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NCERT solutions for Class 12 Accountancy chapter 5 - Dissolution of Partnership Firm

Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts

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NCERT Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts

Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts - Shaalaa.com

Chapter 5: Dissolution of Partnership Firm

Exercise

Chapter 5: Dissolution of Partnership Firm Exercise Exercise solutions [Pages 248 - 249]

Exercise | Q 1 | Page 248

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

Exercise | Q 2.1 | Page 248

State the accounting treatment for:
Unrecorded assets

Exercise | Q 2.2 | Page 248

State the accounting treatment for :
Unrecorded liabilities

Exercise | Q 3.1 | Page 248

On dissolution, how you deal with partner’s loan if it appears on the
Assets side of the Balance Sheet

Exercise | Q 3.2 | Page 248

On dissolution, how you deal with partner’s loan if it appears on the Liabilities side of the Balance Sheet

Exercise | Q 4 | Page 249

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

Exercise | Q 5 | Page 249

State the order of settlement of accounts on dissolution.

Exercise | Q 6 | Page 249

On what account realisation account differs from revaluation account.

Chapter 5: Dissolution of Partnership Firm Exercise Exercise solutions [Page 249]

Exercise | Q 1 | Page 249

Explain the process of dissolution of a partnership firm?

Exercise | Q 2 | Page 249

What is a Realisation Account?

Exercise | Q 3 | Page 249

Reproduce the format of Realisation Account.

Exercise | Q 4 | Page 249

How deficiency of creditors is paid off?

Chapter 5: Dissolution of Partnership Firm Exercise Exercise solutions [Pages 249 - 256]

Exercise | Q 1 | Page 249

Journalise the following transactions regarding Realisation expenses:
[a] Realisation expenses amounted to Rs 2,500.
[b] Realisation expenses amounting to Rs 3,000 were paid by Ashok, one of the partners.
[c] Realisation expenses Rs 2,300 borne by Tarun, personally.
[d] Amit, a partner was appointed to realise the assets, at a cost of Rs 4,000. The actual amount of Realisation amounted to Rs 3,000.

Exercise | Q 2 | Page 249

Record necessary journal entries in the following cases:
[a] Creditors worth Rs 85,000 accepted Rs 40,000 as cash and Investment worth Rs 43,000, in full settlement of their claim.
[b] Creditors were Rs 16,000. They accepted Machinery valued at Rs 18,000 in settlement of their claim.
[c] Creditors were Rs 90,000. They accepted Buildings valued Rs 1,20,000 and paid cash to the firm Rs 30,000.

Exercise | Q 3 | Page 249

There was an old computer which was written-off in the books of Accounts in the pervious year. The same has been taken over by a partner Nitin for Rs 3,000. Journalise the transaction, supposing. That the firm has been dissolved.

Exercise | Q 4 | Page 249

What journal entries will be recorded for the following transactions on the dissolution of a firm:
[a] Payment of unrecorded liabilities of Rs 3,200.
[b] Stock worth Rs 7,500 is taken by a partner Rohit.
[c] Profit on Realisation amounting to Rs 18,000 is to be distributed between the partners Ashish and Tarun in the ratio of 5:7.
[d] An unrecorded asset realised Rs 5,500.

Exercise | Q 5 | Page 249

Give journal entries for the following transactions:
1. To record the Realisation of various assets and liabilities,
2. A Firm has a Stock of Rs 1,60,000. Aziz, a partner took over 50% of the Stock at a discount of 20%,
3. Remaining Stock was sold at a profit of 30% on cost,
4. Land and Buildging (book value Rs 1,60,000) sold for Rs 3,00,000 through a broker who charged 2%, commission on the deal,
5. Plant and Machinery (book value Rs 60,000) was handed over to a Creditor at an agreed valuation of 10% less than the book value,
6. Investment whose face value was Rs 4,000 was realised at 50%.

Exercise | Q 6 | Page 250

How will you deal with the Realisation expenses of the firm of Rashim and Bindiya in the following cases
1. Realisation expenses amounts to Rs 1,00,000,
2. Realisation expenses amounting to Rs 30,000 are paid by Rashim, a partner.
3. Realisation expenses are to be borne by Rashim for which he will be paid Rs 70,000 as remuneration for completing the dissolution process. The actual expenses incurred by Rashim were Rs 1,20,000.

Exercise | Q 7 | Page 250

The book value of assets (other than cash and bank) transferred to Realisation Account is Rs 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a Creditor, in full settlement of his claim.
You are required to record the journal entries for Realisation of assets.

