Maharashtra State BoardHSC Commerce 12th Board Exam
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Pannalal, Babulal and Hiralal Were Partners Sharing Profits and Losses in the - Book Keeping and Accountancy

Journal Entry

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.

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Solution

                              Journal Entry

Date Particulars L.F Debit Amount (Rs) Credit Amount (Rs)
  Realisation A/c   Dr
  To Machinery A/c
  To Stock A/c
  To Debtors A/c
  To Investments A/c
(Being Sundry Assets transferred to Realisation A/c)
 

74,500

25,000

10,000

27,500

12,000

  Creditors A/c    Dr
Bills Payable A/c Dr
Reserve for Doubtful Debts A/c                    Dr
  To Realisation A/c
(Being Sundry Liabilities transferred to Realisation A/c )
 

20000

7000

1500

28500
  Bank A/c          Dr.
  To Realisation A/c
(Being Sundry Assets realised)
  76500 76500
  Realisation A/c  Dr
  To Bank A/c
(Being Sundry Liabilities paid off)
  28500 28500
  Realisation A/c  Dr.
  To Pannalal’s Capital A/c
   To To Babulal’s Capital A/c
   To Hiralal’s Capital A/c
(Being Profit on Realisation transferred to Partner’s Capital Account)
  2000

800

800

400

  Pannalal’s Capital A/c                   Dr.
Babulal’s Capital A/c                    Dr
Hiralal’s Capital A/c                    Dr
  To Profit and Loss A/c
(Being Profit and Loss A/c (Dr.) transferred to Partner’s Capital A/c)
 

3600

3600

1800

9000
  General Reserve A/c                    Dr
 To Pannalal’s Capital A/c
  To Babulal’s Capital A/c
  To Hiralal’s Capital A/c
(Being General Reserve transferred to Partner's Capital A/c)
  3000

1200

1200

600

  Pannalal’s Loan A/c                   Dr.
  To Bank A/c
(Being Pannalal’s Loan has been paid)
  4000 4000
  Pannalal’s Capital A/c                   Dr
Babulal’s Capital A/c                  Dr
Hiralal’s Capital A/c                 Dr
  To Bank A/c
(Being Amount paid to partners on account of final settlement)
 

28400

8400

9200

46000
Concept: Dissolution of Partnership Firm
  Is there an error in this question or solution?
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 6 Dissolution of Partnership Firm
Practical Problems | Q 6 | Page 185
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