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प्रश्न
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.
विकल्प
True
False
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उत्तर
This statement is False.
In the partnership, the partner’s liability is unlimited so, a solvent partner having the debit balance to his Capital Account should share the deficiency of insolvent partner capital account.
APPEARS IN
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.
If an asset is taken over by partner from firm his capital account will be ___________.
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.
C and D were partners in a firm sharing profits in the ratio of 3:2. On 28-2-2016 the firm was dissolved. After transferring assets (other than cash) and outsiders' liabilities to realization account you are given the following information :
(a) A creditor for Rs 2 00,000 accepted building of Rs 2,80,000 at Rs 2,20,000 and paid the firm Rs 20,000.
(b) A second creditor for Rs 75,000 accepted furniture at Rs 60,000 in full settlement of his claim.
(c) A third creditor amounting to Rs 80,000 accepted Rs 20,000 in cash and investments of the book value of Rs 65,000 in full settlement of his claim.
(d) Loss on dissolution was Rs 7,500. Pass necessary journal entries for the above transactions in the books of the firm assuming that all payments were made by cheque.
Pass necessary journal entries on the dissolution of a partnership firm in the following cases :
1) Expenses of dissolution were Rs 9,000.
2) Expenses of dissolution Rs 3,400 were paid by a partner, Vishal
3) Shiv, a partner, agreed to do the work for dissolution for a commission of Rs 4,500. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 3,900 were paid from the firm's bank account.
4) Naveen, a partner, agreed to look after the dissolution work for which he was allowed a remuneration of Rs 3,000. Naveen also agreed to bear the dissolution expenses. Actual expenses on dissolution Rs 2,700 were paid by Naveen.
5) Vivek, a partner, was appointed to look after the dissolution work for a remuneration of Rs 7,000. He agreed to bear the dissolution expenses. Actual dissolution expenses Rs 6,500 were paid by Rishi, another partner, on behalf of Vivek.
6) Gaurav, a partner, was appointed to look after the work of dissolution for a commission of Rs 12,500. He agreed to bear the dissolution expenses. Gaurav took over furniture of Rs 12,500 as his commission. The furniture had already been transferred to realisation account.
Assets and liabilities are transferred to Realisation Account at their ______ value.
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.
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?
Answer in one sentence only.
In what proportion is the balance on Realisation Account transferred to Partners’ Capital / Current Accounts?
Answer in one sentence only.
Who should bear the capital deficiency of an insolvent partner?
Answer in one sentence only.
Which account is debited on repayment of Partner’s Loan?
Write the word / term / phrase, which can substitute the following statements.
Debit balance in realisation account.
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 statement.
Debit balance of an insolvent Partner’s Capital Account.
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.
Expenses incurred on dissolution of a partnership firm.
State whether the following statement is True or False.
At the time of dissolution loan from partner will be transferred to Realisation Account.
State whether the following statement is True or False with reason.
The insolvency loss at the time of dissolution of the firm is shared by the solvent partners in their profit sharing ratio.
In case of dissolution assets and liabilities are transferred to ______ A/c.
Deficiency of Insolvent partner will be suffered by solvent partners in their ___________ ratio.
If the number of partners in a firm falls below two, the firm stands_________.
Select the most appropriate alternative from those given below :
Realisation Account is __________on realisation of assets.
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 31st March, 2010 was as under:
Balance Sheet as on 31st 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 | |
| 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
(When all partners become insolvent)
Shiv, Sadashiv and Sadanand are Partners in a firm sharing Profit and Losses equally whose Balance-sheet as on 31st December, 2011 stood as follows:
Balance Sheet as on 31st 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.
Distinguish between firm’s debts and partner’s private debts.
Explain the process of dissolution of a partnership firm?
Land and Building (book value) ₹ 1,60,000 sold for ₹ 3,00,000 through a broker who charged 2% commission on the deal. Journalise the transaction, at the time of dissolution of the firm.
