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T.S. Grewal solutions for Class 12 Accountancy chapter 7 - Dissolution of a Partnership Firm

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T.S. Grewal T S Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1

T S Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1 - Shaalaa.com

Chapter 7: Dissolution of a Partnership Firm

Exercise

Chapter 7: Dissolution of a Partnership Firm Exercise Exercise solutions [Pages 7 - 68]

Exercise | Q 1 | Page 7

Land and Building (book value) ₹ 1,60,000 sold for ₹ 3,00,000 through a broker who charged 2% commission on the deal. Journalise the transaction, at the time of dissolution of the firm.

Exercise | Q 2 | Page 7

Pass Journal entries in the following cases?
(a) Expenses of realisation ₹ 1,500.
(b) Expenses of realisation ₹ 600 but paid by Mohan, a partner.
(c) Mohan, one of the partners of the firm, was asked to look into the dissolution of the firm for which he was allowed a commission of ₹ 2,000.
(d) Motor car of book value ₹ 50,000 taken over by creditors of the book value of ₹ 40,000 in full settlement.

Exercise | Q 3 | Page 7

Pass Journal entries for the following:
(a) Realisation expenses of ₹ 15,000 were to be met by Rahul, a partner, but were paid by the firm. 
(b) Ramesh, a partner, was paid remuneration of ₹ 25,000 and he was to meet all expenses.
(c) Anuj, a partner, was paid remuneration of ₹ 20,000 and he was to meet all expenses. Firm paid an expense of ₹ 5,000.

Exercise | Q 4 | Page 7

Pass Journal entries for the following:
(a) Realisation expenses amounted to ₹ 10,000 were paid by the firm on behalf of Alok, a partner, with whom it was agreed at ₹ 7,500.
(b) Realisation expenses amounted to ₹ 5,000. It was agreed that the firm will pay ₹ 2,000 and balance by Ravinder, a partner.
(c) Dissolution expenses amounted to ₹ 10,000 were paid by Amit, a partner, on behalf of the firm.

Exercise | Q 5 | Page 7

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

Exercise | Q 6 | Page 52

Pass Journal entries for the following at the time of dissolution of a firm:
(a) Sale of Assets − ₹ 50,000.
(b) Payment of Liabilities − ₹ 10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to ₹ 15,000. The firm had agreed with Amrit, a partner, to reimburse him up to ₹ 10,000.
(e) Z, an old customer, whose account for ₹ 6,000 was written off as bad in the previous year, paid 60% of the amount written off.
(f) Investment (Book Value ₹ 10,000) realised at 150%.

Exercise | Q 7 | Page 52

Pass Journal entries for the following transactions at the time of dissolution of the firm:
(a) Loan of ₹ 10,000 advanced by a partner to the firm was refunded.
(b) X, a partner, takes over an unrecorded asset (Typewriter) at ₹ 300.
(c) Undistributed balance (Debit) of Profit and Loss Account ₹ 30,000. The firm has three partners X,Y and Z.
(d) Assets of the firm realised ₹ 1,25,000.
(e) Y who undertakes to carry out the dissolution proceedings is paid ₹ 2,000 for the same.
(f) Creditors are paid ₹ 28,000 in full settlement of their account of ₹ 30,000.

Exercise | Q 8 | Page 52

Pass necessary Journal entries for the following transactions on the dissolution of the firm P and Q after the various assets (other than cash)  and outside liabilities have been transferred to Realisation Account:
(a) Bank Loan ₹ 12,000 was paid.
(b) Stock worth ₹ 16,000 was taken over by partner Q.
(c) Partner P paid a creditor ₹ 4,000.
(d) An asset not appearing in the books of accounts realised ₹ 1,200.
(e) Expenses of realisation ₹ 2,000 were paid by partner Q.
(f) Profit on realisation ₹ 36,000 was distributed between P and Q in 5 : 4 ratio.

Exercise | Q 9 | Page 52

X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1 respectively. The firm was dissolved on 1st March, 2013. After transferring assets (other than cash) and third party liabilities to the 'Realisation Account' you are provided with the following information:
(a) There was a balance of ₹ 18,000 in the firm's Profit and Loss Account.
(b) There was an unrecorded bike of ₹ 50,000 which was taken over by X.
(c) Creditors of ₹ 5,000 were paid ₹ 4,000 in full settlement  of accounts.
Pass necessary Journal entries for the above at the time of dissolution of firm.

Exercise | Q 10 | Page 52

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

Exercise | Q 11 | Page 53

Aman and Harsh were partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and third party liabilities have been transferred to Realisation Account:
(a) There was furniture worth ₹ 50,000. Aman took over 50% of the furniture at 10% discount and the remaining furniture was sold at 30% profit on book value.
(b) Profit and Loss Account was showing a credit balance of ₹ 15,000 on the date of dissolution.
(c) Harsh's loan of ₹ 6,000 was discharged at ₹ 6,200.
(d) The firm paid realisation expenses amounting to ₹ 5,000 on behalf of Harsh who had to bear these expenses.
(e) There was a bill for 1,200 under discount. The bill was received from Soham who proved insolvent and a first and final dividend of 25% was received from his estate.
(f) Creditors, to whom the firm owed ₹ 6,000, accepted stock of ₹ 5,000 at a discount of 5% and the balance in cash.

