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प्रश्न
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.
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उत्तर
In the books of G and H Journal
| Date | Particulars | L.F. |
Dr. Rs |
Cr Rs |
|
(a)
(b)
(c)
(d)
|
Realisation A/c Dr To Bank A/c (Being Mohan a creditor of Rs 2,30,000 accepted debtors
Bank A/c Dr To Realisation A/c (Being Sohan a creditor of Rs 7,00,000 accepted land of book value of Rs 10,00,000 at Rs 15,00,000 and paid the balance by cheque)
No Entry
G’s Capital A/c Dr H’s Capital A/c Dr To Realisation A/c (Being loss on dissolution transferred to partners capital accounts) |
50,000
8,00,000
27,000 21,000
|
50,000
8,00,000
48,000
|
Note: No entry will be made when asset is taken over by the creditor
APPEARS IN
संबंधित प्रश्न
If an asset is taken over by partner from firm his capital account will be ___________.
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.
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.
Distinguish between 'Dissolution of partnership' and 'Dissolution of partnership firm' on the basis of settlement of assets and liabilities.
Pass necessary journal entries on the dissolution of a partnership firm in the following cases :
1) Expenses of dissolution Rs 500 were paid by John, a partner.
2) Joney, a partner, agreed to bear the dissolution expenses for a commission of 750. Actual dissolution expenses 650 were paid by Joney
3) Bony, partner agreed to look after the dissolution work for a remuneration of Rs 3,700. He also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 4,200 were paid by Bony from the firm’s cash.
4) Sony, a partner, was appointed to look after the dissolution work for a remuneration of Rs 10,000. Sony agreed to bear the dissolution expenses. Sony took away stock worth Rs 10,000 as his remuneration. The stock had already been transferred to realisation account.
5) Vikky, a partner, agreed to look after the dissolution work for a remuneration of Rs 12,000. Vikky also agreed to bear the dissolution expenses. Actual dissolution expenses Rs 12,500 were paid by another partner, Clive, on behalf of Vikky.
6) Dissolution expenses were Rs 5,000
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.
Ashwin, Bhavin and Pravin carried on business. They share profits an losses in the ratio of 5 : 3 : 2 respectively. Their Balance Sheet as on 31st March, 2016 was as under :
Balance Sheet as on 31st March, 2016
| Liabilities | Amount | Assets | Amount |
| Sundry creditors | 42,000 | Plant and machinery | 40,000 |
| Bhavin's loan | 10,000 | Investment | 16,000 |
| Reserve fund | 40,000 | Stock | 60,000 |
| Capital accounts : | Debtors 36,000 | ||
| Ashwin | 40,000 | Less : R.D.D 2,000 | |
| Bhavin | 20,000 | Bank | 10,000 |
| Pravin | 8,000 | ||
| 1,96,000 | 1,60,000 |
On the above date, the firm was dissolved, and the assets realised were as under :
1. Investment Rs 10,000. Stock Rs 48,000, and Debtors Rs 30,000
2. Plant and machinery were taken over by Ashwin at book value.
3. Sundry creditors and Bhavin's loan were paid in full.
4. Realisation expenses incurred Rs 2,000.
Prepare :
(1) Realisation Account
(2) Partners' Capital Account
(3) Bank Account
Akbar and Birbal were partners in a firm sharing profits and losses in the ratio of 3 : 2 respectively. Their balance sheet as on 31st march , 2013 was as follows :
Balance Sheet as on 31st March, 2013
| Liabilities | Amount | Assets | Amount | |
| Capital A/c’s: | Plant and Machinery | 40,000 | ||
| Akbar | 60,000 | Furniture | 12,000 | |
| Birbal | 40,000 | Sundry debtors | 61,000 | 60,000 |
| General reserve | 20,000 | Less: R.D.D. | 1,000 | |
| Sundry creditors | 39,700 | Stock | 28,300 | |
| Bank | 19,400 | |||
| 1,59,700 | 1,59,700 | |||
On the above date, the firm was dissolved and the assets realised were as follows :
Plant and machinery ₹ 30,000.
Sundry debtors ₹ 58,000.
Furniture was taken over by Akbar for ₹ 10,000 and stock by Birbal for 27,000.
Sundry creditors were paid ₹ 38,000 in full settlement of their claim.
Realisation expenses amounted to ₹ 2,000.
Prepare :
(1) Realisation Account
(2) Partners’ Capital Accounts
(3) Bank Account
Answer in one sentence only.
Who should bear the capital deficiency of an insolvent partner?
