20,000
Bills payable	10,000
	2,70,000		2,70,000

The firm was dissolved on 31^stMarch, 2019 and assets were realised as under:

Machinery realised 60% of its book value.
Out of debtors, Mr. Jagdish, our customer for ₹ 20,000 was declared insolvent and nothing could be recovered from him. Other debtors are good and recovered and realised.
Hema took stock at an agreed value of ₹ 50,000.
Creditors and Bills payable were paid at 10% discount.
Limsy became insolvent and nothing was recovered from her estate.

Prepare:

Realisation Account
Partners’ Capital Account
Bank Account

Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Tina and Rina after various assets (other than cash) and external liabilities have been transferred to Realisation Account:

An unrecorded asset of ₹ 18,000 was taken over by Tina at ₹ 16,000.
Rina agreed to pay her brother's loan of ₹ 23,000.
Stock of ₹ 30,000 was taken over by a creditor of ₹ 40,000 in full settlement.
Expenses of dissolution ₹ 40,000 were paid by Rina.
Creditors were paid ₹ 18,800 in full settlement of their account of ₹ 20,000.
Tina's loan of ₹ 15,000 was paid through a cheque.

Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Tanay and Mehak after various assets (other than cash) and external liabilities have been transferred to Realisation Account:

Creditors of ₹ 60,000 accepted stock valued at ₹ 59,000 in full settlement of their claim.
Tanay agreed to pay off his wife's loan of ₹ 12,000.
The firm had a debit balance of ₹ 18,000 in the profit and loss account on the date of dissolution.
An unrecorded liability of ₹ 20,000 was paid by partner, Mehak, at a discount of 10%.
Tanay's loan of ₹ 4,000 was paid through a cheque.
Expenses on dissolution amounted to ₹ 11,000 which were paid by Mehak.

Pass necessary Journal Entries for the following transactions on the dissolution of a partnership firm of Mita and Sonu on 31^st March, 2022 after the various assets other than cash and third party liabilities have been transferred to the Realisation Account.

Creditors of ₹ 90,000 took over Land and Building of ₹ 2,00,000 in full settlement of their claim.
Sonu took over debtors amounting to ₹ 50,000 at ₹ 40,000.
Realisation expenses ₹ 1,800 were paid by Sonu.
A machine which was not recorded in the books was taken over by Mita at ₹ 11,000 while its expected market value was ₹ 15,000.
Sortu agreed to pay off his wife's loan of ₹ 20,000.
Profit on dissolution amounted at ₹ 50,000.

On the day of dissolution of the firm ‘Roop Brothers’ had partner’s capital amounting to ₹ 1,50,000 external liabilities ₹ 35,000, Cash balance ₹ 8,000 and P & L A/c (Dr.) ₹ 7,000. If Realisation expense and loss on Realisation amounted to ₹ 5,000 and ₹ 25,000 respectively, the amount realised by sale of assets is ______.

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.

Vinay, Premal and Monil were in partnership sharing profits and losses in the ratio 2 : 2 : 1. They decided to dissolve their partnership firm on 31st March, 2023 and their Balance Sheet on that date stood as:

Balance Sheet as on 31st March, 2023
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital :			Plant		2,40,000
Vinay	1,80,000	3,60,000	Debtors		90,000
Premal	1,20,000		Stock		1,50,000
Monil	60,000
Loan		24,000
Sundry Creditors		18,000
Bank Overdraft		78,000
		4,80,000			4,80,000

It was agreed that:

(1) Vinay to discharge Loan and to take Debtors at book value.

(2) Plant realised ₹ 2, 70,000.

(3) Stock realised ₹1,44,000.

( 4) Creditors were paid off at a discount of ₹ 90.

Show Realisation Account, Partner's Capital Accounts and Bank Account.

Read the following hypothetical situation and answer question on the basis of the same.

Nitya, Shreya and Ishita are partners in a firm. They share profit in the ratio of 5 : 3 : 2. Their fixed capital are ₹1,80,000; ₹1,60,000 and ₹2,00,000 respectively. For the year ending 31st March, 2022, Nitya withdrew ₹7,500 at the end of every quarter.

The average number of months for which interest on drawings will be calculated, will be:

A firm having a debtor of ₹ 30,000 from whom the amount was due on 30^th June, 2023, gets dissolved on 31st March, 2023. The debtor cleared his dues on the date of dissolution of the firm at a discount of 4% per annum.

Give the journal entry passed by the firm to realise the payment from the debtor.

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,

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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,

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