Exercise | Q 12 | Page 53

Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal entries for the following after various assets (other than Cash and Bank) and the third party liability have been transferred to Realisation Account:
(a) Kunal agreed to pay off his wife's loan of ₹ 6,000.
(b) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹ 10,000 were given a piece of furniture costing ₹ 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.
(c) Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
(d) A machine which was not recorded in the books was taken over by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
(e) The firm had a debit balance of ₹ 15,000 in the Profit and Loss Account on the date of dissolution.
(f) Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.

Exercise | Q 13 | Page 53

Book Value of assets (other than cash and bank) transferred to Realisation Account is ₹ 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 14 | Page 54

Lal and Pal were partners in a firm sharing profits in the ratio of 3 : 7. On 1st April, 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 ₹ 3,60,000 accepted machinery valued at ₹ 5,00,000 and paid to the firm ₹ 1,40,000.
(b) A second creditor for ₹ 50,000 accepted stock at ₹ 45,000 in full settlement of his claim.
(c) A third creditor amounting to ₹ 90,000 accepted ₹ 45,000 in cash and investments worth ₹ 43,000 in full settlement of his claim.
(d) Loss on dissolution was ₹ 15,000.
Pass necessary Journal entries for the above transactions in the books of firm assuming that all payments were made by cheque.

Exercise | Q 15 | Page 54

Pass the Journal entries for the following transactions on the dissolution of the firm of P and Q after various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Stock ₹ 2,00,000. 'P' took over 50% of stock at a discount of 10%. Remaining stock was sold at a profit of 25% on cost.
(b) Debtors ₹ 2,25,000. Provision for Doubtful Debts ₹ 25,000. ₹ 20,000 of the book debts proved bad.
(c) Land and Building (Book value ₹ 12,50,000) sold for ₹ 15,00,000 through a broker who charged 2% commission.
(d) Machinery (Book value ₹ 6,00,000) was handed over to a creditor at a discount of 10%.
(e) Investment (Book value ₹ 60,000) realised at 125%.
(f) Goodwill of ₹ 75,000 and prepaid fire insurance of ₹ 10,000.
(g) There was an old furniture in the firm which had been written off completely in the books. This was sold for ₹ 10,000.
(h) 'Z' an old customer whose account for ₹ 20,000 was written off as bad in the previous year, paid 60%.
(i) 'P' undertook to pay Mrs. P's loan of ₹ 50,000.
(j) Trade creditors ₹ 1,60,000. Half of the trade creditors accepted Plant and Machinery at an agreed valuation of ₹ 54,000 and cash in full settlement of their claims after allowing a discount of ₹ 16,000. Remaining trade creditors were paid 90% in final settlement.
 

Exercise | Q 16 | Page 54

What Journal entries would be passed for discharge of following unrecorded liabilities on the dissolution of a firm of partners A and B:
(a) There was a contingent liability in respect of bills discounted but not matured of ₹ 18,500. An acceptor of one bill of ₹ 2,500 became insolvent and fifty paise in a rupee was recovered. The liability of the firm on account of this bill discounted and dishonoured has not so far been recorded.
(b) There was a contingent liability in respect of a claim for damages for ₹ 75,000, such liability was settled for ₹ 50,000 and paid by the partner A.
(c) Firm will have to pay ₹ 10,000 as compensation to an injured employee, which was a contingent liability not accepted by the firm.
(d) ₹ 5,000 for damages claimed by a customer has been disputed by the firm. It was settled at 70% by a compromise between the customer and the firm.

Exercise | Q 17 | Page 55

Pass necessary Journal entries on the dissolution of a firm in the following cases:
(a) Dharam, a partner, was appointed to look after the process of dissolution at a remuneration of ₹ 12,000 and he had to bear the dissolution expenses. Dissolution expenses ₹ 11,000 were paid by Dharam.
(b) Jay, a partner, was appointed to look after the process of dissolution and was allowed a remuneration of ₹ 15,000. Jay agreed to bear dissolution expenses. Actual dissolution expenses ₹ 16,000 were paid by Vijay, another partner on behalf of Jay.
(c) Deepa, a partner, was to look after the process of dissolution and for this work she was allowed a remuneration of ₹ 7,000. Deepa agreed to bear dissolution expenses. Actual dissolution expenses ₹ 6,000 were paid from the firm's bank account.
(d) Dev, a partner, agreed to do the work of dissolution for ₹ 7,500. He took away stock of the same amount as his commission. The stock had already been transferred to Realisation Account.
(e) Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of ₹ 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were ₹ 12,000. These expenses were paid by Jeev by drawing cash from the firm.
(f) A debtor of ₹ 8,000 already transferred to Realisation Account agreed to pay the realisation expenses of ₹ 7,800 in full settlement of his account.

Exercise | Q 18 | Page 55

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013, their Balance Sheet was as follows:

Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 1,70,000 Bank 1,10,000
Workmen Compensation Reserve   2,10,000 Debtors 2,40,000
General Reserve 2,00,000 Stock 1,30,000
Ramesh's Current Account 80,000 Furniture 2,00,000
Capital A/cs:   Machinery 9,30,000
Ramesh 7,00,000   Umesh's Current Account   50,000
Umesh 3,00,000 10,00,000      
  16,60,000   16,60,000


On the above date the firm was dissolved.
(a) Ramesh took over 50% of stock at ₹ 10,000 less than book value. The remaining stock was sold at a loss of ₹ 15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
(c) Creditors were paid in full.
(d) There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000.
Prepare Realisation Account.

