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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. - Accountancy

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प्रश्न

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 1st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31st 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 31st 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.

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उत्तर

                            Realisation Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

To Plant  

2,20,000

By Creditors

75,000

To Investments

70,000

By Bills Payable

40,000

To Stock                                           

50,000

By Outstanding Salary

35,000

To Debtors

60,000

By Bank A/c

 

To Bank

 

Plant                                85,000

 

Creditors                            75,000

 

Stock                               33,000

 

Bills Payable                      40,000

 

Debtors                           47,000

 

Outstanding Salary            35,000

1,50,000

Investments                    66,500

2,31,500

To Bank

 

By Partner’s Capital A/cs-Loss

 

Outstanding Bill for Repair    7,500

 

Srijan                               81,030

 

Dishonoured of                      

Discounted Bill                     15,000

 

22,500

Raman                              81,030

 

To Srijan’s Capital A/c-Commission (2,31,500*.05)

11,575

Manan                             40,515

2,02,575

 

5,84,075

 

5,84,075

 

 

 

 

           

Partners' Capital Account

 
 Particulars Srijan Raman Manan Particulars Srijan Raman Manan
To Balance b/d ---------- ---------- 10,000 By Balance b/d 2,00,000 1,50,000 ---------
To Profit &Loss A/c   32,000 32,000 16,000 By Realisation  A/c-Commission 11,575    
To RealisationA/c-Loss 

81,030

81,030

40,151      
To Bank A/c

98,545

36,970 ---------- By Bank A/c ---------- ---------- 66,515
  2,11,575 1,50,000 66,515   2,11,575 1,50,000 66,515
               

                                  Bank Account

Dr.

 

Cr.

Particulars

Amount

Rs

Particulars

Amount

Rs

Balance b/d

10,000

To Realisation A/c-Recorded liabilities repaid

1,50,000

To Realisation A/c-Assets realised

2,31,500

To Realisation A/c-Unrecorded liabilities repaid

22,500

To Manan’s Capital A/c

66,515

To Srijan’s Capital A/c

98,545

 

 

To Raman’s Capital A/c

36,970

 

 

 

 

 

 

 

 

 

 

 

 

 

3,08,015

 

3,08,015

 

 

 

 

         
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2017-2018 (March) Foreign Set 2

संबंधित प्रश्न

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


R and L were partners in a firm sharing profits in the ratio of 13:7. On 4-3-2016 their firm was dissolved. After transferring assets (other than cash) and outsiders liabilities to the realization account, you are given the following information :

(a) Subh, a creditor for Rs 4,90,000 accepted building at Rs 6,50,000 and paid the balance to the firm by a cheque.

(b) Sudha, a second creditor for Rs 1, 80,000 accepted machinery of the book value of Rs 1,80,000 at Rs 1,76,000 in full settlement of his claim.

(c) Sudhir, a third creditor for Rs 2,00,000 accepted investments of Rs 1,20,000 and a bank draft of Rs 79,000 in full settlement of his claim.

(d) Loss on dissolution was Rs 30,000. Pass necessary journal entries for the above transactions in the books of the firm


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 Rs Assets Rs

Creditors

Investment Fluctuation

Fund

Capitals

Prachi

Ritika

 

 

2,00,000

30,000

30,000

40,000

Furniture

Stock

Investments

Cash

Ishita's Capital

 

37,000

5,500

15,000

9,000

18,000

 

  84,500   84,500

Expenses incurred on a dissolution of a partnership 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 1st April, 2016 Bhola extended a loan of Rs 1,00,000 to the firm. The net profit of the firm for the year ended 31st 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 31st 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.

When is Realisation Account opened?


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


State whether the following statements is True or False.

A Solvent partner having debit balance to his Capital Account does not share the deficiency of Insolvent Partner’s Capital Account.


If the number of partners in a firm falls below two, the firm stands_________.


Ganga, Yamuna and Godavari are in Partnership sharing profits and losses equally. Their Balance sheet as on 31st December, 2011 was as follows:

           Balance Sheet as on 31st December, 2011

Liabilities Amount (Rs) Assets Amount (Rs)
Capital Accounts   Currnet Accounts  
Ganga 25000 Yamuna 20000
Yamuna 10000 Godavari 4000
Godavari 5000 Premises 17200
Ganga’s Currnet A/c 3000 Machinery 10800
Sundry Creditors 4000 Debtors 9600
Bank loan 3000 Cash 6400
  50000   50000

Godavari was declared insolvent and hence the firm was dissolved as on that date. Premises was sold at Rs 14,800, Machinery realised Rs 6,400. Bad debts and discount allowed to Debtors amounted to Rs 1,600. Sundry creditors agreed to receive 80 paise in a rupee (Rs) in full satisfaction of their claim. Bank Loan was settled at 60% of book value. During the course of dissolution a liability under an action for damages was settled for Rs 1,400 against Rs 2,100 provided in the books of the firm. The expenses of realisation amounted to Rs 900. Goodwill contributed Rs 1,900 from her private Property.

Prepare necessary ledger accounts in the books of the firm.


State the difference between dissolution of partnership and dissolution of partnership firm.


Distinguish between firm’s debts and partner’s private debts.


State whether the following statement is True or False.

At the time of disolution of a partnership firm all assets should be transfered to realiasation account.


Following is the balance sheet as on 31 st march 2016 of M/s . Jay and Ajay :

Balance sheet as on 31st MArch 2016

Liabilities Amount Assets   Assets
Capital A/cs :   Cash at bank   18000
Jay 150000 Stock   75000
Ajay 150000 Furniture   90000
Reserve fund 30000 Investment   30000
Loan from Jay 3000 Machinery   90000
Bills payable 6000 Buildings   45000
Creditors 30000 Debtors 24000 21000
    Less : R.D.D 3000
369000   369000

The firm was dissolved on 31st March , 2016 and the assets realised were as under :

(1) Jay look over the investment at ₹ 27600 and Ajay took over the furniture at ₹ 84000.

(2) The assets were realised as follows : 

Stock              73500 ;

Debtors          22500 ;

Machinery      84000 ;

Building         42000  

(3) The creditors were paid off at a discount of 900 and other liabilities were paid in full.

(4) Dissolution expenses were 4200

(5) Jay and Ajay were sharing profits and losses in the ratio of 3 : 2.

Prepare :

1) Realisation Account

2) Capital Account of all partners

3) Bank Account


Partnership is completely dissolved when the partners of the firm become _________.


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

The firm must be dissolved on the retirement of a partner.


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

A solvent partner having debit balance to his Capital Account does not share the deficiency of insolvent partner Capital Account.


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.


On which of the following grounds the court may order a partnership firm to be dissolved?


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: "The firm is dissolved automatically, on the retirement all partners." 

Statement 2: A firm dissolves on the retirement of a partner.


A partnership firm is compulsorily dissolved:


Pick the odd one out: (In reference to Dissolution partnership firm)


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


Asha, Usha and Nisha are partners in the firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively. On 31st March, 2019 they decided to dissolve the firm when their Balance Sheet was as under:

Balance Sheet as on 31st March, 2019
Liabilities Amount (₹) Assets Amount (₹)
Creditors 28,800 Building 1,02,000
Bills Payable 21,600 Machinery 73,000
Capitol Accounts:   Motor Car 1,67,600
Asha 2,27,160 Goodwill 45,600
Usha 1,44,000 Investment 62,400
Nisha 1,08,000 Debtors 30,600
    Stock 45,000
    Bank 3,360
  5,29,560   5,29,560

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

  1. Asha agreed to take over the Building at ₹ 1,23,600
  2. Usha took over Goodwill Stock and Debtors at book value and agreed to pay Creditors and Bills payable.
  3. Motor car and Machinery realised at ₹ 1,51,080 and ₹ 31,680 respectively.
  4. Investment were taken by Nisha at an agreed value of ₹ 55,440.
  5. Realisation Expenses amounted to ₹ 6,800.

