commercemine

12th | Dissolution of a partnership firm | Question No. 13 To 16 | Ts Grewal Solution 2023-2024

Question 13:


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.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

 

 

 

 

 

 

a.

Aman’s Capital A/c

Dr.

 

22,500

 

 

Bank A/c

Dr.  

 

32,500

 

 

       To Realisation  A/c

 

 

 

55,000

 

(Being Assets realized)

 

 

 

 

 

 

 

 

 

 

b.

Profit & Loss A/c

Dr.

 

15,000

 

 

     To Aman’s Capital A/c

 

 

 

7,500

 

     To Harsh’s Capital A/c

 

 

 

7,500

 

(Being Profit distributed)

 

 

 

 

 

 

 

 

 

 

c.

Harsh’s Loan A/c

Dr.

 

6,000

 

 

Realisation  A/c

Dr.

 

200

 

 

    To Bank A/c

 

 

 

6,200

 

(Being Loan Discharged)

 

 

 

 

 

 

Dr.

 

5,000

 

d.

Harsh’s Capital A/c

 

 

 

5,000

 

       To Bank A/c

 

 

 

 

 

(Being Expenses paid on behalf of partner)

 

 

 

 

 

 

 

 

 

 

e.

Bank A/c

Dr.

 

300

 

 

    To Realisation  A/c

 

 

 

300

 

(Being Amount received)

 

 

 

 

 

 

 

 

 

 

 

Realisation  A/c

Dr.

 

1,200

 

 

    To Bank A/c

 

 

 

1,200

 

(Being Amount paid)

 

 

 

 

 

 

 

 

 

 

f.

Realisation  A/c

Dr.

 

1,250

 

 

    To Bank A/c

 

 

 

1,250

 

(Being Creditors  paid)

 

 

 

 

 

 

 

 

 

 

g.

Aman’s Capital A/c

Dr.

 

4,000

 

 

Harsh’s Capital A/c

Dr.

 

4,000

 

 

      To Realisation  A/c

 

 

 

8,000

 

(Being Loss on dissolution transferred to Partners Capital A/c)

 

 

 

 

 

 

 

 

 

 

Question 14:


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.

Answer:


Journal

Date

Particulars

L.F.

Debit

`

Credit

 `

(a)

Realisation A/c

Dr.

 

6,000

 

 

To Kunal’s Capital A/c

 

 

 

6,000

 

(Being Kunal agrees to pay off his wife’s loan)

 

 

 

 

 

 

 

 

 

 

(b)

Realisation A/c

Dr.

 

27,000

 

 

To Cash A/c

 

 

 

27,000

 

(Being Creditors  worth  ` 30,000 paid
off at a discount of 10%)

 

 

 

 

 

 

 

 

 

(c)

Rohit’s Loan A/c

Dr.

 

70,000

 

 

To Cash A/c

 

 

 

70,000

 

(Being Loan paid by the firm)

 

 

 

 

 

 

 

 

 

 

(d)

Kunal’s Capital A/c

Dr.

 

3,000

 

 

To Realisation A/c

 

 

 

3,000

 

(Being asset taken over by Kunal)

 

 

 

 

 

 

 

 

 

 

(e)

Rohit’s Capital A/c

Dr.

 

5,000

 

 

Kunal’s Capital A/c

Dr.

 

5,000

 

 

Sarthak’s Capital A/c

Dr.

 

5,000

 

 

To Profit and Loss A/c

 

 

 

15,000

 

(Being Loss distributed equally)

 

 

 

 

 

 

 

 

 

 

(f)

Realisation A/c

Dr.

 

15,000

 

 

To Sarthak’s Capital A/c

 

 

 

15,000

 

(Being remuneration of  ` 15,000 paid for completion of dissolution process)

 

 

 


Question 15:


Suman and Rajan were partners in a firm sharing profits and losses in the ratio of 3: 1. The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for the following transactions after various assets (other than cash in hand and at bank) and third party liabilities have been transferred to Realisation Account:

(a) Dissolution expenses ` 10,000 were paid by the firm.

