(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.

Realisation AccountDr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Sundry Assets: Bank A/c: Building 18300 40100 Building 10900 25900 Machinery 12700 Machine 8200 Debtors 9100 Debtors 6800 Bank A/c (Realisation Expenses) 1300 Loss transferred to: Shiv’s Capital A/c 5167 15500 Sadashiv’s Capital A/c 5167 Sadanand’s Capital A/c 5167 41400 41400 Partners’ Capital AccountsDr. Cr. Particulars Shiv Sadashiv Sadanand Particulars Shiv Sadashiv Sadanand Balance b/d 2000 Balance b/d 6000 4000 Realisation A/c (Loss) 5167 5167 5166 Bank A/c 1100 900 Deficiency A/c 1933 Deficiency A/c 267 7166 7100 5167 7166 7100 5167 7166 Bank AccountDr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Balance b/d 7900 Realisation A/c (Realisation Expenses) 1300 Realisation A/c (Assets) 25900 Sundry Creditors 25875 Capital A/cs Parvati’s Loan A/c 8625 Shiv 1100 2000 Sadashiv 900 35800 35800 Sundry Creditors AccountDr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Bank A/c 25875 Balance b/d 30000 Deficiency A/c 4125 30000 30000 Parvati’s Loan AccountDr. Cr Particulars Amount (Rs) Particulars Amount (Rs) Bank A/c 8,625 Balance b/d 10,000 Deficiency A/c 1,375 10000 10000 Deficiency AccountDr. Cr. Particulars Amount (Rs) Particulars Amount (Rs) Sadashiv’s Capital A/c 267 Shiv’s Capital A/c 1933 Sadanand’s Capital A/c 7166 Sundry Creditors A/c 4125 Parvati’s Loan A/c 1375 7433 7433 Working Notes: Amount Left for payment = 35800-1300 = 34500 Amount Paid to Sundry Creditors and Parvati's Loan Acount in the ratio 3 : 1 (i.e. 30000 : 10000) Therefore, amount paid to sundry Creditors = `34500 xx 3/4 = 25875` Amount Paid towards Parvati's Loan A/c =`34500 xx 1/4 = 8625`

(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:

Question

(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.

Ledger

Solution

Realisation Account
Dr. Cr.

Particulars		Amount (Rs)	Particulars		Amount (Rs)
Sundry Assets:			Bank A/c:
Building	18300	40100	Building	10900	25900
Machinery	12700		Machine	8200
Debtors	9100		Debtors	6800
Bank A/c (Realisation Expenses)		1300	Loss transferred to:
			Shiv’s Capital A/c	5167	15500
			Sadashiv’s Capital A/c	5167
			Sadanand’s Capital A/c	5167
		41400			41400

Partners’ Capital Accounts
Dr. Cr.

Particulars	Shiv	Sadashiv	Sadanand	Particulars	Shiv	Sadashiv	Sadanand
Balance b/d			2000	Balance b/d	6000	4000
Realisation A/c (Loss)	5167	5167	5166	Bank A/c	1100	900
Deficiency A/c	1933			Deficiency A/c		267	7166
	7100	5167	7166		7100	5167	7166

Bank Account
Dr. Cr.

Particulars		Amount (Rs)	Particulars	Amount (Rs)
Balance b/d		7900	Realisation A/c (Realisation Expenses)	1300
Realisation A/c (Assets)		25900	Sundry Creditors	25875
Capital A/cs			Parvati’s Loan A/c	8625
Shiv	1100	2000
Sadashiv	900	2000
		35800		35800

Sundry Creditors Account
Dr. Cr.

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c	25875	Balance b/d	30000
Deficiency A/c	4125
	30000		30000

Parvati’s Loan Account
Dr. Cr

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Bank A/c	8,625	Balance b/d	10,000
Deficiency A/c	1,375
	10000		10000

Deficiency Account
Dr. Cr.

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Sadashiv’s Capital A/c	267	Shiv’s Capital A/c	1933
Sadanand’s Capital A/c	7166	Sundry Creditors A/c	4125
		Parvati’s Loan A/c	1375
	7433		7433

Working Notes:

Amount Left for payment = 35800-1300 = 34500

Amount Paid to Sundry Creditors and Parvati's Loan Acount in the ratio 3 : 1 (i.e. 30000 : 10000)

Therefore, amount paid to sundry Creditors = `34500 xx 3/4 = 25875`

Amount Paid towards Parvati's Loan A/c =`34500 xx 1/4 = 8625`

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Concept of Dissolution of Partnership Firm

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RELATED QUESTIONS

Mr. Aaba and Mr. Baba are equal partners whose Balance Sheet as on 31 st March, 2012 was as under:

Balance Sheet as on

31st March, 2012

Liabilities	Amount(Rs.)	Assets	Amount(Rs.)
Sundry Creditors	16000	Cash in hand	500
Capital A/c Aaba Baba	2000 2000	Stock	4500
		Debtors	4000
		Plant and machinery	5000
		Furniture	2000
		Land and Building	4000
	20000		20000

Due to weak financial position of the partners the firm is dissolved.

Aaba and Baba are not able to contribute anything from their private estate, hence they are declared insolvent.

