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12th | Dissolution of a Partnership Firm | Question No.  17 To 20 | Ts Grewal Solution 2022-2023

Question 17:


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.

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

 ( `)

(a)

Realisation A/c

Dr.

 

12,000

 

 

    To Dharam’s Capital A/c

 

 

 

12,000

 

(Remuneration paid)

 

 

 

 

 

 

 

 

 

 

(b)

Realisation A/c

Dr.

 

15,000

 

 

    To Jay's’s Capital A/c

 

 

 

15,000

 

(Remuneration paid)

 

 

 

 

 

 

 

 

 

 

 

Jay's Capital A/c

 Dr.

 

16,000

 

 

    To Vijay's Capital A/c

 

 

 

16,000

 

(Expenses borne by Jay, paid by Vijay)

 

 

 

 

 

 

 

 

 

 

(c)

Realisation A/c

Dr.

 

7,000

 

 

    To Deepa’s Capital A/c

 

 

 

7,000

 

(Remuneration paid)

 

 

 

 

 

 

 

 

 

 

 

Deepa’s Capital A/c

Dr.

 

6,000

 

 

    To Bank A/c

 

 

 

6,000

 

(Expenses paid by firm)

 

 

 

 

 

 

 

 

 

 

(d)

No Entry

 

 

 

 

 

 

 

 

 

 

(e)

Realisation A/c

Dr.

 

10,000

 

 

   To Jeev's Capital A/c

 

 

 

10,000

 

(Remuneration paid)

 

 

 

 

 

 

 

 

 

 

 

Jeev's Capital A/c

Dr.

 

12,000

 

 

   To Bank A/c

 

 

 

12,000

 

(Expenses paid by firm)

 

 

 

 

 

 

 

 

 

 

(f)

No Entry

 

 

 

 

 

Question 18:


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

( `)

Assets

( `)

Creditors

1,70,000

Bank

1,10,000

Workmen Compensation Reserve  

2,10,000

Debtor

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. Debtor 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 repai
` for  ` 1,60,000 which was settled at  ` 1,40,000.
Prepare Realisation Account.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

`

Particulars

`

Sundry Assets-                        

 

Creditors

1,70,000

Debtor

2,40,000

 

Ramesh’s Current A/c (Stock)

55,000

Stock

1,30,000

 

Cash A/c (Assets Realised)

 

Furniture

2,00,000

 

Stock

50,000

 

Machinery             

9,30,000

15,00,000

Machinery

4,50,000

 

 

 

Debtor

2,28,000

7,28,000

To Cash A/c (Liabilities)

 

Umesh’s Current A/c (Furniture)

50,000

Creditors

1,70,000

 

 

 

Outstanding Bill

1,40,000

3,10,000

Realisation Loss

 

 

 

Ramesh’s Current A/c

5,64,900

 

 

 

Umesh’s Current A/c

2,42,100

8,07,000

 

18,10,000

 

18,10,000

 

 

 

 

 

Question 19:


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

 ( `)

Assets

 ( `)

Creditors

80,000

Building

1,20,000

M `. Pradeep's Loan

40,000

Investment

30,600

Rajesh's Loan

24,000

Debtor

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 Debtor realised 
` 12,000 and remaining Debtor 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.

 

Answer:


Dr.

Realisation A/c

Cr.

Particulars

 ( `)

Particulars

 ( `)

To Building

1,20,000

By Provision for Doubtful Debts

4,000

To Investments

30,600

By Creditors

80,000

To Debtor

34,000

By Mr. Pradeep’s Loan

40,000

To Bills Receivable

37,400

By Investment Fluctuation Fund

8,000

To Goodwill

4,000

 

 

To Pradeep’s Capital A/c (Wife loan paid)

40,000

By Bank A/c:

 

To Cash A/c (Creditors  Paid) (WN1)

59,000

  Debtor

12,000

 

To Pradeep’s Capital A/c (Commission)

1,000

  Building

1,52,000

 

To Cash A/c (Realisation Expenses)

2,500

  Bills Receivable

36,000

2,00,000

To Profit transferred to:

 

 

 

Pradeep’s Capital A/c

18,300

 

By Cash A/c (Sale of Investments)        

27,000

Rajesh’s Capital A/c

12,200

30,500

 

 

 

 

 

 

 

3,59,000

 

3,59,000

 

 

 

 

  Working Notes:

Remaining Creditors  to be paid

=

 ` (80,000 × 75/100) =  ` 60,000

Discount Received on Creditors

=

 ` (60,000 × 10/100 × 2/12) =  ` 1,000

Amount paid to the Creditors

=

 ` (60,000 – 1,000) =  ` 59,000

 

Question 20: Ashish and Kanav were partners ina firm sharing profits and losses in the ratio of 3:2.On 31st March, 2018 their Balance Sheet was as follows:


BALANCE SHEET OF ASHISH AND KANAV as at 315t March, 2018

Liabilities

`

Assets

`

Trade Creditors

42,000

Bank

35,000

Employees' Provident Fund

10,000

Stock

24,000

Mrs. Ashish's Loan

9,000

Debtors

19,000

Kanav's Loan

35,000

Furniture

40,000

Workmen's Compensation Fund

20,000

Plant

2,10,000

Investment Fluctuation Reserve

4,000

Investments

32,000

Capitals:

Ashish: 1,20,000

Kanav: 80,000

 

 

2,00,000

Profit and Loss A/c

10,000

 

3,70,000

 

3,70,000

On the above date they decided to dissolve the firm.

(a) Ashish agreed to take over furniture at 38,000 and pay off Mrs. Ashishis loan.

(b) Debtors realised 18,500 and plant realised 10% more.

(c) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold ata gain of 10%.

(d) Trade creditors took over investments in full settlement.

(e) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of 12,000 and to bear realisation expenses. Actual expenses of realisation amounted to 8,000.

Prepare Realisation Account. (CBSE 2019)

Answer:


Realisation a/c

Dr.

 

 

Cr.

Particulars

`

Particulars

`

To Stock

To Debtors

To Furnisture

To Plant

To Investiment

To Ashish’s capital a/c

Mrs. Ashish loan taken

To Kanav’s capital a/c

Ageed to bear realization expenses

To Bank a/c

EPF paid

To Captial – profit transferred to;

Ashish 20,020×3/5=12,012

Kanav 20,020×2/5=8,008

 

(In the ratio 3:2)

24,000

19,000

40,000

2,10,000

32,000

9,000

 

12,000

 

 

60,000

 

 

 

 

20,020

 

By Creditors

By employees provident fund

By Mrs. Ashish’s loan

By Investment fluctuation reserve

By Ashish’s capital a/c

(Furniture taken)

By Kanav’s capital a/c

Stock(24,000×40%×80%)

By Bank a/c (Assets realised)

Debtors    =       18,500

Plant    =    2,31,000

Stock    =       15,840

(24,000×24%×110%)

42,000

60,000

9,000

4,000

 

38,000

 

7,680

 

 

 

 

2,65,340

 

4,26,020

 

4,26,020

 

Ts Grewal Solution 2022-2023

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