Exercise | Q 19 | Page 55

Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their partnership firm on 31st March, 2018. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm on 31st March, 2018 was as follows:

BALANCE SHEET as at 31st March, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

80,000

Building 1,20,000
Mrs. Pradeep's Loan 40,000 Investment 30,600
Rajesh's Loan

24,000

Debtors

34,000

 

Investment Fluctuation Fund

8,000

Less: Provision for Doubtful Debts

4,000

30,000

Capital A/cs:     Bills Receivable 37,400
Pradeep

42,000

 

Bank 6,000
Rajesh

42,000

84,000

Profit and Loss A/c 8,000
 

 

 

Goodwill

4,000

 

2,36,000

 

2,36,000


Following terms and conditions were agreed upon:
(a) Pradeep agreed to pay off his wife's loan.
(b) Half of the debtors realised ₹ 12,000 and remaining debtors were used to pay off 25% of the creditors.
(c) Investment sold to Rajesh for ₹ 27,000.
(d) Building realised ₹ 1,52,000.
(e) Remaining creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.
(f) Bill receivables were settled at a loss of ₹ 1,400.
(g) Realisation expenses amounted to ₹ 2,500.
​Prepare Realisation Account.

Exercise | Q 20 | Page 56

Balance Sheet of a firm as at 31st March, 2019, when it was decided to dissolve the same, was:

Liabilities Amount
(₹)
Assets Amount
(₹)
Sundry Creditors                     14,000 Cash at Bank 640
General Reserve  500 Stock 4,740
Capital A/cs:   Debtors 5,540
X 4,000   Machinery   10,580
Y 3,000 7,000      
  21,500   21,500

₹19,500 were realised from all assets except Cash at Bank. The cost of winding up came to ₹ 440. X and Y shared profits in the ratio of 2 : 1 respectively.
Prepare Realisation Account and Capital Accounts of Partners.

Exercise | Q 21 | Page 56

Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2019, their Balance Sheet was as follows:

Liabilities Amount (₹) Assets Amount (₹)
Capital A/cs:                          Land and Building 4,00,000
Achal  3,00,000   Machinery   3,00,000
Vichal 5,00,000 8,00,000 Debtors   2,22,000
Creditors 1,79,000 Cash at Bank   78,000
Employees' Provident Fund 21,000      
  10,00,000   10,00,000

The firm was dissolved on 1st April, 2019 and the Assets and Liabilities were settled as follows:
(a) Land and Building realised ₹ 4,30,000.
(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for ₹ 25,000.
(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary Journal entries for dissolution of the firm.

Exercise | Q 22 | Page 57

Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2019 at which date their Balance Sheet stood as:

Liabilities Assets
Capital A/cs:   Building 45,000
Bale 50,000   Machinery 15,000
Yale 40,000 90,000 Furniture 12,000
General Reserve   8,000 Debtors 8,000
Bale's Loan A/c   3,000 Stock 24,000
Creditors   14,000 Bank 11,000
    1,15,000   1,15,000

(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,000.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account.
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account;    (ii) Capital Accounts of Partners;
(iii) Bale's Loan Account; (iv) Bank Account.

Exercise | Q 23 | Page 57

Shilpa, Meena and Nanda decided to dissolve their partnership on 31st March, 2019. Their profit-sharing ratio was 3 : 2 : 1 and their Balance Sheet was as under:

BALANCE SHEET OF SHILPA, MEENA AND NANDA as at 31st March, 2019

Liabilities Assets
Capital A/cs:   Land 81,000
Shilpa 80,000   Stock 56,760
Meena 40,000 1,20,000 Debtors 18,600
Bank Loan   20,000 Nanda's Capital 23,000
Creditors   37,000 Cash 10,840
Provision For Doubtful Debts   1,200    
General Reserve   12,000    
    1,90,200   1,90,200


It is agreed as follows:
The stock of value of ₹ 41,660 are taken over by Shilpa for ₹ 35,000 and she agreed to discharge bank loan. The remaining stock was sold at ₹ 14,000 and debtors amounting to ₹ 10,000 realised ₹ 8,000. Land is sold for ₹ 1,10,000. The remaining debtors realised 50% at their book value. Cost of realisation amounted to ₹ 1,200. There was a typewriter not recorded in the books worth of ₹ 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account, Partners' Capital Accounts, and Cash Account to Close the books of the firm.

Exercise | Q 24 | Page 58

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2019
Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 38,000 Cash at Bank 11,500
Mrs. A's Loan 10,000 Stock 6,000
B's Loan 15,000 Debtors 19,000
Reserve 5,000 Furniture 4,000
A's Capital 10,000   Plant 28,000
B's Capital 8,000 18,000 Investments 10,000
      Profit and LossA/C 7,500
    86,000   86,000


The firm was dissolved on 31st March, 2019 and both the partners agreed to the following:
(a) A took Investments at an agreed value of ₹ 8,000. He also agreed to settle Mrs. A's Loan.
(b) Other assets realised as: Stock − ₹ 5,000; Debtors  − ₹ 18,500; Furniture  − ₹ 4,500; Plant  − ₹ 25,000.
(c) Expenses of realisation came to ₹ 1,600.
(d) Creditors agreed to accept ₹ 37,000 in full settlement of their claims.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Exercise | Q 25 | Page 58