Ram, Laxman and Bharat were partners sharing profit and losses in the ratio of 2 : 2 : 1. Following is the Balance Sheet as on 31st March, 2016 :
Balance Sheet as on 31st March, 2016
| Liabilities | Amount (Rs.) |
Assets | Amount (Rs.) |
| Capital A/c : | Machinery | 2,00,000 | |
| Ram | 2,40,000 | Stock | 80,000 |
| Laxman | 80,000 | Debtors 2,20,000 | |
| Bharat | 80,000 | Less : R.D.D. (12,000) | 2,08,000 |
| General Reserve | 24,000 | Investment | 96,000 |
| Creditors | 1,92,000 | Profit and Loss A/c | 72,000 |
| Bills Payable | 56,000 | Bank balance | 16,000 |
| 6,72,000 | 6,72,000 |
On the above date the partners decided to dissolve the firm:
(1) Assets were realised as under -
| Machinery | Rs. 1,80,000 |
| Stock | Rs. 72,000 |
| Investments | Rs. 84,000 |
| Debtors | Rs. 1,80,000 |
(2) Dissolution expenses were Rs. 12,000.
(3) Goodwill of the firm realised 96,000
Prepare :
(1) Realisation Account
(2) Partner's Capital Account
(3) Bank Account
Jay , Ajay and Vijay were partners sharing profits and losses in the proportion of 2 : 2 : 1 . Following is their balance sheet as on 31.03.2013.
Balance sheet as on 31st March 2013
| Liabilities | Amount (₹) | Assets | Amount (₹) | |
| Capital A/c | Machinery | 50000 | ||
| Jay | 60000 | Stock | 20000 | |
| Ajay | 20000 | Debtors | 55000 | 52000 |
| Vijay | 20000 | Less : R.D.D. | (3000) | |
| General Reserve | 6000 | Investments | 24000 | |
| Creditors | 40000 | Profit and loss A/c | 18000 | |
| Jay's Loan A/c | 8000 | Bank | 4000 | |
| Bills Payable | 14000 | |||
| 168000 | 168000 | |||
On the above date the partners decided to dissolve the firm.
(1) Assets were realised as :
Machinery ₹45000 ; Stock ₹ 18000;
Investment ₹ 21000 ; Debtors ₹ 45000
(2) Dissolution expenses were ₹ 3000.
(3) Goodwill of the firm realised ₹ 24000.
Prepare : (1) Realisation Account (2) Partner's Capital Account (3) Bank Account.
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 31st 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.
Partnership is completely dissolved when the partners of the firm become _________.
Write the word/phrase/term/ which can substitute the following statement.
Expenses incurred on dissolution of firm.
State whether the following statement is True or False with reason.
The firm must be dissolved on the retirement of a partner.
Shailesh and Shashank were partners sharing Profits and Losses in the ratio of 3:2. Their Balance Sheet as on 31st March 2019 was as follows.
| Balance Sheets as on 31st December 2019. | |||
| Liabilities | Amount ₹ | Assets | Amount ₹ |
| Capital Account : | Building | 7000 | |
| Shailesh | 10,000 | Plant | 9,000 |
| Shashank | 6,000 | Debtors | 14,000 |
| Current Account : | Stock | 5,000 | |
| Shailesh | 3,000 | Bank | 6,000 |
| Shashank | 2,000 | ||
| Creditors | 17,400 | ||
| Bills payable | 2,600 | ||
| 41,000 | 41,000 | ||
The firm was dissolved on the above date and the assets realised as under.
1. Plant ₹ 8,000, Building ₹ 6,000, Stock ₹ 4,000 and Debtors ₹ 12,000.
2. Shailesh agreed to pay of the Bills Payable.
3. Creditors were paid in full.
4. Dissolution expenses were ₹ 1,400
Prepare Realisation A/c, Partners Current A/c, Partners Capital A/c, and Bank A/c
The object of a partnership firm is ______
The dissolution of partnership may take place in the following ways?
