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Ganesh and Kartik are partners sharing Profits and Losses equally. They decided to dissolve the firm on 31st March 2018. Their Balance Sheets

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प्रश्न

Ganesh and Kartik are partners sharing Profits and Losses equally. They decided to dissolve the firm on 31st March 2018. Their Balance Sheets was as under :

Balance Sheets as on 31st March 2018.
Liabilities Amount ₹ Assets Amount ₹
Creditors 18,400 Building 88,000
Bills Payable 5,600 Furniture 12,000
Reserve Fund 20,000 Debtors 32,000
Capital A/c :   Stock 24,000
Ganesh 40,000 Bills Receivable 4,000
Kartik 80,000 Cash 4,000
  1,64,000   1,64,000

Assets were realised as under :

Building ₹82,000, Debtors ₹ 22,000, Stock ₹ 20,000. Bills Receivable ₹ 3,200 and Ganesh agreed to take over Furniture for ₹10,000. Realisation Expenses amounted to ₹ 2,000.

Show Realisation A/c, Partners’ Capital A/c and Cash A/c.

खातेवही
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उत्तर

Dr In the books of Ganesh and Kartik Realisation Account Cr
Particulars Amount (₹) Amount (₹) Particulars Amount (₹) Amount (₹)
To Sundry Assets A/c     By Sundry Liabilities A/c    
Building 88,000 1,60,000 Creditors 18,400 24,000
Furniture 12,000 Bills Payable 5,600
Debtors 32,000 By cash A/c    
Stock 24,000 Building 82,000 1,27,200
Bills receivable 4,000 Debtors 22,000
To Cash A/c     Stock 20,000
Creditors 18,400 26,000 Bills receivable 3,200
Bills Payable 5,600 By Ganesh’s Capital A/c    
realisation Expense 2,000 Furniture   10,000
     

By Partners’ Capital A/c

(Loss on realisation transferred)

   
      Ganesh 12,400 24,800
      Kartik 12,400
    1,86,000     1,86,000

 

Dr Partners’ Capital Accounts Cr
Particulars Ganesh (₹) Kartik (₹) Particulars Ganesh (₹) Kartik (₹)

To realisation A/c
(Furniture)

10,000   By Balance b/d 40,000 80,000

To realisation A/c
(Loss on realisation)

12,400 12,400 By reserve Fund A/c 10,000 10,000
To Cash A/c 27,600 77,600      
  50,000 90,000   50,000 90,000

 

Dr Cash Account Cr
Particulars Amount (₹) Particulars Amount (₹)
To Balance b/d 4,000 By realisation A/c (Liabilities) 26,000
To realisation A/c (Assets) 1,27,200 By Ganesh’s Capital A/c 27,600
    By Kartik’s Capital A/c 77,600
  1,31,200   1,31,200

Working Notes :

(1) Amount paid to Ganesh and Kartik are  ₹ 27,600 and ₹ 77,600 respectively.

(2) Loss on realisation and reserve fund amounts are equally distributed.

(3) Furniture is taken over by Ganesh so his Capital A/c is debited.

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पाठ 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
पाठ 6 Dissolution of Partnership Firm
Exercise 6.2 (Practical problems) | Q 1. | पृष्ठ २४४

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संबंधित प्रश्‍न

A, B, and C were partners sharing profits and losses in the proportion of 2 : 2 : 1. Following is their balance sheet as on 31st March, 2013.
 
Balance sheet as on 31st March, 2013
Liabilities
Amount
(Rs. )
Assets
Amount
(Rs.)
Amount
(Rs.)
Capital Account
 
Machinery
 
25,000
A
30,000
Stock
 
10,000
B
10,000
Debtors
 27,500
 
C
10,000
Less: R.D.D.
1,500
26,000
General Reserve
3,000
Investment
 
12,000
Creditors
20,000
Profit and Loss A/c
 
9,000
A’s Loan Account
4,000
Bank
 
2,000
Bills Payable
7,000
     
 
84,000
   
84,000

On the above date, the partners decide to dissolve the firm.(1)  Assets were realised as -
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 int he books of the firm.


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


Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm on the basis of 'Economic Relationship'.


L and M were partners in a firm sharing profits in the ratio of 2:3. 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.1,40,000 accepted building valued at Rs.1, 80,000 and paid to the firm Rs.40,000.

(b) A second creditor for Rs.30,000 accepted machinery valued at Rs.28,000 in full settlement of his claim.

(c) A third creditor amounting to Rs.70,000 accepted Rs.30,000 in cash and investments of the book value of Rs.45,000 in full settlement of his claim.

(d) Loss on dissolution was Rs.4,000.

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


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.


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.


