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12th | Dissolution of a Partnership Firm | Question No.  21 To 24 | Ts Grewal Solution 2022-2023

Question 21: A, B and C were partners sharing profits and losses in the ratio of 2:2:1.Their Balance Sheet as at 31st March, 2018 was as follows:


 

BALANCE SHEET OF A, B AND C as at 31st March, 2018

Liabilities

 

`

Assets

 

`

Capitals:

A

B

C

Creditors

 

 

7,50,000

3,00,000

2,50,000

2,00,000

 

 

 

13,00,000

Cash at Bank

Sundry Debtors

Less: Provision for Bad Debts

Stock

Fixed Assets

3,00,000

1,95,000

5,000

 

 

1,90,000

3,00,000

7,10,000

 

 

 

15,00,000

 

 

15,00,000

On the above date they dissolved the firm and following amounts were realised:

Fixed Assets 6,75,000; StockF3,39,000; Debtors1,35,000; Creditors were paid 1,85,000 in full settlement of their claim. Expenses on realisation amounted to F 19,000.

Pass the necessary Journal entries on the dissolution of the firm. (CBSE 2019)

 

Answer:


Journal

 

Date

Particulars

 

L.F.

Dr. `

Cr. `

31 March

Realisation a/c

    To Sundry Debtors a/c

    To Stock A/c

    To Fixed assets A/c

(Being assets transferred to realization account)

Dr.

 

12,05,000

 

1,95,000

3,00,000

7,10,000

 

31 March

Provision for bad debts a/c

Creditors a/c

    To Realisation A/c

 (Being Liabilities transferred to realization account)

Dr

Dr.

 

5,000

2,00,000

 

 

2,05,000

31 March

Realisation a/c

    To Bank a/c

(Being Creditors and expenses Paid)

Dr.

 

2,04,000

 

2,04,000

31 March

Bank a/c

    To Realisation A/c

(Being various assets realised)

Dr.

 

11,49,000

 

11,49,000

31 March

A’s Capital a/c

B’s Capital a/c

C’s Capital a/c

    To Realisation A/c

(Being Loss on realization transferred to Capitals account)

Dr.

Dr.

Dr.

 

22,000

22,000

11,000

 

 

 

55,000

31 March

A’s Capital a/c

B’s Capital a/c

C’s Capital a/c

    To Bank A/c

(Being balance of capital paid to partners)

Dr.

Dr.

Dr.

 

7,28,000

2,78,000

2,39,000

 

 

 

12,45,000

 

Question 22:


Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2022, their Balance Sheet was as follows:

 

 

 

Liabilities

 ( `)

Assets

 ( `)

Capital A/cs:                       

 

Land and Building

4,00,000

Achal

 3,00,000

 

Machinery

 

3,00,000

Vichal

5,00,000

8,00,000

Debtor

 

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, 2022 and the Assets and Liabilities were settled as follows:
(a) Land and Building realised
 ` 4,30,000.
(b) Debtor 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. (AI 2012, Modified)

Answer:


Journal

Date

Particulars

L.F.

Debit

 ( `)

Credit

( `)

2022
Apr.1

 

Realisation A/c


Dr.

 


9,22,000

 

 

To Land & Building A/c

 

 

 

4,00,000

 

To Machinery A/c

 

 

 

3,00,000

 

To Debtor A/c

 

 

 

2,22,000

 

(Being assets transferred)

 

 

 

 

 

 

 

 

 

Apr.1

Creditors  A/c

Dr.

 

1,79,000

 

 

Employees’ Provident Fund A/c

Dr.

 

21,000

 

 

To Realisation A/c

 

 

 

2,00,000

 

(Being liabilities transferred)

 

 

 

 

 

 

 

 

 

 

Apr.1

Bank A/c

Dr.

 

4,30,000

 

 

To Realisation A/c

 

 

 

4,30,000

 

(Being Land & Building realised)

 

 

 

 

 

 

 

 

 

 

Apr.1

Bank A/c (2,25,000 + 1,000)

Dr.

 

2,26,000

 

 

To Realisation A/c

 

 

 

2,26,000

 

(Being Debtor realised along-with Bad-debts recovered)

 

 

 

 

 

 

 

 

 

 

Apr.1

Bank A/c

Dr.

 

25,000

 

 

To Realisation A/c

 

 

 

25,000

 

(Being Unrecorded Investments sold)

 

 

 

 

 

 

 

 

 

 

Apr.1

Bank A/c

Dr.

 

2,80,000

 

 

To Realisation A/c

 

 

 

2,80,000

 

(Being Machinery took over by Vichal for Cash)

 

 

 

 

 

 

 

 

 

 

Apr.1

Realisation A/c

Dr.