A firm is dissolved with the consent of all the partners or in accordance with a contract between the partners is known as ______
On which of the following grounds the court may order a partnership firm to be dissolved?
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 realisation amounted to ₹ 10,000. Firm's liability taken over by him was for ₹ 8,000.
On dissolution of a firm, a liability taken over by a partner is credited to ______.
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:
- He paid ₹ 1,00,000 as Capital ₹ 40,000 as his shares of goodwill by RTGS.
- Plant & Machinery revalued at ₹ 48,000.
- Building is taken over by Mandar at ₹ 100,000.
- Reserve for Doubtful Debts (RDD) to be increased upto ₹ 4,000.
- The old partners decided to retain half of the amount of goodwill in the business.
- The old partners decided to sacrifice equally.
Prepare Partners' Capital Account Only and show your working clearly.
A firm consisting of partners Mukund, Sachin and Yuvraj decided to dissolve the partnership They decided to take over certain assets and liabilities and continue the business separately. The Balance Sheet was as under.
| Balance Sheet as on 31st March, 2020 | |||||
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| Capital A/c: | Furniture | 2,000 | |||
| Mukund | 55,000 | 89,000 | Sundry Assets | 34,000 | |
| Sachin | 20,000 | Debtors | 48,400 | 46,000 | |
| Yuvraj | 14,000 | Less: RDD | 2,400 | ||
| Creditors | 12,000 | Stock | 15,600 | ||
| Loan | 3,000 | Cash | 6,400 | ||
| 1,04,000 | 1,04000 | ||||
It was agreed as under:
- Mukund is to take Furniture at ₹ 1,600 and the Debtors amounting to ₹ 40,000 at ₹ 34,400 only. He accepted the Creditors on ₹ 12,000 at that figure.
- Sachin is to take over all Stock at ₹ 14,000 and Sundry Assets worth ₹ 16,000 at ₹ 14,400 only.
- Yuvraj is to take over the remaining Sundry Assets at ₹ 16,000 and assume the responsibility for the discharge of the loan together will accrued interest on a loan of ₹ 60. which has not been recorded in accounts.
- The dissolution expenses were ₹ 540.
- The remaining debtors realised only ₹ 4,200.
- The necessary adjustments were made by partners to settle their accounts.
Prepare Realisation Account, Partners Capital Account, and Cash Account, after giving effect to the above adjustments.
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 |
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.
Do you agree or disagree with the following statement:
On dissolution, cash/bank account is closed automatically.
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.
Amul and Anand are partners in the firm sharing profits and losses in the ratio of 4 : 1. They decided to dissolve the partnership on 31st March, 2023 on which date their Balance Sheet stood as follows:
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Capital: | Furniture | 19,600 | |||
| Amul | 1,26,000 | 1,82,000 | Plant | 91,000 | |
| Anand | 56,000 | Trademark | 11,200 | ||
| Sundry Creditors | 49,000 | Sundry Debtors | 67,200 | ||
| Bank Loan | 21 ,000 | Less: R.D.D. | 4,200 | 63,000 | |
| Stock | 42,000 | ||||
| Cash in Hand | 14,000 | ||||
| Advertisement Suspense | 11,200 | ||||
| 2,52,000 | 2,52,000 | ||||
Additional Information:
(1) Plant and Stock taken over by Amul at ₹ 1,09,200 and ₹ 30,800 respectively.
(2) Debtors realised 90% of the book value and Trademark at ₹ 7,000 and Goodwill was realised for ₹ 37,800.
(3) Unrecorded assets estimated ₹ 6,300 was sold for ₹ 2,100.
( 4) ₹ 1,400 Discount were allowed by creditors while paying their claim.
(5) The Realisation expenses amounted to ₹ 4,900.
You are required to prepare Realisation A/c, Cash A/c and Partner's Capital A/cs.
______ means winding-up of partnership firm.
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:
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.
