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12th | Dissolution of a Partnership Firm | Question No.  25 To 28 | Ts Grewal Solution 2022-2023

Question 25:


A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2022, their Balance Sheet was as follows:

BALANCE SHEET as at 31st March, 2022

Liabilities

( `)

Assets

( `)

Creditors

38,000

Cash at Bank

11,500

Mr. A's Loan

10,000

Stock

6,000

B's Loan

15,000

Debtor

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 Loss A/C

7,500

 

 

 

 

 

 

 

86,000

 

86,000

 

 

 

 

 


The firm was dissolved on 31st March, 2022 and both the partners agreed to the following:
(a) A took Investments at an agreed value of 
` 8,000. He also agreed to settle M `. A's Loan.
(b) Other assets realised as: Stock −
 ` 5,000; Debtor  −  ` 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.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

 

Stock

6,000

Creditors

38,000

 

Debtor

19,000

M `. A’s Loan

10,000

 

Furniture

4,000

 

 

 

Plant

28,000

A’s Capital A/c (Investments)

8,000

 

Investments

10,000

Bank A/c:

 

 

A’s Capital A/c

(M `. A’s loan)

10,000

Stock

5,000

 

 

Bank A/c :

 

Debtor

18,500

 

 

Expenses

1,600

 

Furniture

4,500

 

 

Creditors

37,000

38,600

Plant

25,000

53,000

 

 

 

Loss transferred to:

 

 

 

 

A’s Capital A/c

3,960

 

 

 

 

B’s Capital A/c

2,640

6,600

 

 

1,15,600

 

1,15,600

 

 

 

 

 

 

 

Partners Capital Accounts

 

Dr.

 

Cr.

 

Particulars

A

B

Particulars

A

B

 

Realisation (loss)

3,960

2,640

Balance b/d

10,000

8,000

 

Realisation A/c

8,000

Reserve A/c

3,000

2,000

 

Profit and Loss A/c

4,500

3,000

Realisation A/c   

10,000

 

Bank A/c

6,540

4,360

 

 

 

 

 

23,000

10,000

 

23,000

10,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B’s Loan Account    

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

 

 

Balance b/d

15,000

Bank A/c

15,000

 

 

 

15,000

 

15,000

 

 

 

 

 

Bank Account  

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

11,500

Realisation A/c

38,600

Realisation A/c

53,000

A’s Capital A/c

6,540

 

 

B’s Capital A/c

4,360

 

 

B’s Loan A/c

15,000

 

64,500

 

64,500

 

 

 

 

 

Question 26:


Balance Sheet of P, Q and R as at 31st March, 2022, who were sharing profits in the ratio of 5 : 3 : 1, was:
 

Liabilities

 ( `)

Assets

 ( `)

Bills Payable

40,000

Cash at Bank

40,000

Loan from Bank

30,000

Stock

19,000

General Reserve

9,000

Sundry Debtor

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; Debtor 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.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Building

40,000

Provision for Doubtful Debts

2,000

Plant and machinery

40,000

Bills Payable

40,000

Stock

19,000

Loan from Bank

30,000

Sundry Debtor

42,000

 

 

Bank A/c:

 

Bank A/c:

 

Bills Payable

32,000

 

Stock

23,400

 

Outstanding Bill

800

 

Debtor

21,000

 

Expenses

1,250

 

Building

36,000

 

  Loan from Bank    

30,000

64,050

Plant and Machinery

36,000

1,16,400

 

 

Loss transferred to:

 

 

 

P’s Capital A/c

9,250

 

 

 

Q’s Capital A/c

5,550

 

 

 

RCapital A/c

1,850

16,650

 

2,05,050

 

2,05,050

 

 

 

 

 

Partners Capital Accounts

Dr.

 

Cr.

Particulars

P

Q

R

Particulars

P

Q

R

Realisation A/c (Loss)

9,250

5,550

1,850

Balance b/d

44,000

36,000

20,000

 

 

 

 

Reserve Fund

5,000

3,000

1,000

Bank A/c

39,750

33,450

19,150

 

 

 

 

 

49,000

39,000

21,000

 

49,000

39,000

21,000

 

 

 

 

 

 

 

 

 

Bank  Account 

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

40,000

Realisation A/c

64,050

Realisation A/c

1,16,400

P’s Capital A/c

39,750

 

 

Q’s Capital A/c

33,450

 

 

R’s Capital A/c

19,150

 

1,56,400

 

1,56,400

 

 

 

 

 

Question 27:


Ashu and Harish are partners sharing profit and losses as 3 : 2 . They decided to dissolve the firm on 31st March, 2022. Their Balance Sheet on the above date was:

 

 

 

Liabilities

( `)

Assets

   ( `)

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

 

 

Debtor

 

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. Debtor realised for  ` 46,000, expenses of realisation amounted to  ` 3,000. Prepare necessary Ledger Accounts.