Exercise | Q 8 | Page 250

Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs 3,000,
2. Ashish, an old customer whose Account for Rs 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of Rs 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize Rs 400. It was taken away by Priya at an estimated price less 25%,
5. There were 100 shares of Rs 10 each in Star Limited acquired at a cost of Rs 2,000 which had been written-off completely from the books. These shares are valued @ Rs 6 each and divided among the partners in their profit sharing ratio.

Exercise | Q 9 | Page 250

All partners wish to dissolve the firm. Yastin, a partner wants that her loan of Rs 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.

Exercise | Q 10 | Page 250

What journal entries would be recorded for the following transactions on the dissolution of a firm after various assets (other than cash) on the third party liabilities have been transferred to Reliasation Account.
1. Arti took over the Stock worth Rs 80,000 at Rs 68,000.
2. There was unrecorded Bike of Rs 40,000 which was taken over By Mr. Karim.
3. The firm paid Rs 40,000 as compensation to employees.
4. Sundry creditors amounting to Rs 36,000 were settled at a discount of 15%.
5. Loss on Realisation Rs 42,000 was to be distributed between Arti and Karim in the ratio of 3:4.

Exercise | Q 11 | Page 251

Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows:    

Balance Sheet of Rose and Lily as on March 31, 2017

Liabilities

Amount (Rs.)

Assets Amount (Rs.) Amount (Rs.)
Creditors 40,000 Cash   16,000
Lily’s loan 32,000 Debtors 80,000 76,400
Profit and Loss 50,000

Less: Provision for doubtful Debts

3600
         
Capitals:   Inventory   109,600
Lily 160,000 Bills Receivable   40,000
Rose 240,000 Buildings   280,000
         
  522,000     522,000

Rose and Lily decided to dissolve the firm on the above date. Assets (except bills receivables) realised Rs 4,84,000.  Creditors agreed to take Rs 38,000. Cost of Realisation was Rs 2,400. There was a Motor Cycle in the firm which was bought out of the firm’s money, was not shown in the books of the firm. It was now sold for Rs 10,000. There was a contingent liability in respect of outstanding electric bill of Rs 5,000, Bill Receivable taken over by Rose at Rs 33,000.

Show Realisation Account, Partners Capital Account, Loan Account and Cash Account.

Exercise | Q 12 | Page 251

ShilpaMeena and Nanda decided to dissolve their partnership on March 31,2017. Their profit sharing ratio was 3:2:1 and their Balance Sheet was as under:

Balance Sheet of ShilpaMeena and Nanda as on March 31, 2017           

Liabilities

Amount
(
Rs.)

Assets Amount (Rs.)
Capitals:   Land 81,000
Shilpa 80,000

Stock

56,760
Meena 40,000 Debtors 18,600
Bank loan 20,000 Nanda’s Capital Account 23,000
Creditors 37,000

Cash

10,840
Provision for doubtful debt 1,200    
General Reserve 12,000    
  190,200   190,200

The stock of value of Rs 41,660 are taken over by Shilpa for Rs 35,000 and she agreed to discharge bank loan. The remaining stock was sold at Rs 14,000 and debtors amounting to Rs 10,000 realised Rs 8,000. land is sold for Rs 1,10,000. The remaining debtors realised 50% at their book value. Cost of Realisation amounted to Rs 1,200. There was a typewriter not recorded in the books worth Rs 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account.

Exercise | Q 13 | Page 252

Surjit and Rahi were sharing profits (losses) in the ratio of 3:2, their Balance Sheet as on March 31, 2017 is as follows:
Balance Sheet of Surjit and Rahi as on March 31, 2017

Liabilities Amt (Rs.) Assets Amt (Rs.)
Creditors 38,000 Bank 11,500
Mrs. Surjit loan 10,000 Stock 6,000
Reserve 15,000 Debtors 19,000
Rahi’s loan 5,000 Furniture 4,000
Capital’s:   Plant 28,000
Surjit 10,000 Investment 10,000
Rahi 8,000 Profit and Loss 7,500
  86,000   86,000

The firm was dissolved on March 31, 2017 on the following terms:
1. Surjitagreed to take the investments at Rs 8,000 and to pay        Mrs. Surjit’s loan.
2.  Other assets wererealisedas follows:

 Stock Rs. 5,000
Debtors Rs. 18,500
Furniture Rs. 4,500
Plant Rs. 25,000

3. Expenses onRealisationamounted to Rs 1,600.
4. Creditors agreed to accept Rs 37,000 as a final settlement.
You are required to prepare Realisation Account, Partners’ Capital Account and Bank Account.

