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12th | Dissolution of a Partnership Firm | Question No.  33 To 36 | Ts Grewal Solution 2022-2023

Question 33:


Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2022, the Balance Sheet of the firm was:

 

 

 

Liabilities

( `)

Assets

( `)

Sundry Creditors

75,000

Cash

6,000

Bills Payable

30,000

Bank

30,000

Rita's Loan

15,000

Stock

75,000

Reserve      

24,000

Book Debts

66,000

 

Capital A/cs:    

 

Less: Provision for Doubtful Debts

6,000

60,000

Rita

90,000

 

 

 

 

Sobha

30,000

1,20,000

Plant and Machinery

 

45,000

 

 

Land and Building

48,000

 

 

 

 

 

 

2,64,000

 

2,64,000

 

 

 

 


The firm was dissolved on the date given above. The following transactions took place:
(a) Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realised 
` 54,000; balance of the Stock was sold at a profit of 30% on cost.
(c) Sundry Creditors  were paid out at a discount of 10%. Bills Payable were paid in full .
(d) Plant and Machinery realised 
` 75,000. Land and Building  ` 1,20,000.
(e) Rita took the goodwill of the firm at a value of 
` 30,000.
(f) An unrecorded asset of 
` 6,900 was handed over to an unrecorded liability of  ` 6,000 in full settlement.
(g) Realisation expenses were 
` 5,250.
Show Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Stock

75,000

Provision for Doubtful Debts

6,000

Book Debts

66,000

Sundry Creditors

75,000

Plant and Machinery

45,000

Bills Payable

30,000

Land and building

48,000

 

 

 

 

Rita’s Capital A/c

30,000

 

 

(Goodwill taken over)

 

Bank A/c:

 

Rita’s Loan A/c (Stock taken over)

15,000

Sundry Creditors

67,500

 

 

 

Bills Payable

30,000

 

Bank A/c:

 

Expenses

5,250

1,02,750

Book Debts

54,000

 

Profit transferred to:

 

Stock

73,125

 

Rita’s Capital A/c

70,688

 

Plant and Machinery

75,000

 

Sobha’s Capital A/c

70,687

1,41,375

Land and Building

1,20,000

3,22,125

 

4,78,125

 

4,78,125

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partners Capital Accounts

Dr.

 

Cr.

Particulars

Rita

( `)

Sobha

( `)

Particulars

Rita

( `)

Sobha

( `)

Realisation A/c (Assets)

30,000

Balance b/d

90,000

30,000

 

 

 

Reserve Fund

12,000

12,000

Bank A/c

1,42,688

1,12,687

Realisation A/c (Profit)

70,688

70,687

 

 

 

 

 

 

 

1,72,688

1,12,687

 

1,72,688

1,12,687

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rita’s Loan A/c

Dr.

Cr.

Particulars

 ( `)

Particulars

 ( `)

To Realisation A/c

15,000

Balance b/d

15,000

 

 

 

 

 

15,000

 

15,000

 

 

 

 

 

 

 

 

 

Bank Account

Dr.

 

Cr.

Particulars

 ( `)

Particulars

 ( `)

Balance b/d

30,000

Realisation A/c

1,02,750

Cash A/c

6,000

Rita’s Capital A/c

1,42,688

Realisation A/c

3,22,125

Sobha’s Capital A/c

1,12,687

 

 

 

 

 

3,58,125

 

3,58,125

 

 

 

 

Working Notes:

WN1: Value of Stock Taken Over by Rita

Stock taken over by Rita=Book Value of Stock×25100×80100                       

[Since stock is taken over at a discount of 20%]Stock taken over by Rita=75,000×25100×80100=15,000

WN2: Value of Stock Sold

Book Value of Balance of Stock Sold=Value of Stock - Stock Taken over by RitaBook Value of Balance of Stock Sold

=(75,000 - 18,750)= 56,250

Value of Stock Sold=56,250×130100=73,125  [Sold at 30% Profit]