Balance Sheet of P, Q and R as at 31st March, 2019, who were sharing profits in the ratio of 5 : 3 : 1, was:
 

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bills Payable

40,000

Cash at Bank 40,000
Loan from Bank 30,000 Stock 19,000
General Reserve

9,000

Sundry Debtors

42,000

 

Capital A/cs:

 

Less: Provision for Doubtful Debts

2,000

40,000

P 44,000      
Q

36,000

 

Building 40,000
R

20,000

1,00,000

Plant and Machinery

40,000

 

 

 

 

 

 

1,79,000

 

1,79,000

 

 

 

 

 
The partners dissolved the business. Assets realised − Stock ₹ 23,400; Debtors 50%; Fixed Assets 10% less than their book value. Bills Payable were settled for ₹ 32,000. There was an Outstanding Bill of Electricity ₹ 800 which was paid off. Realisation expenses ₹ 1,250 were also paid.
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Exercise | Q 26 | Page 58

Vinod, Vijay and Venkat are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve their firm on 31st March, 2019, the date on which their Balance Sheet stood as:
 

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

17,000

Bank 3,500
Bills Payable 12,000 Stock 19,800
Vinod's Loan

5,300

Debtors

15,000

 

General Reserve

6,000

Less: Provision for Doubtful Debts

1,000

14,000

Capital A/cs:     Investments 4,000
Vinod 25,000   Furniture 10,000
Vijay

11,000

 

Machinery 33,000
Venkat

8,000

44,000

   
 

84,300

 

84,300

 
The following additional information is given:
(a) The Investments are taken by Vinod for ₹ 5,000 in settlement of his loan
(b)

 Assets realised as follows:   ₹
Stock 17,500
Debtors 14,500
Furniture 6,800
Machinery 30,300


(c) Expenses on realisation amounted to ₹ 2,000.
Close the books of the firm giving relevant Ledger Accounts.

Exercise | Q 27 | Page 59

P, Q and R were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They agreed to dissolve their partnership firm on 31st March, 2019. P was deputed to realise the assets and pay the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm was:

Balance Sheet as at 31st March, 2019

Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors                    10,000 Stock 5,500
Bills Payable 3,700 Investments                                 15,000
Investments Fluctuation Reserve          4,500 Debtors 7,100  
Capital A/cs:    Less: Provision for Doubtful Debtors 450 6,650
P 37,550   Cash   5,600
Q 15,000 52,550 R's Capital A/c   8,000
    Plant and Machinery   30,000
  70,750   70,750


P took over Investments for ₹ 12,500. Stock and Debtors realised ₹ 11,500. Plant and Machinery were sold to Q for ₹ 22,500 for cash. Unrecorded assets realised ₹ 1,500. Realisation expenses paid amounted to ₹ 900.
Prepare necessary Ledger Accounts to close the books of the firm.

Exercise | Q 28 | Page 59

Ashu and Harish are partners sharing profit and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2019. Their Balance Sheet on the above date was:

Liabilities Amount
(₹)
Assets Amount
​(₹)
Capital A/cs:                          Building 80,000
Ashu 1,08,000    Machinery   70,000
Harish 54,000 1,62,000 Furniture   14,000
Creditors 88,000 Stock   20,000
Bank Overdraft 50,000 Investments   60,000
    Debtors   48,000
    Cash in Hand   8,000
  3,00,000   3,00,000

Ashu is to take over the building at ₹ 95,000 and Machinery and Furniture is taken over by Harish at value of ₹ 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 ₹ 46,000, expenses of realisation amounted to ₹ 3,000. Prepare necessary Ledger Accounts.

Exercise | Q 29 | Page 60

A, B and C were equal partners. On 31st March, 2019, their Balance Sheet stood as:

Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 50,400 Cash 3,700
Reserve 12,000 Stock 20,100
Capital A/cs:   Debtors 62,600
   A  40,000   Loan to A 10,000
   B 25,000   Investments 16,000
   C 15,000 80,000 Furniture 6,500
      Building 23,500
  1,42,400   1,42,400

   
The firm was dissolved on the above date on the following terms:
(a) For the purpose of dissolution, Investments were valued at ₹ 18,000 and A took over the Investments at this value.
(b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
(c) Expenses of realisation amounted to ₹ 1,300.
(d) Creditors allowed a discount of ₹ 800.
(e) One Bill receivable for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay anything and hence the bill had to be met by the firm.
Prepare Realisation Account, Partner's Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.

Exercise | Q 30 | Page 60

Yogesh and Naresh were partners sharing profits equally. They dissolved the firm on 1st April, 2019. Naresh was assigned the responsibility to realise the assets and pay the liabilities at a remuneration of ₹10,000 including expenses. Balance Sheet of the firm as on that date was as follows:

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

40,000

Cash/Bank 6,000
Bills Payable 40,000 Investments 30,000
Naresh's Loan

44,000

Debtors

40,000

 

Mrs. Yogesh's Loan

42,000

Less: Provision for Doubtful Debts

4,000

36,000

Investment Fluctuation Reserve   8,000 Bills Receivable 33,400
Capital A/cs:     Profit and Loss A/c 1,10,600
Yogesh

21,000

 

   
Naresh

21,000

42,000

   
 

2,16,000

 

2,16,000


The firm was dissolved on following terms:
(a) Yogesh was to pay his wife's loan.
(b) Debtors realised ₹ 30,000.
(c) Naresh was to take investments at an agreed value of ₹ 26,000.
(d) Creditors and Bills Payable were payable after two months but were paid immediately at a discount of 15% p.a.
(e) Bills Receivable were received allowing 5% rebate.
(f) A Debtor previously written off as Bad Debt paid ₹ 15,000.
(g) An unrecorded asset realised ₹10,000.
Prepare Realisation Account, Partners' Capital Accounts, Partners' Loan Account and Cash/Bank Account.

