12th | Dissolution of a Partnership Firm | Question No. 17 To 20 | Ts Grewal Solution 2024-2025

Pass Journal entries for payment of following unrecorded liabilities on the dissolution of a firm of partners Shiv and Mohan:

(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 Shiv.

(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.

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.

Realisation Account

2022 was as follows:

On the above date, the firm was dissolved due to certain disagreement among the partners:

(i) Machinery of Rs. 3,00,000 were given to creditors in full settlement of their account and remaining machinery was sold for Rs. 10,000.

(i) Investments realized Rs. 2,90,000.

(iii) Stock was sold for 1,80,000.

(iv) Debtors for 20,000 proved bad.

(V) Realisation expenses amounted to Rs. 10,000.

Prepare Realisation Account. (CBSE 2023)

Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2024, their Balance Sheet was as follows:

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: