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12th | Dissolution of a partnership firm | Question No. 25 To 28 | Ts Grewal Solution 2023-2024

Question 25: 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 26:  Mala, Neela and Kala were in partnership sharing profits in the ratio of 7:2:1 and the Balance Sheet of the firm as at 31st March, 2023 was:


Balance Sheet

Liabilities

`

Assets

`

Capital Aes:

 

Building

20,000

Mala -12,410

 

Plant

31,220

Neela -8,650

 

Goodwill

10,000

Kala -80,620

1,01,680

Software

12,400

Creditors

11,210

Stock

11,240

Reserve for Depreciation on Plant

20,000

Debtors

8,740

 

 

Bank

1,210

 

 

Patents

38,080

 

1,32,890

 

1,32,890

It was agreed to dissolve the partnership as on 31st March, 2023 and the terms of dissolution were-

(a) Mala to take over the Building at an agreed amount of ` 31,500.

(b) Neela, who was to carry on the business, to take over the Goodwill, Stock and Debtors at book value. The Patents at ` 30,000 and Plant at ` 5,000. He was also to pay the Credito`

Show Ledger Accounts recording the dissolution in the books of the firm.

Answer:


Realisation A/c

Particulars

`

Particulars

`

To Building

20,000

By Creditors

11,210

To Plant

31,220

By Reserve for Depreciation on Plant

20,000

To Goodwill

10,000

By Mala’s capital A/c

31,500

To Software

12,400

(Took over building)

 

To Stock

11,240

By Neela’s capital A/c

 

To Debtors

8,740

Goodwill - 10,000

 

To Patents

38,080

Stock - 11,240

 

To Neela’s capital A/c

11,210

Debtors - 8,740

 

(Creditors taken over)

 

Patents - 30,000

 

 

 

Plant - 5,000

64,980

 

 

By Loss

 

 

 

Mala’s Cap –10,640

 

 

 

Neela’s Cap – 3,040

 

 

 

Kala’s Cap – 1,520

15,200

 

1,42,890

 

1,42,890

 

Capital A/c

Particulars

Mala

Neela

Kala

Particulars

Mala

Neela

Kala

To Realisation A/c

(Assets taken over)

31,500

 

 

By Balance B/d

12,410

8,650

80,620

To Realisation A/c

(Assets taken over)

 

64,980

 

By Realisation A/c

 

11,210

 

To Realisation A/c

(Loss)

10,640

3,040

1,520

 

 

 

 

To Bank A/c

 

 

79,100

By Bank A/c

29,730

48,160

 

 

42,140

68,020

80,620

 

42,140

68,020

80,620

 

Bank A/c

Particulars

`

Particulars

`

To Balance B/d

1,210

By Kala’s Capital A/c

79,100

To Mala’s Capital A/c

29,730

 

 

To Neela’s Capital A/c

48,160

 

 

 

 

 

 

 

79,100

 

79,100

 

Question 27:  Mike and Ajay are partners sharing profits and losses in ratio of the capitals. They decided to dissolve their firm on 31st March, 2022, the date on which the Balance Sheet stood as under:


Balance Sheet

Liabilities

`

Assets

`

Capital A/cs:

 

Sundry Assets

16,30,000

Mike - 6,00,000

 

Cash

70,000

Ajay - 4,00,000

10,00,000

 

 

Workmen Compensation Reserve

1,00,000

 

 

Creditors

2,00,000

 

 

Bills Payable

60,000

 

 

Others

3,40,000

 

 

 

 

 

 

 

17,00,000

 

17,00,000

Following additional information is given:

Sundry assets realised `14,00,000 and the liabilities were discharged as follows:

(i) Creditors due on 31st May, 2022, were paid at a discount of 3% per annum.

(ii) Bills Payable were discharged at a rebate of `1,000.

(iii) Workmen Compensation Claim of `40,000 was met.

(iv) Expenses of dissolution amounting to `30,000 were paid.

You are required to prepare:

(a) Realisation Account.

(b) Partners' Capital Accounts.

Answer:


Realisation A/c

Particulars

`

Particulars

`

To Sundry Assets

16,30,000

By Creditors A/c

2,00,000

To Bank A/c

 

By Bills Payable A/c

60,000

Creditors - 1,99,000

 

By Others A/c

3,40,000

Bills Payable – 59,000

 

By Bank A/c

14,00,000

Other – 3,40,000

5,98,000

(Sundry assets realized)

 

To Bank A/c (Exp.)

30,000

By Loss transferred to capital A/cs;

2,58,000

 

 

Mike – 1,54,800

 

 

 

Ajay – 1,03,200

 

 

 

 

 

 

22,58,000

 

22,58,000

 

Capital A/c

Particulars

Mike

Ajay

Particulars

Mike

Ajay

To Realisation A/c (Loss)

1,54,800

1,03,200

By Balance B/d

6,00,000

4,00,000

To Bank A/c

4,81,200

3,20,800

By Workmen Compensation Reserve A/c

36,000

24,000

 

 

 

By Bank A/c

 

 

 

 

 

 

 

 

 

6,36,000

4,24,000

 

6,36,000

4,24,000

 

Question 28:


 

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)

 

 

 

 

 

 

 

 

 

 

 

 

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