(b) Rajan had given a loan of ` 60,000 to the firm for which he accepted ` 58,000 in full settlement.

(c) The firm had a debit balance of ` 40,000 in the Profit &Loss Account on the date of dissolution.

(d) Profit on realisation was ` 12,000. (CBSE 2020)

 

 Answer:


 

Date

Particulars

 

`  (Dr.)

` (Cr.)

(a)

Realisation A/c

Dr.

10,000

 

 

 To Cash/Bank A/c

 

 

10,000

 

(Dissolution expenses were paid by the firm)

 

 

(b)

Rajan's Loan A/c

Dr.

60,000

 

 

 To Bank/Cash A/c

 

 

58,000

 

 To Realisation A/c

 

2,000

 

(Rajan‘s loan of ` 60,000 to the firm for which he accepted ` 58,000 in full settlement)

 

 

(c)

Dr. Suman's Capital A/c

Dr.

30,000

 

 

Rajan's Capital A/c

Dr.

10,000

 

 

 To Profit & Loss A/c

 

40,000

 

(Accumulated loss distributed)

 

 

(d)

Realisation A/c                                                  Dr.

12,000

 

 

 To Suman's Capital A/c

 

9,000

 

 To Rajan's Capital A/c

 

3,000

 

(Profit distributed)

 

 

 

Question 16:  Neeraj, Dheeraj and Sheeraj were partners in a firm since 2015. Due to some personal financial needs and constant disagreements among them, they decided to dissolve the firm. Vijay, a financial and legal consultant has been appointed to carry out the dissolution process. He opened Realisation Account and transferred all the recorded assets (including goodwill except the fictitious assets, cash and bank balances) to the debit of Realisation Account and outsiders' liabilities to the credit of Realisation Account.


He observed the following transactions:

(i) There was an old computer which had been written off from the books. It was estimated to realize ` 8,000. It was taken by Neeraj (Partner), at the estimated price less 25%.

(ii) A disputed claim of ` 50,000 of a worker for compensation which remained unrecorded in the books was finally settled at 30,000.

(iii) Dheeraj paid 60,000 for using the name of the firm.

(iv) There was an unrecorded asset of ` 60,000, half of which was sold for 30,000 and the remaining half was taken by Sheeraj (partner) for 25,000.

Pass necessary Journal entries for the above transactions in the books of the firm.

Answer:


 

Date

Particulars

 

Dr. (`)

Cr. (`)

 

Neeraj’s Capital A/c

Dr.

6,000

 

 

 To Realisation A/c

 

 

6,000

 

(Being old computer which had been written off, taken by Neeraj)

 

 

 

 

 

 

 

 

 

Realisation A/c

Dr.

30,000

 

 

 To Bank A/c

 

 

30,000

 

(Being claim a worker for compensation which remained unrecorded in the books was finally settled at 30,000.)

 

 

 

 

Bank A/c

Dr.

60,000

 

 

 To Realisation A/c

 

 

60,000

 

(Being Dheeraj paid 60,000 for using the name of the firm)

 

 

 

 

Bank A/c

Dr.

30,000

 

 

Shreeraj Capital A/c

Dr.

25,000

 

 

To Realisation A/c

 

 

55,000

 

(Being half of which was sold for 30,000 and the remaining half was taken by Sheeraj (partner) for 25,000.)

 

 

 

 

 

 

 

 

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

Class 12 / Volume – I

Chapter 7 – Dissolution of a partnership firm

 

Question No. 1 To 4

Question No. 5 To 8

Question No. 9 To 12

Question No. 13 To 16

Question No. 17 To 20

Question No. 21 To 24

Question No. 25 To 28

Question No. 29 To 32

Question No. 33 To 36

Question No. 37 To 40

Question No. 41 To 44

Question No. 45 To 48

Question No. 49 And 50