Question 34:


Mala, B 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, 2022 was:

Liabilities

( `)

Assets

( `)

Capital A/cs:

 

Building

20,000

 Mala

12,410

 

Plant

31,220

 Neela

8,650

 

Goodwill

10,000

 Kala

80,620

1,01,680

100 Shares in X Ltd. (At cost)

2,400

Creditors

 

11,210

1,000 Shares in Y Ltd. (At cost)

10,000

Reserve for Depreciation on Plant

 

20,000

Stock

11,240

 

 

 

Debtor

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, 2022 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 Debto
r at book value, the Patents at  ` 30,000 and Plant at  ` 5,000. He was also to pay the Creditors .
(c) Kala to take over shares in X Ltd. at 
` 15 each.
(d) The shares in Y Ltd. to be divided in the profit-sharing ratio.
Show Ledger Accounts recording the dissolution in the books of the firm.

Answer:


Realisation Account

Dr.

 

Cr.

Particulars

`

Particulars

`

Building

20,000

Creditors

11,210

Plant

31,220

Reserve for Depreciation on Plant

20,000

Good will

10,000

Mala’s Capital A/c:

 

100 Shares in X Ltd.

2,400

Building

31,500

 

1,000 Shares in Y Ltd.

10,000

Shares of Y Ltd.

7,000

38,500

Stock

11,240

Neela’s Capital A/c:

 

Debtor

8,740

Good will

10,000

 

Patents

38,080

Stock

11,240

 

Neela’s Capital A/c

(Creditors )

11,210

Debtor

8,740

 

 

 

Patents

30,000

 

 

 

Plant

5,000

 

 

 

Shares of Y Ltd.

2,000

66,980

 

 

Kala’s Capital:

 

 

 

Shares of X Ltd.

1,500

 

 

 

Shares of Y Ltd.

1,000

2,500

 

 

Loss transferred to:

 

 

 

Mala’s Capital A/c

2,590

 

 

 

Neela’s Capital A/c

740

 

 

 

Kala’s Capital A/c

370

3,700

 

 

 

 

 

1,42,890

 

1,42,890

 

 

 

 

 

Partners Capital Accounts

Dr.

 

Cr.

Particulars

Mala

Neela

Kala

Particulars

Mala

Neela

Kala

Realisation A/c (Assets)

38,500

66,980

2,500

Balance b/d

12,410

8,650

80,620

Realisation A/c (Loss)

2,590

740

370

Realisation A/c (Creditors )

11,210

Bank A/c

77,750

Bank A/c

28,680

47,860

 

 

 

 

 

 

 

 

 

 

41,090

67,720

80,620

 

41,090

67,720

80,620

 

 

 

 

 

 

 

 

 

Bank Account 

Dr.

 

Cr.

Particulars

Amount

 `

Particulars

Amount

 `

Balance b/d

1,210

Kala’s Capital A/c

77,750

Mala’s Capital A/c

28,680

 

 

Neela’s Capital A/c

47,860

 

 

 

77,750

 

77,750

 

 

 

 


Working Notes:

Distribution of Shares in Y Ltd.

Distribution of shares in Y Ltd. among the partners:

Mala's Share = 10,000×7/10= `.7,000

Neela's Share = 10,000×2/10= `.2,000

Kala's Share = 10,000×1/10= `.1,000

 

Question 35:


Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st, March, 2017 their Balance Sheet was as follows:
 

BALANCE SHEET OF SRIJAN, RAMAN AND MANAN as on 31st March, 2017

Liabilities

( `)

Assets

( `)

Capitals:

 

Capital: Manan

10,000

Srijan

2,00,000

 

Plant

2,20,000

Raman

1,50,000

3,50,000

Investments

70,000

Creditors

 

75,000

Stock

50,000

Bills Payable

 

40,000

Debtor

60,000

Outstanding Salary

 