The assets are realised as follows :-

Stock Rs. 3,000, Plant and Machinery Rs. 3,000, Furniture Rs. 1,000, Land and Building Rs. 2,000 and Debtors Rs. 1,000 only.

Realisation expenses amounted to Rs. 500.

You are required to prepare necessary Ledger Accounts to close the books of the firm.

If an asset is taken over by partner from firm his capital account will be ___________.

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.

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.

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

Assets which are not recorded in the books of account.

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 repayment of Partner’s Loan?

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

State whether the following statements is True or False.

The firm is dissolved automatically on the retirement of a partner.

State whether the following statements is True or False.

At the time of dissolution of Partnership Firm all assets should be transferred to Realisation A/c.

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.

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.

Anil and Sunil were partners sharing profits and losses in the ratio of 3: 2. Their Balance Sheet as on 31st March, 2009.

Balance Sheet as on 31^st March, 2009
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Capital Account:		Bank	30,000
Anil	50,000	Stock	25,000
Sunil	30,000	Debtors	70,000
Current Account:		Plant	45,000
Anil	15,000	Building	35,000
Sunil	10,000
Creditors	87,000
Bills payable	13,000
	2,05,000		2,05,000

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

1) Stock Rs 20,000, Debtors Rs 60,000, Plant Rs 40,000 and Building Rs 30,000.

2) Anil agreed to pay off the bills payable.

3) Creditors were paid in full.

4) Dissolution expenses were Rs 7,000.

Prepare:
(i) Realisation Account
(ii) Bank Account
(iii) Current Account and Capital Account of the partners.

A, B and C were partners sharing profits and losses in the ratio of 3:2:1. On 31^st March, 2010. Their Balance Sheet was as follows:

Balance Sheet as on 31^st 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	14000
A	20000	Join Life Policy		4000
B	16000	Plant and Machinery		43700
C	8000
Reserve Fund	12000
	85000			85000

The firm was dissolved on 31^st 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.

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

Balance Sheet as on 31^st 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	69000
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 31^st March, 2012 was as follows:
Balance Sheet as on 31^st 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	15000
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:

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

Prepare:

Realisation A/c
Bank A/c and
Partner’s Capital A/c

Distinguish between firm’s debts and partner’s private debts.

What is a Realisation Account?

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

Jay , Ajay and Vijay were partners sharing profits and losses in the proportion of 2 : 2 : 1 . Following is their balance sheet as on 31.03.2013.

Balance sheet as on 31st March 2013

Liabilities	Amount (₹)	Assets		Amount (₹)
Capital A/c		Machinery		50000
Jay	60000	Stock		20000
Ajay	20000	Debtors	55000	52000
Vijay	20000	Less : R.D.D.	(3000)	52000
General Reserve	6000	Investments		24000
Creditors	40000	Profit and loss A/c		18000
Jay's Loan A/c	8000	Bank		4000
Bills Payable	14000
	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 : (1) Realisation Account (2) Partner's Capital Account (3) Bank Account.

Realisation account is __________ on realisation of assets.

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

Debit balance of Realisation account.

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.

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

Expenses incurred on dissolution of firm.

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.

Vinod, Vijay, and Vishal are partners in a firm, sharing profit & Losses in the ratio 3:2:1. Vishal becomes insolvent and his capital deficiency is ₹ 6,000. Distribute the capital deficiency among the solvent partners.

Shailesh and Shashank were partners sharing Profits and Losses in the ratio of 3:2. Their Balance Sheet as on 31^st March 2019 was as follows.

Balance Sheets as on 31st December 2019.
Liabilities	Amount ₹	Assets	Amount ₹
Capital Account :		Building	7000
Shailesh	10,000	Plant	9,000
Shashank	6,000	Debtors	14,000
Current Account :		Stock	5,000
Shailesh	3,000	Bank	6,000
Shashank	2,000
Creditors	17,400
Bills payable	2,600
	41,000		41,000

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

1. Plant ₹ 8,000, Building ₹ 6,000, Stock ₹ 4,000 and Debtors ₹ 12,000.

2. Shailesh agreed to pay of the Bills Payable.

3. Creditors were paid in full.

4. Dissolution expenses were ₹ 1,400

Prepare Realisation A/c, Partners Current A/c, Partners Capital A/c, and Bank A/c

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 31^stMarch 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	45,000
		Stock		30,000
		Cash in hand		10,000
		Advertisement Suspense		8,000
	1,80,000			1,80,000

Additional Information:

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

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

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 ______

The dissolution of partnership may take place in the following ways?

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

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

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.

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:

At the time of dissolution, all assets are transferred to Realisation Account at their ______.

Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm' on the basis of Termination of business.

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.

Total assets of a partnership firm, which was dissolved were ₹ 30,00,000 and its total liabilities were ₹ 6,00,000. Assets were realised at 80% and liabilities were settled at 5% less. If dissolution expenses were ₹ 30,000 the profit or loss on dissolution was ______.

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.

Do you agree or disagree with the following statement:

On dissolution, cash/bank account is closed automatically.

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.

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.

Nitya, Shreya and Ishita are partners in a firm. They share profits in the ratio of 5 : 3 : 2. Their fixed capitals 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

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?

(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:

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(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:

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