Prepare:

  1. Realisation Account
  2. Partners' Capital Account
  3. Bank Account

Mandar and Prasad are partners in a firm sharing profit & losses in the ratio of 3 : 2. The following is their balance sheet as on 31st March, 2019.

Liabilities Amount (₹) Assets   Amount (₹)
Capital A/c:   Building   72,000
Mandar 95,000 Plant & Machinery   60,000
Prasad 1,00,000 Furniture   10,000
Creditors 4,000 Debtors 42,000 40,000
Bills Payable 3,000 Less: RDD  2,000
    Bank   20000
  2,02,000     2,02,000

On 1st April, 2019 Shubham is admitted for 1/2 share on the following terms:

  1. He paid ₹ 1,00,000 as Capital ₹ 40,000 as his shares of goodwill by RTGS.
  2. Plant & Machinery revalued at ₹ 48,000.
  3. Building is taken over by Mandar at ₹ 100,000.
  4. Reserve for Doubtful Debts (RDD) to be increased upto ₹ 4,000.
  5. The old partners decided to retain half of the amount of goodwill in the business.
  6. The old partners decided to sacrifice equally.

Prepare Partners' Capital Account Only and show your working clearly.


Complete the table.

Debit side total of
Realisation A/c
Credit side total of
Realisation A/c
Loss on
Realisation
 ₹ 20,000 ₹ 4,000

Dino, Manu and Ramu are Partners Sharing Profits and Losses in the Ratio 2 : 2 : 1. They decided to dissolved the firm on 31st March, 2020. When their position was as under.

Balance Sheet as on 31st March, 2020
Liabilities Amount
(₹)
Assets Amount
(₹)
Capital A/c:     Building 78,000
 Dino 26,000 66,000 Computer 45,000
 Manu  22,000 Debtors 20,000 
 Ramu 18,000 Goodwill 35,000
Creditors   80,000 Bank 8,000
Bill Payable   40,000    
    1,86,000   1,86,000

The firm was dissolved on above date and the following is the result of realisation.

  1. The Assets were realised as Building ₹ 40,000, Computer ₹ 30,000, Debtors ₹ 10,000.
  2. Realisation expenses amounted to ₹ 2,000.
  3. All partners were insolvent The following amount was recovered from them Dino ₹ 2,000 and Manu ₹ 2,000.

Prepare Necessary ledger account to close the books of the firm.


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:

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

A, B and C are in partnership business. A used ₹ 2,00,000 belonging to the firm without the information to other partners and made a profit of ₹ 35,000 by using this amount. Which decision should be taken by the firm to rectify this situation?


Do you agree or disagree with the following statement:

On dissolution, cash/bank account is closed automatically.


Insolvent partner Capital A/c debit side total is ₹ 25,000 and credit side total is ₹ 10,000. Calculate deficiency.


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:


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 partnership deed provide that interest on capital will be allowed @10% p.a. The amount of interest on Ishita's capital will be:


Choose the correct order in which a partnership firm, at the time of its dissolution, will apply the amount realised from the sale of its assets, including any amount contributed by the partners, towards the payment of:

P: Partners' loan

Q: Firm's debts

R: Balance of partners' capital

S: Surplus divided amongst the partners in their profit-sharing ratio


Assertion: A revaluation account is prepared at the time of dissolution of a partnership.

Reason: A revaluation account is prepared to determine the net gain/loss on realisation of assets and settlement of liabilities.

Which one of the following is correct?


Ira (a partner in a firm) was allowed to retain the whole of the stock as her remuneration for services rendered by her in the course of dissolution of the firm. The value of stock was ₹ 10,000 which had been transferred to the Realisation Account.

Complying with the accounting principle of full disclosure, record the above transaction in the books of the partnership firm at the time of its dissolution.


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