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

Question

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

Sum

Solution

Journal of Aniket Ltd.

Date	Particulars	L.F.	Debit (Rs.)	Credit (Rs. )
(1)	Bank A/c (50000 x 2) ..... Dr.		10,00,000
	To Equity Share Application A/c			10,00,000
	[Being share application money received on 50000 shares @ Rs. 20 each]

(2)	Equity share Application A/c (50000 x 2) ..... Dr.		10,00,000
	To Equity Share Capital A/c			8,00,000
	To Equity Share Allotment A/c			2,00,000
	[Being share application money transferred to share capital A/c and the excess amount adjusted top allotment money]

(3)	Equity Share Allotment A/c (40000 x 30) ...... Dr.		12,00,000
	To Equity Share Capital A/c			12,00,000
	[Being Share allotment money due on 40,000 shares @ Rs. 30]

(4)	Bank A/c (40000 x 30) - 200000 ... Dr.		10,00,000
	To Equity Share Allotment A/c			10,00,000
	[Being share allotment money received]

(5)	Equity Share First Call A/c (40000 x 30) ... Dr.		12,00,000
	To Equity Share Capital A/c			12,00,000
	[Being share first call amount due on 40,000 shares @ Rs. 30]

(6)	Bank A/c (40000 x 30) - (1000 x 30) ... Dr.		11,70,000
	To Equity Share First Call A/c			11,70,000
	[Being share first call amount received expect Mr. Sanish's 1000 shares]

(7)	Equity Share Second Call A/c (40000 x 20) .... Dr.		8,00,000
	To Equity Share Capital A/c			8,00,000
	[Being share second call amount due on 40,000 shares @ Rs. 20]

(8)	Bank A/c ..... Dr.		7,80,000
	To Equity Share Second Call A/c			7,80,000
	[Being share second call amount received on 39,000 shares]

(9)	Equity Share Capital A/c ...... Dr.		1,00,000
	To Equity share First Call A/c			30,000
	To Equity Share Second Call A/c			20,000
	To Equity Share Forfeiture A/c			50000
	[Being unpaid 1000 share are forfeited of non - payment of first and second call]

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Concept of Dissolution of Partnership Firm

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Q 5.B Q 5.A Q 6

2017-2018 (March)

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An account opened to find out the profit or loss on sale of assets and settlement of liabilities.

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 settlement of assets and liabilities.

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 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.

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?

Answer in one sentence only.

Which account is debited on payment of dissolution expenses?

State whether the following statement is True or False.

On dissolution Bank Overdraft is transferred to 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.

Deficiency of Insolvent partner will be suffered by solvent partners in their ___________ ratio.

Select the most appropriate alternative from those given below :

Partnership is compulsorily dissolved when the partners of the firm become ____________

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

(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.

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

Balance Sheet as on 31^st 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.

Explain the process of dissolution of a partnership firm?

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	21000
	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

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.

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

Debit balance of Realisation account.

Creditors ₹ 30,000, Bills Payable ₹ 20,000 and Bank Loan ₹ 10,000. Available Bank Balance ₹ 40,000 what will be the amount that creditors will get in case of all partner's insolvency.

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

Complete the table.

1)	Debit side total of Realisaton A/c	Credit side total of Realisation A/c	Loss on Realisations
1)	₹ 20,000	?	₹ 4,000
2)	Creditors	Bills Payable	Third-Party Liabilities
2)	₹16,000	₹12,000	?
3)	Credit side total Profit ion of Realisaton A/c	Debit side total of Realisation A/c	Profit of realisation
3)	₹ 21,000	₹16,000	?
4)	Debit side total of Capital A/c	Credit side total of Capital A/c	Cash brought by partner
4)	₹ 51,000	?	₹ 17,000
5)	capital deficiency	Cash brought by Insolvent Partner	Insolvent loss
5)	?	₹ 7,000	₹ 21,000

Kalpana and Bela were partners sharing profits and losses in the ratio of 3: 2. Their Balance Sheet as on 31st March, 2019 was as follows:

Balance Sheet as on 31st March 2019
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital Accounts:		Building	14,000
Kalpana	20,000	Plant	18,000
Bela	12,000	Debtors	28,000
Current Accounts:		Stock	10,000
Kalpana	6,000	Bank	12,000
Bela	4,000
Creditors	34,800
Bills Payable	5,200
	82,000		82,000

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

(1) Plant ₹ 16,000, Building ₹ 12,000, Stock ₹ 8,000 and Debtors ₹ 24,000.

(2) Kalpana agreed to pay off the Bill Payable.

(3) Creditors were paid in full.

(4) Dissolution expenses were ₹ 2,800.

Prepare: Realisation A/c, Partner's current A/c, Partner's Capital A/c and Bank A/c.

The object of a partnership firm is ______

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 is the characteristic of a partnership firm?

On dissolution of the firm, ______ will be debited to the Realisation Account.

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

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.

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	40,000
		Bank		20000
	2,02,000			2,02,000

On 1^st 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.

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.

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.

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.

Following is the Balance sheet of Ram, Shyam and Murari as on 31st March, 2023.

Liabilities	Amount (₹)	Assets	Amount (₹)
Capital		Furniture	10,800
Ram	18,000	Debtors	72,000
Shyam	10,800	Stocks	86,400
Creditors	1,44,000	Cash	3,600
Ram's Loan	36,000	3,600	36,000
	2,08,800		2,08,800

Due to the inability to pay the creditors, the firm is dissolved, Shyam and Murari cannot pay anything. Ram can contribute only ₹ 5,400 from his private estate. Stock realised ₹ 54,000. Debtors realised ₹ 57,600 and Furniture is sold for ₹ 3,600. Realisation Expenses amounted to ₹ 10,800.
Prepare necessary Ledger account to close the books of the firm.

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	1,82,000	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.

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

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.

Lal, Bal and Pal were partners sharing profits and losses in the ratio of 2 : 2 : 1. The following is the Balance Sheet as on 31st March, 2020.

Balance sheet as on 31st March 2020
Liabilities	Amount (₹)	Assets		Amount (₹)
Capital A/c		Machinery		50,000
Lal	60,000	Investments		24,000
Bal	20,000	Debtors	55,000	52,000
Pal	20,000	Less: R.D.D.	(3,000)	52,000
General Reserve	6,000	Stock		20,000
Creditors	48,000	Profit and loss A/c		18,000
Bills Payable	14,000	Bank		4,000
	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:

Realisation Account
Partner's Capital Account
Bank Account.

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.

Mention the liability of a partnership firm which is not shown in its balance sheet but is paid off at the time of the dissolution of the firm.

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

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