Exercise | Q 31 | Page 61

A, B and C are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2019, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:

Liabilities Amount
(₹)
Assets Amount
​(₹)
Creditors 40,000 Cash at Bank 3,000
Loan A/c:   Stock 50,000
A 10,000 Sundry Debtors 50,000
Workmen Compensation Reserve 21,000 Land and Building 57,000
Capital A/cs:   Profit and Loss A/c 15,000
 A  60,000   Advertisement Suspense A/c 6,000
 B 40,000      

 C

10,000 1,10,000    
  1,81,000   1,81,000

   
During the course of realisation, a liability under a suit for damages is settled at ₹ 20,000 as against ₹ 5,000 only provided for in the books of the firm.
Land and Building were sold for ₹ 40,000 and the Stock and Sundry Debtors realised ₹ 30,000 and ₹ 42,000 respectively. The expenses of realisation amounted to ₹ 1,200.
There was a car in the firm, which was completely written off from the books. It was taken by A for ₹ 20,000. He also agreed to pay Outstanding Salary of ₹ 20,000 not provided in books.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Exercise | Q 32 | Page 61

A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2019, their Balance Sheet was:

Liabilities Amount
(₹)
Assets Amount
(₹)
Bank Overdraft                    30,000 Cash in Hand 6,000
General Reserve 56,000 Bank Balance 10,000
Investments Fluctuation Reserve            20,000 Sundry Debtors 26,000  
A's Loan 34,000 Less: Provision for Doubtful Debtors 2,000 24,000
Capital A/c:                                     
A 50,000 Investments 40,000
      Stock   10,000
    Furniture   10,000
    Building   60,000
    B's Capital   30,000
  1,90,000   1,90,000


On that date, the partners decide to dissolve the firm. A took over Investments at an agreed valuation of ₹ 35,000. Other assets were realised as follows:
Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ₹ 1,00,000.
Compensation to employees paid by the firm amounted to ₹ 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners' Capital Accounts and Bank Account.

Exercise | Q 33 | Page 62

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 31st March, 2019 when the Balance Sheet of the firm as under:

Liabilities Amount
(₹)
Assets Amount
(₹)
Sundry Creditors      20,000 Bank 7,500
Bills Payable 25,500 Sundry Debtors 58,000
Babu's Loan          30,000 Stock   39,500
Capital A/cs:   Machinery 48,000
Ashok 70,000   Investments   42,000
Babu 55,000   Freehold Property   50,500
Chetan 27,000 1,52,000      
Current A/cs:                        
Ashok 10,000        
Babu 5,000        
Chetan 3,000 18,000      
  2,45,500   2,45,500


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

Exercise | Q 34 | Page 62

X, Y and Z carrying on business as merchants and sharing profits and losses in the ratio of 2 : 2 : 1, dissolved their firm as at 31st March, 2019 on which date their Balance Sheet was as follows:

Liabilities Amount
(₹)
Assets Amount
​(₹)
Sundry Creditors      41,500 Cash at Bank 22,500
Bills Payable 20,000 Stock 80,000
Bank Loan          40,000 Debtors 50,000  
General Reserve 50,000 Less: Provision for Doubtful Debts 2,500 47,500
Investments Fluctuation Reserve    40,000 Investments 55,000
Capital A/cs:   Premises 1,51,500
 X 75,000        
 Y 75,000        
 Z 15,000 1,65,000      
  3,56,500   3,56,500


A bill for ₹ 5,000 received from Mohan discounted from bank is not met on maturity.
The assets except Cash at Bank and Investments were sold to a company which paid ₹ 3,25,000 in cash.The Investments were sold and ₹ 56,500 were received. Mohan proved insolvent and a dividend of 50% was received from his estate. Sundry Creditors (including Bills Payable) were paid ₹ 57,500 in full settlement. Realisation Expenses amounted to ₹ 15,000.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account. 

Exercise | Q 35 | Page 63

Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2019, the Balance Sheet of the firm was:

Sundry Creditors 75,000 Cash 6,000
Bills Payable 30,000 Bank 30,000
Rita's Loan 15,000 Stock 75,000
Reserve       24,000 Book Debts 66,000  
Capital A/cs:       Less: Provision for Doubtful Debts 6,000 60,000
Rita 90,000        
Sobha 30,000 1,20,000 Plant and Machinery   45,000
    Land and Building 48,000
  2,64,000   2,64,000


The firm was dissolved on the date given above. The following transactions took place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised ₹ 54,000; balance of the Stock was sold at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised ₹ 75,000. Land and Building ₹ 1,20,000.
(e) Rita took the goodwill of the firm at a value of ₹ 30,000.
(f) An unrecorded asset of ₹ 6,900 was handed over to an unrecorded liability of ₹ 6,000 in full settlement.
(g) Realisation expenses were ₹ 5,250.
Show Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Exercise | Q 35 | Page 63

Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2019, the Balance Sheet of the firm was:

Sundry Creditors 75,000 Cash 6,000
Bills Payable 30,000 Bank 30,000
Rita's Loan 15,000 Stock 75,000
Reserve       24,000 Book Debts 66,000  
Capital A/cs:       Less: Provision for Doubtful Debts 6,000 60,000
Rita 90,000        
Sobha 30,000 1,20,000 Plant and Machinery   45,000
    Land and Building 48,000
  2,64,000   2,64,000


The firm was dissolved on the date given above. The following transactions took place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised ₹ 54,000; balance of the Stock was sold at a profit of 30% on cost.
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised ₹ 75,000. Land and Building ₹ 1,20,000.
(e) Rita took the goodwill of the firm at a value of ₹ 30,000.
(f) An unrecorded asset of ₹ 6,900 was handed over to an unrecorded liability of ₹ 6,000 in full settlement.
(g) Realisation expenses were ₹ 5,250.
Show Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Exercise | Q 36 | Page 63

Following is the Balance Sheet of Arvind and Balbir as at 31st March, 2019:
 

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Trade Creditors

45,000

Cash 750
Bills Payable 12,000 Bank 12,000
Mrs. Arvind's Loan 7,500 Stock 7,500
Mrs. Balbir's  Loan 15,000 Investments 15,000
Reserve Fund

15,000

Book Debts

30,000

 

Investments Fluctuation  Reserve

1,500

Less: Provision for Doubtful Debts

3,000

27,000

Capital A/cs:   Building   22,500
Arvind

15,000

 

Plant 30,000
Balbir

15,000

30,000

Goodwill

6,000

 

 

 

Profit and Loss A/c

5,250

 

1,26,000

 

1,26,000

 
 The firm was dissolved on the above date under the following arrangement:
(a) Arvind promised to pay off Mrs. Arvind's Loan and took Stock at ₹ 6,000.
(b) Balbir took half the Investments @ 10% discount.
(c) Book Debts realised ₹ 28,500.
(d) Trade Creditors and Bills Payable were due on average basis of one month after 31st March, but were paid immediately on 31st March @ 2% discount per annum.
(e) Plant realised ₹ 37,500; Building ₹ 60,000; Goodwill ₹ 9,000 and remaining Investments ₹ 6,750.
(f) An old typewriter, written off completely from the firm's books, now estimated to realise ₹ 450. It was taken by Balbir at this estimated price.
(g) Realisation expenses were ₹ 1,500.
Show Realisation Account, Capital Accounts of Partners and Bank Account.

Exercise | Q 37 | Page 64

Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2019, their Balance Sheet was:

Liabilities Amount
(₹)
Assets Amount
(₹)
Creditors 50,000 Cash  60,000
Bank Loan 35,000 Debtors 75,000
Employees' Provident Fund 15,000 Stock 40,000
Investments Fluctuation Reserve 10,000 Investments 20,000
Commission Received in Advance 8,000 Plant 50,000
Capital A/cs:   Profit and Loss A/c 3,000
Anju 50,000      
Manju 50,000      

Sanju

30,000 1,30,000    
  2,48,000   2,48,000

   
On this date, the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
Anju realised the assets as follows: Debtors ₹ 60,000; Stock ₹ 35,500; Investments ₹ 16,000; Plant 90% of the book value. Expenses of Realisation amounted to ₹ 7,500. Commission received in advance was returned to customers after deducting ₹ 3,000.
Firm had to pay ₹ 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to ₹ 17,000. This liability was not provided for in the above Balance Sheet. ₹ 20,000 had to be paid for Employees' Provident Fund.
Prepare Realisation Account, Capital Accounts of Partners and Cash Account. 

Exercise | Q 38 | Page 64

A, B and C were in partnership sharing profits in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm as at 31st March, 2019 was:
 

Liabilities Amount
(₹)
Assets Amount
(₹)
Capital A/cs:   Building 20,000
 A 12,410   Plant 31,220
 B  8,650   Goodwill 10,000
 C 80,620 1,01,680 100 Shares in X Ltd. (At cost) 2,400
Creditors   11,210 1,000 Shares in Y Ltd. (At cost) 10,000
Reserve for Depreciation on Plant   20,000 Stock 11,240
      Debtors 8,740
      Bank 1,210
      Patents 38,080
    1,32,890   1,32,890


It was agreed to dissolve the partnership as on 31st March, 2019 and the terms of dissolution were−
(a) A to take over the Building at an agreed amount of ₹ 31,500.
(b) B, who was to carry on the business, to take over the Goodwill, Stock and Debtors at book value, the Patents at ₹ 30,000 and Plant at ₹ 5,000. He was also to pay the Creditors.
(c) C to take over shares in X Ltd. at ₹ 15 each.
(d) The shares in Y Ltd. to be divided in the profit-sharing ratio.
Show Ledger Accounts recording the dissolution in the books of the firm.

Exercise | Q 39 | Page 65

Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st, March, 2017 their Balance Sheet was as follows:
 

BALANCE SHEET OF SRIJAN, RAMAN AND MANAN as on 31st March, 2017

Liabilities Amount
(₹)
Assets Amount
(₹)
Capitals:   Capital: Manan 10,000
Srijan 2,00,000   Plant 2,20,000
Raman 1,50,000 3,50,000 Investments 70,000
Creditors   75,000 Stock 50,000
Bills Payable   40,000 Debtors 60,000
Outstanding Salary   35,000 Bank 10,000
      Profit and Loss Account 80,000
    5,00,000   5,00,000


On the above date they decided to dissolve the firm.
(a) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.
(b)

Assets were realised as follows:
Plant 85,000
Stock 33,000
Debtors 47,000


(c) Investments were realised at 95% of the book value.
(d) The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
(e) A contingent liabillity in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for ₹ 15,000.
(f) Expenses of realisation amounting to ₹ 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Exercise | Q 40 | Page 65

A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. They decided to dissolve their firm on 31st March, 2019 when the Balance Sheet was:
 

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Creditors

40,000

Cash

40,000

Bills Payable

46,000

Debtors

70,000

 
Employees’ Provident Fund

32,000

 Less: Provision for Doubtful Debts

6,000

64,000

Mrs. A’s Loan

38,000

Stock

50,000

C’s Loan

30,000

Investments

60,000

Investments Fluctuation Reserve

16,000

Furniture

42,000

Capitals A/cs:   Machinery

1,36,000

  A

1,20,000

  Land

1,00,000

  B

1,00,000

  Goodwill

 30,000 

  C

1,00,000

3,20,000

   
 

5,22,000

 

5,22,000


Following transactions took place:
(a) A took over Stock at ₹ 36,000. He also took over his wife's loan.
(b) B took over half of Debtors at ₹ 28,000.
(c) C took over Investments at ₹ 54,000 and half of Creditors at their book value.
(d) Remaining Debtors realised 60% of their book value. Furniture sold for ₹ 30,000; Machinery ₹ 82,000 and Land ₹ 1,20,000.
(e) An unrecorded asset was sold for ₹ 22,000.
(f) Realisation expenses amounted to ₹ 4,000.
Prepare necessary Ledger Accounts to close the books of the firm.

Exercise | Q 41 | Page 66

Krishna and Arjun are partners in a firm. They share profits in the ratio of 4 : 1. They decide to dissolve the firm on 31st March, 2019 at which date their Balance Sheet stood as:
 

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bank Loan

1,500

Trademarks

1,200

Creditors for Goods

8,000

Machinery

12,000

Bills Payable

   500

Furniture

     400

Capital A/cs:

 

Stock

  6,000

 Krishna

16,000

 

Debtors

9,000

 

 Arjun

6,000

22,000

 Less: Provision for Bad Debts

400

8,600

   

Cash at Bank

2,800

   

Advertisement Suspense

1,000

 

32,000

 

32,000


The realisation shows the following results:
(a) Goodwill was sold for ₹ 1,000.
(b) Debtors were realised at book value less 10%.
(c) Trademarks realised ₹ 800.
(d) Machinery and Stock-in-Trade were taken by Krishna for ₹ 14,400 and ₹ 3,600 respectively.
(e) An unrecorded asset estimated at ₹ 500 was sold for ₹ 200.
(f) Creditors for goods were settled at a discount of ₹ 80. The expenses on realisation were ₹ 800.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account. ​

Exercise | Q 42 | Page 66

There are two partners X and Y in a firm and their capitals are ₹ 50,000 and ₹ 40,000. The creditors are ₹ 30,000. The assets of the firm realise ₹ 1,00,000. How much will X and Y receive?

Exercise | Q 43 | Page 66

A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2019, A's Capital and B's Capital were ₹ 30,000 and ₹ 20,000 respectively but C owed ₹ 5,000 to the firm. The liabilities were ₹ 20,000. The assets of the firm realised ₹ 50,000. 
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Exercise | Q 44 | Page 67

A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2018. As on that date their capitals were: A ₹ 7,000 and B ₹ 4,000. There were also due on Loan A/c to A ₹ 4,500 and to B ₹ 750. The other liabilities amounted to ₹ 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised ₹ 24,000.
Prepare necessary accounts showing the final settlement between partners.

Exercise | Q 45 | Page 67

A and B dissolve their partnership. Their position as at 31st March, 2019 was:

Particulars

A's Capital    25,000
B's Capital    15,000
Sundry Creditors    20,000
Cash in Hand and at Bank         750


The balance of A's Loan Account to the firm stood at ₹ 10,000. The realisation expenses amounted to ₹ 350. Stock realised ₹ 20,000 and Debtors ₹ 25,000. B took a machine at the agreed valuation of ₹ 7,500. Other fixed assets realised ₹ 20,000.
You are required to close the books of the firm.

Exercise | Q 46 | Page 67

Ashok and Kishore were in partnership sharing profits in the ratio of 3 : 1. They agreed to dissolve the firm. The assets (other than cash of ₹ 2,000) of the firm realised ₹ 1,10,000. The liabilities and other particulars on that date were:

 Creditors         ₹ 40,000  
Ashok's Capital         ₹ 1,00,000  
Kishore's Capital         ₹ 10,000 (Dr. Balance)
Profit and Loss A/c         ₹ 8,000 (Dr. Balance)
Realisation Expenses         ₹ 1,000  

You are required to close the books of the firm.

Exercise | Q 47 | Page 67

X, Y and Z entered into a partnership and contributed ₹ 9,000; ₹ 6,000 and ₹ 3,000 respectively. They agreed to share profits and losses equally. The business lost heavily during the very first year and they decided to dissolve the firm. After realising all assets and paying off liabilities, there remained a cash balance of ₹ 6,000. 
Prepare Realisation Account and Partner's Capital Accounts.

