Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under. Balance Sheets as on 31st March 2018. Liabilities Amount (₹) Assets Amount (₹) Creditors 28,800 Building 1,02,000 Bills Payable 21,600 Machinery 73,000 Capital A/c’s Motor Car 1,67,600 Leela 2,27,160 Goodwill 45,600 Manda 1,44,000 Investment 62,400 Kunda 1,08,000 Debtors 30,600 Stock 45,000 Bank 3,360 5,29,560 5,29,560 Leela agreed to take over the Building at ₹ 1,23,600. Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable. Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively. Investments were taken by Kunda at an agreed value of ₹ 55,440. Realisation expenses amounted to ₹ 6,800. Pass necessary entries in the books of ‘Janki Stores.’

In the books of ‘Janki Stores’ Journal Entries Date Particulars L. F. Debit (₹) Credit (₹) 1 Realisation A/c Dr. 5,26,200 To Building A/c 1,02,000 To Machinery A/c 73,000 To Motor Car A/c 1,67,600 To Goodwill A/c 45,600 To Investments A/c 62,400 To Debtors A/c 30,600 To Stock A/c 45,000 (Being sundry assets transferred to Realisation A/c) 2 Creditors A/c Dr. 28,800 Bills Payable A/c Dr. 21,600 To Realisation A/c 50,400 (Being sundry liabilities transferred to realisation A/c) 3 Bank A/c Dr. 1,82,760 To Realisation A/c 1,82,760 (Being amount received for assets sold) 4 Realisation A/c Dr. 6,800 To Bank A/c 6,800 (Being amount paid for realisation expense) 5 Leela’s Capital A/c Dr. 1,23,600 To Realisation A/c 1,23,600 (Being Building taken over by Leela) 6 Manda’s Capital A/c Dr. 1,21,200 To Realisation A/c 1,21,200 (Being Goodwill, Stock, Debtors taken over by Manda) 7 Kunda’s Capital A/c Dr. 55,440 To Realisation A/c 55,440 (Being Investments taken over by Kunda) 8 Realisation A/c Dr. 50,400 To Manda’s Capital A/c 50,400 (Being creditors and Bills payable amount paid by Manda) 9 Leela’s Capital A/c Dr. 25,000 Manda’s Capital A/c Dr. 16,667 Kunda’s Capital A/c Dr. 8,333 To Realisation A/c 50,000 ( Being loss of realisation transferred to Partners’ Capital A/c) 10 Leela’s Capital A/c Dr. 78,560 Manda’s Capital A/c Dr. 56,533 Kunda’s Capital A/c Dr. 44,227 To Bank A/c 1,79,320 ( Being final settlement made) 1346120 1346120 Working Notes : In the books of Leela, Manda and Kunda Dr. Realisation Account Cr. Particulars Amount (₹) Amount (₹) Particulars Amount (₹) Amount (₹) To Sundry Assets A/c By Sundry Liabilities A/c Building 1,02,000 Creditors 28,800 Machinery 73,000 Bills Payable 21,600 50,400 Motor car 1,67,600 By Bank A/c Goodwill 45,600 Motor Car 1,51,080 Investments 62,400 Machinery 31,680 1,82,760 Debtors 30,600 By Leela’s Capital A/c 1,23,600 Stock 45,000 5,26,200 Building To Bank A/c By Manda’s Capital A/c Realisation Expense 6,800 Goodwill 45,600 To Manda’s Capital A/c Stock 45,000 Creditors 28,800 Debtors 30,600 1,21,200 Bills Payable 21,600 50,400 By Kunda’s Capital A/c 55,440 Investments By Partners’ Capital A/c (Loss on realisation transferred) Leela 25,000 Manda 16,667 Kunda 8,333 50,000 5,83,400 5,83,400 Dr. Partner's Capital Accounts Cr. Particulars Leela(₹) Manda(₹) Kunda(₹) Particulars Leela(₹) Manda(₹) Kunda(₹) To Realisation A/c(Building) 1,23,600 - - By Balance b/d 2,27,160 1,44,000 1,08,000 To Realisation A/c (Goodwill + Stock + Debtors) - 1,21,200 - By Realisation A/c - 50,400 - To Realisation A/c (Investments) - - 55,440 To Realisation A/c(Loss on Realisation) 25,000 16,667 8,333 To Bank A/c 78,560 56,533 44,227 2,27,160 1,94,400 1,08,000 2,27,160 1,94,400 1,08,000 Dr. Bank Account Cr. Particulars Amount (₹) Particulars Amount (₹) To Balance b/d 3,360 By Realisation Expense A/c 6,800 To Realisation A/c (Assets) 1,82,760 By Leela's Capital A/c 78,560 By Manda's Capital A/c 56,533 By Kunda's Capital A/c 44,227 1,86,120 1,86,120

Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018,

Question

Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under.

Balance Sheets as on 31^st March 2018.
Liabilities	Amount (₹)	Assets	Amount (₹)
Creditors	28,800	Building	1,02,000
Bills Payable	21,600	Machinery	73,000
Capital A/c’s		Motor Car	1,67,600
Leela	2,27,160	Goodwill	45,600
Manda	1,44,000	Investment	62,400
Kunda	1,08,000	Debtors	30,600
		Stock	45,000
		Bank	3,360
	5,29,560		5,29,560

Leela agreed to take over the Building at ₹ 1,23,600. Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable. Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively. Investments were taken by Kunda at an agreed value of ₹ 55,440. Realisation expenses amounted to ₹ 6,800.

Pass necessary entries in the books of ‘Janki Stores.’

Journal Entry

Ledger

Solution

In the books of ‘Janki Stores’

Journal Entries
Date	Particulars		L. F.	Debit (₹)	Credit (₹)
1	Realisation A/c	Dr.		5,26,200
	To Building A/c				1,02,000
	To Machinery A/c				73,000
	To Motor Car A/c				1,67,600
	To Goodwill A/c				45,600
	To Investments A/c				62,400
	To Debtors A/c				30,600
	To Stock A/c				45,000
	(Being sundry assets transferred to Realisation A/c)
2	Creditors A/c	Dr.		28,800
	Bills Payable A/c	Dr.		21,600
	To Realisation A/c				50,400
	(Being sundry liabilities transferred to realisation A/c)
3	Bank A/c	Dr.		1,82,760
	To Realisation A/c				1,82,760
	(Being amount received for assets sold)
4	Realisation A/c	Dr.		6,800
	To Bank A/c				6,800
	(Being amount paid for realisation expense)
5	Leela’s Capital A/c	Dr.		1,23,600
	To Realisation A/c				1,23,600
	(Being Building taken over by Leela)
6	Manda’s Capital A/c	Dr.		1,21,200
	To Realisation A/c				1,21,200
	(Being Goodwill, Stock, Debtors taken over by Manda)
7	Kunda’s Capital A/c	Dr.		55,440
	To Realisation A/c				55,440
	(Being Investments taken over by Kunda)
8	Realisation A/c	Dr.		50,400
	To Manda’s Capital A/c				50,400
	(Being creditors and Bills payable amount paid by Manda)
9	Leela’s Capital A/c	Dr.		25,000
	Manda’s Capital A/c	Dr.		16,667
	Kunda’s Capital A/c	Dr.		8,333
	To Realisation A/c				50,000
	( Being loss of realisation transferred to Partners’ Capital A/c)
10	Leela’s Capital A/c	Dr.		78,560
	Manda’s Capital A/c	Dr.		56,533
	Kunda’s Capital A/c	Dr.		44,227
	To Bank A/c				1,79,320
	( Being final settlement made)
				1346120	1346120

Working Notes :