 

1,96,000

 

 

To Bank A/c (85,500 + 89,500 + 21,000)

 

 

 

1,96,000

 

(Being 50% Creditors  of  ` 89,500 were paid at a discount of  ` 4,000 and remaining 50% were settled in full and EPF)

 

 

 

 

 

 

 

 

 

 

Apr.1

Realisation A/c

Dr.

 

43,000

 

 

To Achal’s Capital A/c

 

 

 

16,125

 

To Vichal’s Capital A/c

 

 

 

26,875

 

(Being profits on realisation transferred)

 

 

 

 

 

 

 

 

 

 

Apr.1

Achal’s Capital A/c

Dr.

 

3,16,125

 

 

Vichal’s Capital A/c

Dr.

 

5,26,875

 

 

To Bank A/c

 

 

 

8,43,000

 

(Being Partners paid off)

 

 

 

 

 

 

 

 

 

 

 

Question 23:


Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2022 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

Debtor

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; Debtor  ` 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.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Building

45,000

Creditors

14,000

Machinery

15,000

Bank  A/c:

 

Furniture

12,000

Stock

22,000

 

Debtor

8,000

Debtor

7,500

 

Stock

24,000

Machinery

16,000

 

 

 

Building

35,000

80,500

Bank A/c:

 

 

 

Creditors

14,000

 

Bale’s Loan

500

Expenses

2,500

16,500

Yale’s Capital A/c (Furniture)

9,000

 

 

Loss transferred to:

 

 

 

Bale’s Capital A/c

8,250

 

 

 

Yale’s Capital A/c

8,250

16,500

 

1,20,500

 

1,20,500

 

 

 

 


Partners’ Capital Accounts

 

Dr.

 

Cr.

 

Particulars

Bale

Yale

Particulars

Bale

Yale

 

Realisation A/c (Loss)

8,250

8,250

Balance b/d

50,000

40,000

 

Realisation A/c

9,000

General Reserve       
(Old Ratio)   

4,000

4,000

 

Bank A/c

45,750

26,750

 

 

 

 

 

 

 

 

 

 

 

 

54,000

44,000

 

54,000

44,000

 

 

 

 

 

 

 

 

 

 

Bale’s Loan Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Bank A/c

2,500

Balance b/d

3,000

Realisation A/c

500

 

 

 

 

 

 

 

3,000

 

3,000

 

 

 

 

 

Bank Account 

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

11,000

Bale’s Loan

2,500

Realisation A/c

80,500

Realisation A/c

16,500

 

 

Bale’s Capital A/c

45,750

 

 

Yale’s Capital A/c

26,750

 

 

 

 

 

91,500

 

91,500

 

 

 

 

Question 24:


Shilpa, Meena and Nanda decided to dissolve their partnership on 31st March, 2022. 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, 2022

Liabilities

 `

Assets

 `

Capital A/cs:

 

Land

81,000

Shilpa

80,000

 

Stock

56,760

Meena

40,000

1,20,000

Debtor

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 Debtor amounting to  `10,000 realised  ` 8,000. Land is sold for  ` 1,10,000. The remaining Debtor 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.

Answer:


Realisation Account

 

Dr.

 

Cr.

 

Particulars

 ( `)

Particulars

 ( `)

Land

81,000

Bank Loan

20,000

Stock

56,760

Creditors

37000

Debtor

18,600

Provision for doubtful debts

1,200

Shilpa’s Capital A/c

20,000

Shilpa’s Capital A/c (Stock)

35,000

Cash:

 

Cash:

 

Creditors

31000

 

Stock

14000

 

Realisation Expenses

1,200

32200

Debtor

12300

Realisation Profit

 

Land

1,10,000

1,36,300

Shilpa’s Capital A/c

10,470

 

 

 

 

 

Meena’s Capital A/c

6,980

 

 

 

Nanda’s Capital A/c

3,490

20,940

 

 

 

2,29,500

 

2,29,500

 

 

 

 

 

Partners Capital Account

 

Dr.

 

Cr.

 

Particulars

Shilpa

Meena

Nanda

Particulars

Shilpa

Meena

Nanda

Balance b/d

23,000

Balance b/d

80,000

40,000

Realisation 

35,000

 

 

General Reserve

6,000

4,000

2,000

(Stock)

 

 

 

Realisation

20,000

 

 

Cash

81,470

50,980

 

(Bank Loan)

 

 

 

 

 

 

 

Realisation (Profit)

10,470

6,980

3,490

 

 

 

 

Cash

 

 

17,510

 

1,16,470

50,980

23,000

 

1,16,470

50,980

23,000

 

 

 

 

 

 

 

 

 

Cash Account

 

Dr.

 

Cr.

 

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

10,840

Realisation (Expenses)

32,200

Realisation (Assets)

1,36,300

Shilpa’s Capital A/c

81,470

Nanda’s Capital A/c

17,510

Meena’s Capital A/c

50,980

 

 

 

 

 

1,64,650

 

1,64,650

 

 

 

 

 

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