Write the word / term / phrase, which can substitute the following statement.
Liability likely to arise in future on happening of certain events.
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.
On dissolution Cash or Bank Account is closed automatically.
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.
State whether the following statement is True or False with reason.
Realisation Loss is not transferred to the insolvent partner’s capital account.
Select the most appropriate alternative from those given below :
Partnership is compulsorily dissolved when the partners of the firm become ____________
Select the most appropriate alternative from those given below :
Realisation Account is __________on realisation of assets.
Select the most appropriate alternative from those given below :
All activities of the partnership firm cease (stop) on ____________ of firm.
A, B and C were partners sharing profits and losses in the ratio of 3:2:1. On 31st March, 2010. Their Balance Sheet was as follows:
Balance Sheet as on 31st March, 2010
| Liabilities | Amount (Rs) | Assets | Amount (Rs) | |
| Sundry Creditors | 15400 | Cash at Bank | 3500 | |
| Bills payable | 3600 | Stock | 19800 | |
| A’s loan A/c | 10000 | Debtors | 15000 | 14000 |
| Capital Account: | Less : Provision | 1000 | ||
| A | 20000 | Join Life Policy | 4000 | |
| B | 16000 | Plant and Machinery | 43700 | |
| C | 8000 | |||
| Reserve Fund | 12000 | |||
| 85000 | 85000 | |||
The firm was dissolved on 31st March, 2010 and the assets realised as follows:
1) Join Life Policy was taken over by Mr. A at Rs 5,000.
2) Stock realised Rs 18,000, Debtors realised Rs 14,500, Plant and Machinery was sold for Rs 36,000.
3) Liabilities were paid in full. In addition one bill for Rs 700 under discount was dishonoured and had to be taken up by the firm.
4) There were no realisation expenses.
Give the Journal entries and necessary Ledger Accounts to close the books 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
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.
Realisation account is __________ on realisation of assets.
State whether the following statement is True or False with reason.
At the time of dissolution, a loan from the partner will be transferred to Realisation Account.
Insolvent Partner Capital A/c debit side total is ₹ 10,000 and the credit side total is ₹ 6,000. Calculate deficiency.
On which of the following grounds the court may order a partnership firm to be dissolved?
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".
Pick the odd one out: (In reference to Dissolution partnership firm)
At the time of dissolution, all assets are transferred to Realisation Account at their ______.
Which of the following is the characteristic of a partnership firm?
At the time of the firm's dissolution, the balance of General Reserve shown in the Balance Sheet is credited to ______.
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:
- Asha agreed to take over the Building at ₹ 1,23,600
- Usha took over Goodwill Stock and Debtors at book value and agreed to pay Creditors and Bills payable.
- Motor car and Machinery realised at ₹ 1,51,080 and ₹ 31,680 respectively.
- Investment were taken by Nisha at an agreed value of ₹ 55,440.
- Realisation Expenses amounted to ₹ 6,800.
Prepare:
- Realisation Account
- Partners' Capital Account
- Bank Account
At the time of dissolution of a firm, Creditors are ₹ 70,000; Firm’s Capital is ₹ 1,20,000; Cash Balance is ₹ 10,000. Other assets realised ₹ 1,50,000. Gain/Loss in the realisation account will be:
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.
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 ______.
Sun and Kiran are partners sharing profits and losses equally. They decided to dissolve their firm. Assets and Liabilities have been transferred to Realisation Account. Pass necessary Journal entries for the following:
- All partners are agreed that the process of realisation at the time dissolution will be accomplished by Sun for which he will be paid ₹ 10,000 along with the amount of expense which amounted to 2% of total value realised from the Assets on dissolution. Some assets were sold for Cash at a cumulative Value of ₹ 12,00,000 and the remaining were taken over by creditors at a valuation of ₹ 3,00,000.
- Deferred Advertisement Expenditure A/c appeared in the books at ₹ 28,000.
- Out of the Stock of ₹ 1,20,000; Kiran (a partner) took over 1/3 of the stock at a discount of 25% and 50% of remaining stock was took over by a Creditor of ₹ 30,000 in full settlement of his claim. Balance amount of stock realized at ₹ 25,000.
- An outstanding bill for repairs and renewal of ₹ 3,000 was settled through an unrecorded asset which was valued at ₹ 10,000. Balance being settled in Cash.
Complete the following table:
| Debit side total of Realisation A/c | Credit side total of Realisation A/c | Loss on Realisation |
| ₹ 30,000 | ? | ₹ 24,000 |
| ? | ₹ 10,000 | ₹ 40,000 |
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?