In the books of Leela, Manda and Kunda

Dr.	Realisation Account						Cr.
Particulars		Amount (₹)	Amount (₹)	Particulars	Amount (₹)	Amount (₹)
To Sundry Assets A/c				By Sundry Liabilities A/c
Building		1,02,000		Creditors	28,800
Machinery		73,000		Bills Payable	21,600	50,400
Motor car		1,67,600		By Bank A/c
Goodwill		45,600		Motor Car	1,51,080
Investments		62,400		Machinery	31,680	1,82,760
Debtors		30,600		By Leela’s Capital A/c		1,23,600
Stock		45,000	5,26,200	Building
To Bank A/c				By Manda’s Capital A/c
Realisation Expense			6,800	Goodwill	45,600
To Manda’s Capital A/c				Stock	45,000
Creditors		28,800		Debtors	30,600	1,21,200
Bills Payable		21,600	50,400	By Kunda’s Capital A/c		55,440
				Investments
				By Partners’ Capital A/c (Loss on realisation transferred)
				Leela	25,000
				Manda	16,667
				Kunda	8,333	50,000
			5,83,400			5,83,400

Dr.	Partner's Capital Accounts						Cr.
Particulars	Leela (₹)	Manda (₹)	Kunda (₹)	Particulars	Leela (₹)	Manda (₹)	Kunda (₹)
To Realisation A/c (Building)	1,23,600	-	-	By Balance b/d	2,27,160	1,44,000	1,08,000
To Realisation A/c (Goodwill + Stock + Debtors)	-	1,21,200	-	By Realisation A/c	-	50,400	-
To Realisation A/c (Investments)	-	-	55,440
To Realisation A/c (Loss on Realisation)	25,000	16,667	8,333
To Bank A/c	78,560	56,533	44,227
	2,27,160	1,94,400	1,08,000		2,27,160	1,94,400	1,08,000

Dr.	Bank Account		Cr.
Particulars	Amount (₹)	Particulars	Amount (₹)
To Balance b/d	3,360	By Realisation Expense A/c	6,800
To Realisation A/c (Assets)	1,82,760	By Leela's Capital A/c	78,560
		By Manda's Capital A/c	56,533
		By Kunda's Capital A/c	44,227
	1,86,120		1,86,120

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Concept of Dissolution of Partnership Firm

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Q 2.Q 1.Q 3.

Chapter 6: Dissolution of Partnership Firm - Exercise 6.2 (Practical problems) [Page 244]

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Balbharati Book-Keeping and Accountancy [English] Standard 12 Maharashtra State Board

Chapter 6 Dissolution of Partnership Firm
Exercise 6.2 (Practical problems) | Q 2. | Page 244

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RELATED QUESTIONS

Dissolution expenses are credited to ______.

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

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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.

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

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.

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.

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

Assets

Creditors

Investment Fluctuation

Fund

Capitals

Prachi

Ritika

2,00,000

30,000

40,000

Furniture

Stock

Investments

Cash

Ishita's Capital

37,000

5,500

15,000

9,000

18,000

84,500

Devendra and Ganesh were partners sharing profits and losses in the ratio of 3: 2. They dissolved the partnership firm on 31st March 2013 when their position was as follows:
The assets realised as follows:

Balance Sheet as on 31.03.2013
Liabilities	Amount Rs	Assets	Amount Rs.
Sundry Creditor	12,500	Debtors 56,250
Bank Overdraft	10,000	Less: R.D.D. 6,250	50000
Reserve Fund	15,000	Stock	112500
Capital Accounts:		Furniture	25000
Devendra 1,15,000		Motor Car	37500
Ganesh 75,000		Cash in hand	2500

	227500		227500

(1) Debtors Rs. 45,000, stock Rs. 1,00,000 and goodwill Rs. 12,500

(2) The motor car was taken over by Devendra for Rs. 35,000 and furniture by Ganesh for Rs. 30,000.

(3) The creditors were paid Rs. 11,250 in full settlement.

(4) The realisation expenses were Rs. 5,000.

Pass necessary journal entries in the books of the firm.

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

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.

What is a capital deficiency?

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	60,000
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.

Which account is debited on payment of dissolution expenses?

Write the word / term / phrase, which can substitute the following statement.
Debit balance of an insolvent Partner’s Capital Account.

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

The account which shows realisation of assets and discharge of liabilities.

State whether the following statement is True or False.

On dissolution Cash or Bank Account is closed automatically.

In case of dissolution assets and liabilities are transferred to ______ A/c.

Select the most appropriate alternative from those given below :

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

Pannalal, Babulal and Hiralal were partners sharing profits and losses in the proportion of 2:2:1, following is their Balance Sheet as on 31^st March, 2008.

Balance Sheet as on 31^st 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	26000
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.

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?

State whether the following statement is ‘True’ or ‘False’
On dissolution, cash or bank account is closed automatically.

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.

All activities of partnership firm cease on _________ of firm.

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

An account opened to find out the Profit or Loss on realisation of Assets and settlement of Liabilities.

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

Credit balance of realisation Account.

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 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.

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.

Write the word/term/phrase, which can substitute each of the following statements.

"Liability likely to arise in future on happening of certain events".

On the basis of the following data, final payment to a partner on the firm's dissolution will be: Credit balance of the capital account of the partner was ₹ 50,000. Share of loss on realisation was ₹ 10,000. The firm’s liability taken over by him was for ₹ 8,000.

The account which is prepared on dissolution of a partnership firm:

On dissolution of a firm, a liability taken over by a partner is credited to ______.

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 does not result into reconstitution of a partnership firm?

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

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.

Complete the table.

Creditors	Bills Payable	Third-Party Liabilities
₹ 16,000	₹ 12,000	?

Hema, Manisha and Limsy were in partnership firm sharing profits and losses in the ratio of 5:3:2. They decided to dissolve their partnership firm on 31^st March 2019 and their Balance sheet as on that date stood as:

Balance sheet as on 31st March,2019
Liabilities	Amount ₹	Assets	Amount ₹
Capital Account:		Machinery	1,00,000
Hema	1,50,000	Debtors	50,000
Manisha	80,000	Stock	70,000
Reserve Fund	10,000	Cash at Bank	30,000
Sundry Creditors	20,000	Limsy Capital A/c	20,000
Bills payable	10,000
	2,70,000		2,70,000

The firm was dissolved on 31^stMarch, 2019 and assets were realised as under:

Machinery realised 60% of its book value.
Out of debtors, Mr. Jagdish, our customer for ₹ 20,000 was declared insolvent and nothing could be recovered from him. Other debtors are good and recovered and realised.
Hema took stock at an agreed value of ₹ 50,000.
Creditors and Bills payable were paid at 10% discount.
Limsy became insolvent and nothing was recovered from her estate.

Prepare:

Realisation Account
Partners’ Capital Account
Bank Account

Aditya, Abhinav and Ankit were partners in a firm sharing profits in the ratio of 4: 3 : 3. On 31^st March, 2022, the firm was dissolved. Aditya was appointed to complete the dissolution process for which he was allowed a remuneration of ₹ 42,000. Aditya also agreed to bear dissolution expenses. Actual expenses on dissolution amounted to ₹ 33,000 which were paid by Aditya. Aditya’s Capital Account will be credited by:

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.

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

______ means winding-up of partnership firm.

Mita and Sita, sharing profits in, the ratio 2 : 1, decided to dissolve their partnership firm on 31^st March, 2022, on which date their Balance Sheet was as under:

Balance Sheet of Mita and Sita as on 31st March, 2022
Liabilities		(₹)	Assets		(₹)
Sundry Creditors		40,000	Land & Building		29,000
Sita's Son's Loan		2,000	Plant & Machinery		20,000
Bank Overdraft		8,000	Stock		3,000
Capital Accounts:			Debtors	26,400	26,000
Mita	20,000	30,000	Less: Provision for Doubtful Debts	400	26,000
Sita	10,000	30,000	Bank		2,000
		80,000			80,000

The partnership firm was dissolved on the date of the Balance Sheet subject to the following adjustments:

Trade creditors accepted plant and machinery at an agreed valuation of 10% less than the book value and the balance in cash in full settlement of their claims.
Debtors of ₹ 1,000 proved bad.
Sita took over the stock at a discount of 20%.
Realisation expenses of ₹ 1,100 were paid by the firm.

You are required to prepare the Realisation Account.

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.

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

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.

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.

Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018,

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Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018,

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