Exercise | Q 14 | Page 252

Rita, Geeta and Ashish were partners in a firm sharing profits/losses in the ratio of 3:2:1. On March 31, 2017 their balance sheet was as follows:

Liabilities Amt (Rs.) Amt (Rs.) Assets Amt (Rs.)
Capitals:   160,000 Cash 22,500
Rita 80,000 Debtors 52,300
Geeta 50,000 Stock 36,000

Ashish

30,000 Investments 69,000
Creditors   65,000 Plant 91,200
Bills payable   26,000    
General reserve   20,000    
    271,000   271,000

On the date of above mentioned date the firm was dissolved:
1. Rita was appointed torealisethe assets. Rita was to receive 5% commission on the rate of assets (except cash) and was to bear all expenses of Realisation,
2. Assets wererealisedas follows:

  Rs
Debtors 30,000
Stock 26,000
Plant

42,750

3. Investments wererealisedat 85% of the book value,
4. Expenses ofRealisationamounted to Rs 4,100,
5. Firm had to pay Rs 7,200 for outstanding salary not provided for earlier,
6. Contingent liability in respect of bills discounted with the bank was alsomaterialisedand paid off Rs 9,800,                        Prepare Realisation Account, Capital Accounts of Partners’ and Cash Account.

Exercise | Q 15 | Page 253

Anup and Sumit are equal partners in a firm. They decided to dissolve the partnership on December 31, 2017. When the balance sheet is as under:
    Balance Sheet of Anup and Sumit as on December 31, 2017

Liabilities Amt (Rs.)  Amt
(Rs.)
Assets Amt
(Rs.)
Sundry Creditors   27,000 Cash at bank 11,000
Reserve fund   10,000 Sundry Debtors 12,000
Loan   40,000 Plants 47,000
Capital :   120,000 Stock 42,000
Anup 60,000 Leasehold land 60,000
Sumit 60,000

Furniture

25,000
    197,000   197,000

The Assets were realised as follows:

  Rs.
Lease hold land 72,000
Furniture 22,500
Stock 40,500
Plant 48,000
Sundry Debtors             10,500

The Creditors were paid Rs 25,500 in full settlement. Expenses of Realisation amount to Rs 2,500.

Prepare Realisation Account, Bank Account, Partners Capital Accounts to close the books of the firm.

Exercise | Q 16 | Page 254

Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2017. Their balance sheet on the above date was:
Balance Sheet of Ashu and Harish as on December 31, 2017

Liabilities Amt (Rs.) Amt (Rs.) Assets Amt (Rs.)
Capitals:   162,000 Building 80,000
Ashu 108,000 Machinery 70,000
Harish 54,000 Furniture 14,000
Creditors   88,000 Stock 20,000
Bank overdraft   50,000 Investments 60,000
      Debtors 48,000
      Cash in hand 8,000
    300,000   300,000

Ashu is to take over the building at Rs 95,000 and Machinery and Furniture is take over by Harish at value of Rs 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors realised for Rs 46,000, expenses of Realisation amounted to Rs 3,000. Prepare necessary ledger Account.

Exercise | Q 17 | Page 254

Sanjay, Tarun and Vineet shared profit in the ratio of 3:2:1. On December 31,2017 their balance sheet was as follows:
Balance Sheet of Sanjay, Tarun and Vineet as on December 31, 2017

Liabilities Amt
(Rs.)
Amt
(Rs.)
Assets Amt
(Rs.)
Capitals:   270,000 Plant 90,000
Sanjay 100,000 Debtors 60,000
Tarun 100,000 Furniture 32,000
Vineet 70,000 Stock 60,000
Creditors   80,000

Investments

70,000
Bills payable   30,000 Bills receivable 36,000
      Cash in hand 32,000
    380,000   380,000

On this date the firm was dissolved. Sanjay was appointed to realise the assets. Sanjay was to receive 6% commission on the sale of assets (except cash) and was to bear all expenses of Realisation.
Sanjay realised the assets as follows: Plant Rs 72,000, Debtors Rs 54,000, Furniture Rs 18,000, Stock 90% of the book value, Investments Rs 76,000 and Bills receivable Rs 31,000. Expenses of Realisation amounted to Rs 4,500.
Prepare Realisation Account, Capital Accounts and Cash Account

Exercise | Q 18 | Page 255

The following is the Balance Sheet of Gupta and Sharma as on December 31,2017:
Balance Sheet of Gupta and Sharma as on December 31, 2017

Liabilities Amt
(Rs.)
 Amt
(Rs.)
Assets  Amt
(Rs.)
Sundry Creditors   38,000 Cash at Bank 12,500
Mrs.Gupta’s loan   20,000 Sundry Debtors 55,000
Mrs.Sharma’s loan   30,000 Stock 44,000
Reserve fund   6,000 Bills Receivable 19,000
Provision of doubtful debts   4,000 Machinery 52,000
      Investment 38,500
Capital :   150,000 Fixtures 27,000
Gupta 90,000    
Sharma 60,000    
    248,000   248,000