Answer:


Realisation Account

 

Dr.

 

Cr.

 

Particulars

 ( `)

Particulars

 ( `)

Building

80,000

Creditors

88,000

Machinery

70,000

Bank overdraft

50,000

Furniture

14,000

Ashu’s Capital A/c (see working note)

1,43,000

Stock

20,000

Harish’s Capital A/c (see working note)

1,12,000

Investments

60,000

Cash (Debtor)

46,000

Debtor

48,000

 

 

Ashu’s Capital A/c (Creditors )

88,000

 

 

Harish’s Capital A/c (Bank Overdraft)

50,000

 

 

Cash (Expenses)

3,000

 

 

Realisation Profit

 

 

 

Ashu’s Capital A/c

3,600

 

 

 

Harish’s Capital A/c

2,400

6,000

 

 

 

4,39,000

 

4,39,000

 

 

 

 

 

Partners Capital Account

 

Dr.

 

Cr.

 

Particulars

Ashu

Harish

Particulars

Ashu

Harish

Realisation (Assets taken)

1,43,000

1,12,000

Balance b/d

1,08,000

54,000

Cash

56,600

 

Realisation (Liabilities)

88,000

50,000

 

 

 

Realisation (Profit)

3,600

2,400

 

 

 

Cash

 

5,600

 

1,99,600

1,12,000

 

1,99,600

1,12,000

 

 

 

 

 

 

 

Cash Account

Dr.

 

 

Cr.

Particulars

 ( `)

Particulars

( `)

Balance b/d

8,000

Realisation (Expenses)

3,000

Realisation (Debtor)

46,000

Ashu’s Capital A/c

56,600

Harish’s Capital A/c

5,600

 

 

 

59,600

 

59,600

 

 

 

 


Working Notes :
 

 

Ashu

Harish

Building

95,000

 

Machinery and Furniture

 

80,000

Stock (3:2)

12,000

8,000

Investment (3:2)

36,000

24,000

 

1,43,000

1,12,000

 

 

 

 

Question 28:


A, B and C were equal partners. On 31st March, 2022, their Balance Sheet stood as:

 

 

Liabilities

( `)

Assets

( `)

Creditors

50,400

Cash

3,700

Reserve

12,000

Stock

20,100

Capital A/cs:

 

Debtor

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 Debtor 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.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Stock

20,100

Creditors

50,400

Debtor

62,600

 

 

Investments                              

16,000

A’s Capital A/c (Investments)

18,000

Furniture

6,500

Cash A/c:

 

Building

23,500

Furniture and Building

29,700

 

Cash A/c:

 

Stock and Debtor

80,000

1,09,700

Expenses

1,300

 

 

 

Creditors

49,600

 

 

 

Bills

1,500

52,400

Loss transferred to :

 

 

 

A’s Capital A/c

1,000

 

 

 

B’s Capital A/c

1,000

 

 

 

C’s Capital A/c

1,000

3,000

 

 

 

 

 

1,81,100

 

1,81,100

 

 

 

 

 

Partners Capital Accounts

Dr.

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

Realisation A/c (Investment)

18,000

Balance b/d      

40,000

25,000

15,000

Realisation A/c
(Loss)

1,000

1,000

1,000

Reserve

4,000

4,000

4,000

Cash A/c

25,000

28,000

18,000

 

 

 

 

 

44,000

29,000

19,000

 

44,000

29,000

19,000

 

 

 

 

 

 

 

 

 

A’s Loan A/c

Dr.

Cr.

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

10,000

Bank A/c

10,000

 

 

 

 

 

10,000

 

10,000

 

 

 

 

 Cash  Account  

Dr.

 

Cr.

particulars

 ( `)

Particulars

 ( `)

Balance b/d

3,700

Realisation A/c

52,400

Realisation A/c

1,09,700

A’s Capital A/c

25,000

A's Loan A/c

10,000

B’s Capital A/c

28,000

 

 

C’s Capital A/c

18,000

 

1,23,400

 

1,23,400

 

 

 

 

 

Ts Grewal Solution 2022-2023

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