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


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.


On dissolution, the cash or bank account is closed automatically.

If any unrecorded liability is paid on dissolution of the firm ___________ is debited.


Aniket Ltd issued 40,000 equity shares of ` 100 each payable as follows :

On application Rs  20
On allotment Rs 30
On first call Rs 30
On second call Rs 20

The company received applications for 50,000 equity shares. Allotment of shares was made on pro-rata basis. Excess application money were adjusted to allotment. Share allotment and calls were made and also received, except Mr. Sanish who was holding 1,000 shares failed to pay both the calls. His shares were forfeited after the second call.
Record the above transactions in the books of Aniket Ltd


Answer in one sentence only.

What is a capital deficiency?


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

Winding up of partnership business.


Answer in one sentence only.

Which accounts are not transferred to Realisation account?


Answer in one sentence only.

Who is called insolvent person?


Answer in one sentence only.

Who should bear the capital deficiency of an insolvent partner?


Answer in one Sentence only.
Why is Realisation Account opened?


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


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.

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


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.


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

        Balance Sheet as on 31st 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
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 one partner becomes insolvent)
Rahul, Rohit and Ramesh were partners in a firm sharing profit and losses in the ratio of 2:2:1 respectively.The Balance Sheet as on 31st March, 2012 was as follows:
          Balance Sheet as on 31st December, 2011

Liabilities Amount (Rs) Assets Amount (Rs)
Sundry Creditors 20000 Cash at Bank 8000
Bills payable 5000 Stock 20000
General Reserve 6000 Debtors 16000 15000
Rahul’s Loan A/c 16000 Less : R.D.D 1000
Capital Account   Plant and Machinery 30000
Rahul 25000 Furniture 6000
Rohit 10000 Ramesh’s Capital A/c 3000
  82000   82000

The firm was dissolved on the above date:

  1. The Assets realised as follows:
    Debtors Rs 9,000, Plant and Machinery Rs 26,000, Stock Rs 14,000 and Furniture Rs 3,000.
  2. The Creditors were paid Rs 18,000 in full settlement and the bills payable were paid in full.
  3. The realisation expenses amounted to Rs 3,000.
  4. Ramesh become insolvent and was able to bring in only Rs 1,800 from his private estate. 

Prepare:

  1. Realisation A/c
  2. Bank A/c and
  3. Partner’s Capital 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 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.


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


What is a Realisation 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


Manish and Co. Ltd. made an issue of 40000 equity shares of 20 each payable as follows :

Application                      ₹ 5 per share

Allotment                         ₹ 10 per share

First call                           ₹  3 per share

Second call and
final call                           ₹ 2 per share

The company received applications for 50000 share of which applications for 10000 shares were rejected and money refunded . All the shareholders paid upto second call except Sunita , the allotee of 400 shares , failed to pay the final call. the expenses of issuing amounted to ₹ 6000 .

Pass Journal entries in the books of Manish and Co . Ltd.


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.


Realisation account is __________ on realisation of assets.


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

At the time of the dissolution of partnership, all assets should 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.


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.


Seeta and Geeta are partners in the firm sharing Profits and Losses in the ratio of 4:1. They decided to dissolve the partnership on 31st March 2020 on which date their Balance Sheet stood as follows.

Balance Sheets as on 31st March 2020
Liabilities Amount (₹) Assets Amount (₹) Amount (₹)
Capital:   Furniture   14,000
Seeta 90,000 Plant   65,000
Geeta 40,000 Trademark   8,000
Sundry Creditors 35,000 Sundry Debtors 48,000 45,000
Bank Loan 15,000 Less: R.D.D 3,000
    Stock   30,000
    Cash in hand   10,000
    Advertisement Suspense   8,000
  1,80,000     1,80,000

Additional Information:

  1. Plant and Stock taken over by Seeta ₹ 78,000, and ₹ 22,000 respectively.
  2. Debtors Realised 90% of the Book Value and Trademark at ₹ 5,000. and Goodwill was realised for ₹ 7,000.
  3. Unrecorded assets estimated ₹ 4,500 was sold for ₹ 1,500.
  4. ₹ 1,000 Discount were allowed by creditors while paying their claim.
  5. The Realisation Expenses amounted to ₹ 3,500.

You are required to prepare Realisation A/c, Cash A/c, and Partners Capital A/c.


Anita and Binita are partners in a firm. Anita had taken a loan of ₹ 15,000 from the firm. How will Anita’s loan be closed in the event of dissolution of the firm?


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.


Pick the odd one out.


At the time of the firm's dissolution, the balance of General Reserve shown in the Balance Sheet is credited to ______.


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:


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.


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.

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

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.


______ 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


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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