The firm was dissolved on December 31, 2017 and asset realised and settlements of liabilities as follows:
(a) The Realisation of the assets were as follows:

  Rs.
Sundry Debtors 52,000
Stock 42,000
Bills receivable 16,000
Machinery 49,000

(b) Investment was taken over by Gupta at agreed value of Rs 36,000 and agreed to pay of Mrs. Gupta’s loan.
(c) The Sundry Creditors were paid off less 3% discount.
(d) The Realisation expenses incurred amounted to Rs 1,200.
Journalise the entries to be made on the dissolution and prepare Realisation Account, Bank Account and Partners Capital Accounts.

Exercise | Q 19 | Page 255

Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the December 31, 2017, when the balance sheet of the firm as under:
Balance Sheet of Ashok, Babu and Chetan as on December 31, 2017

Liabilities

Amt (Rs.)

Assets

Amt (Rs.)

Sundry Creditors

20,000

Bank

7,500

Bills payable

25,500

Sundry Debtors

58,000

Babu’s loan

30,000

Stock

39,500

Capital’s:

 

 

 

1,52,000

Machinery

48,000

Ashok

70,000

Investment

42,000

Babu

55,000

Freehold Property

50,500

Chetan

27,000

 

 

 

 

 

 

Current Accounts :

 

 

 

18,000

 

Ashok

10,000

 

Babu

5,000

 

Chetan

3,000

 

 

 

2,45,500

 

2,45,500

The Machinery was taken over by Babu for Rs 45,000, Ashok took over the Investment for Rs 40,000 and Freehold property was taken over by Chetan at Rs 55,000. The remaining Assets realised as follows: Sundry Debtors Rs 56,500 and Stock Rs 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of Accounts realised Rs 9,000. Realisation expenses amounted to Rs 3,000.
Prepare Realisation Account, Partners Capital Account, Bank Account.

 

Exercise | Q 20 | Page 256

The following is the Balance sheet of Tanu and Manu, who shares profit and losses in the ratio of 5:3, On December 31,2017:
Balance Sheet of Tanu and Manu as on December 31, 2017

Liabilities Amt (Rs.)  Amt (Rs.) Assets  Amt (Rs.)

Sundry Creditors

 

62,000

Cash at Bank

16,000

Bills Payable

 

32,000

Sundry Debtors

55,000

Bank Loan

 

50,000

Stock

75,000

Reserve fund

 

16,000

Motor car

90,000

Capital:

 

 

Machinery

45,000

Tanu

1,10,000

 

Investment

70,000

Manu

90,000

2,00,000

Fixtures

9,000

 

 

3,60,000

 

3,60,000

On the above date the firm is dissolved and the following agreement was made: Tanu agree to pay the bank loan and took away the sundry debtors. Sundry creditors accepts stock and paid Rs 10,000 to the firm. Machinery is taken over by Manu for Rs 40,000 and agreed to pay of bills payable at a discount of 5%.. Motor car was taken over by Tanu for Rs 60,000. Investment realised Rs 76,000 and fixtures Rs 4,000. The expenses of dissolution amounted to Rs 2,200.
Prepare Realisation Account, Bank Account and Partners Capital Accounts.

Chapter 5: Dissolution of Partnership Firm

Exercise

NCERT Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts

Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts - Shaalaa.com

Textbook solutions for Class 12






















NCERT solutions for Class 12 Accountancy chapter 5 - Dissolution of Partnership Firm

NCERT solutions for Class 12 Accountancy chapter 5 (Dissolution of Partnership Firm) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the CBSE Ncert Class 12 Accountancy - Not-for-Profit Organisation and Partnership Accounts solutions in a manner that help students grasp basic concepts better and faster.

Further, we at Shaalaa.com provide such solutions so that students can prepare for written exams. NCERT textbook solutions can be a core help for self-study and acts as a perfect self-help guidance for students.

Concepts covered in Class 12 Accountancy chapter 5 Dissolution of Partnership Firm are Accounting Treatment of Bill - Journal Entries and Ledger, Dissolution of a Partnership Firm - Settlement of Accounts, Dissolution of Partnership, Dissolution of Partnership Firm.

Using NCERT Class 12 solutions Dissolution of Partnership Firm exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. The questions involved in NCERT Solutions are important questions that can be asked in the final exam. Maximum students of CBSE Class 12 prefer NCERT Textbook Solutions to score more in exam.

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