Exercise | Q 48 | Page 67

A, B and C started business on 1st April, 2018 with capitals of ₹ 1,00,000; ₹ 80,000 and ₹ 60,000 respectively sharing profits (losses) in the ratio of 4 : 3 : 3. For the year ended 31st March, 2019, the firm suffered a loss of ₹ 50,000. Each of the partners withdrew ₹ 10,000 during the year.
On 31st March, 2019, the firm was dissolved, the creditors of the firm stood at ₹ 24,000 on that date and Cash in Hand was ₹ 4,000. The assets realised ₹ 3,00,000 and Creditors were paid ₹ 23,500 in full settlement of their claims.
Prepare Realisation Account and show your workings clearly.

Exercise | Q 49 | Page 67

A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ₹ 5,000) amounted to ₹ 88,000, assets realised ₹ 80,000 (including an unrecorded asset which realised ₹ 4,000). A contingent liability on account of bills discounted ₹ 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ₹ 20,000 each.
Prepare Realisation Account, Partners' Capital Accounts and Cash Account.

Exercise | Q 50 | Page 68

On 1st April, 2018, A, B and C commenced business in partnership sharing profits and losses in proportion of 1/2, 1/3 and 1/6 respectively. They paid into their Bank A/c as their capitals ₹ 22,000; ₹ 10,000 by A, ₹ 7,000 by B and ₹ 5,000 by C. During the year, they drew ₹ 5,000; being ₹ 1,900 by A, ₹ 1,700 by B and ₹ 1,400 by C.
On 31st March, 2019, they dissolved their partnership, A taking up Stock at an agreed valuation of ₹ 5,000, B taking up Furniture at ₹ 2,000 and C taking up Debtors at ₹ 3,000. After paying up their Creditors, there remained a balance of ₹ 1,000 at Bank. Prepare necessary accounts showing the distribution of the cash at the Bank and of the further cash brought in by any partner or partners as the case required. 

Exercise | Q 51 | Page 68

The partnership between A and B was dissolved on 31st March, 2019. On that date the respective credits to the capitals were A − ₹ 1,70,000 and B − ₹ 30,000. ₹ 20,000 were owed by B to the firm; ₹ 1,00,000 were owed by the firm to A and ₹ 2,00,000 were due to the Trade Creditors. Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B.
The assets represented by the above stated net liabilities realise ₹ 4,50,000 exclusive of ₹ 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners' Capital Accounts and Cash Account showing the distribution to the partners.

Exercise | Q 52 | Page 68

X and Y were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve the firm on 31st March, 2019. On that date, their Capitals were X − ₹ 40,000 and Y − ₹ 30,000. Creditors amounted to ₹ 24,000.
Assets were realised for ₹ 88,500. Creditors of ₹ 16,000 were taken over by X at ₹ 14,000. Remaining Creditors were paid at ₹ 7,500. The cost of realisation came to ₹ 500.
Prepare necessary accounts.

Exercise | Q 53 | Page 68

P, Q and R are partners sharing profits and losses in the ratio of 3 : 3 : 2 respectively. Their respective capitals are in their profit-sharing proportions. On 1st April, 2018, the total capital of the firm and the balance of General Reserve are ₹ 80,000 and ₹ 20,000 respectively. During the year 2018-19, the firm made a profit of ₹ 28,000 before charging interest on capital @ 5%. The drawings of the partners are P___________₹ 8,000; Q___________₹ 7,000; and R__________₹ 5,000. On 31st March, 2019, their liabilities were ₹ 18,000.
On this date, they decided to dissolve the firm. The assets realised ₹ 1,08,600 and realisation expenses amounted to ₹ 1,800.
Prepare necessary Ledger Accounts to close the books of the firm.

Exercise | Q 54 | Page 68

X, Y and Z entered into partnership on 1st April, 2016. They contributed capital ₹ 40,000, ₹ 30,000 and ₹ 20,000 respectively and agreed to share profits in the ratio of 3 : 2 : 1. Interest on capital was to be allowed @ 15% p.a. and interest on drawings was to be charged at an average rate of 5%. During the two years ended 31st March, 2018, the firm made profit of ₹ 21,600 and ₹ 25,140 respectively before allowing or charging interest on capital and drawings. The drawings of each partner were ₹ 6,000 per year.
On 31st March, 2018, the partners decided to dissolve the partnership due to difference of opinion. On that date, the creditors amounted to ₹ 20,000. The assets, other than cash ₹ 2,000, realised ₹ 1,21,000. Expenses of dissolution amounted to ₹ 760.
Draw up necessary Ledger Accounts to close the books of the firm.

Chapter 7: Dissolution of a Partnership Firm

Exercise

T.S. Grewal T S Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1

T S Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1 - Shaalaa.com

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T.S. Grewal solutions for Class 12 Accountancy chapter 7 - Dissolution of a Partnership Firm

T.S. Grewal solutions for Class 12 Accountancy chapter 7 (Dissolution of a 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 T S Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1 solutions in a manner that help students grasp basic concepts better and faster.

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Concepts covered in Class 12 Accountancy chapter 7 Dissolution of a Partnership Firm are Dissolution of Partnership Firm, Dissolution of Partnership, Dissolution of a Partnership Firm - Settlement of Accounts, Accounting Treatment of Bill - Journal Entries and Ledger.

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