35,000

Bank

10,000

 

 

 

Profit and Loss Account

80,000

 

 

5,00,000

 

5,00,000

 

 

 

 

 


On the above date they decided to dissolve the firm.
(a) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.
(b)

Assets were realised as follows:

 `

Plant

85,000

Stock

33,000

Debtor

47,000


(c) Investments were realised at 95% of the book value.
(d) The firm had to pay 
` 7,500 for an outstanding repair bill not provided for earlier.
(e) A contingent liabillity in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for 
` 15,000.
(f) Expenses of realisation amounting to 
` 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Answer:


Dr.

Realisation A/c

Cr.

Particulars

 ( `)

Particulars

 ( `)

To Plant

2,20,000

By Creditors

75,000

To Investments

70,000

By Bills Payable

40,000

To Stock

50,000

By Outstanding Salary

35,000

To Debtor

60,000

 

 

 

 

 

 

To Srijan’s Capital A/c (Commission)

11,575

By Bank A/c:

 

To Bank A/c:

 

 Investments

66,500

 

  Outstanding Bill Repair

7,500

 

  Plant

85,000

 

  Contingent liability against bills payable

15,000

 

  Stock

33,000

 

  Creditors

75,000

 

  Debtor

47,000

2,31,500

  Bills Payable

40,000

 

 

 

  Outstanding Salary

35,000

1,72,500

By Loss on Realisation transferred to:     

 

 

 

  Srijan’s Capital A/c

81,030

 

 

 

  Raman’s Capital A/c

81,030

 

 

 

  Manan’s Capital A/c

40,515

2,02,575

 

 

 

 

 

5,84,075

 

5,84,075

 

 

 

 

    

Dr.

Partner’s Capital A/c

Cr.

Particulars

Srijan

( `)

Raman

( `)

Manan

( `)

Particulars

Srijan

( `)

Raman

( `)

Manan

( `)

To balance b/d

 

 

10,000

By balance b/d

2,00,000

1,50,000

 

To Realisation A/c (Loss)

81,030

81,030

40,515

By Realisation A/c (Commission)

11,575

 

 

To Profit & Loss A/c

32,000

32,000

16,000

 

 

 

 

To Bank A/c (Final Payment)

98,545

36,970

By Bank A/c

 

 

66,515

 

 

 

 

 

 

 

 

 

2,11,575

1,50,000

66,515

 

2,11,575

1,50,000

66,515

 

 

 

 

 

 

 

 

 

Dr.

Bank A/c

Cr.

Particulars

 ( `)

Particulars

 ( `)

To balance b/d

10,000

By Srijan’s Capital A/c

98,545

To Realisation A/c (Asset Realised)

2,31,500

By Raman’s Capital A/c

36,970

To Manan’s Capital A/c

66,515

By Realisation A/c (Liabilities Paid)

1,72,500

 

 

 

 

 

3,08,015

 

3,08,015

 

 

 

 

 

Question 36:


There are two partners X and Y in a firm and their capitals are  ` 50,000 and  ` 40,000. The Creditors  are  ` 30,000. The assets of the firm realise  ` 1,00,000. How much will X and Y receive?

Answer:


Realisation Account   

Dr.

 

Cr.

Particulars

`

Particulars

`

Sundry Assets (WN)     

1,20,000

Creditors

30,000

Cash A/c

30,000

Cash A/c

1,00,000

 

 

Loss transferred to:

 

 

 

X’s Capital A/c

10,000

 

 

 

Y’s Capital A/c

10,000

20,000

 

1,50,000

 

1,50,000

 

 

 

 

 

Partners Capital Accounts

Dr.

 

Cr.

Particulars

X

Y

Particulars

X

Y

Realisation A/c (Loss)

10,000

10,000

Balance b/d

50,000

40,000

Cash A/c

40,000

30,000

 

 

 

 

 

 

 

 

 

 

50,000

40,000

 

50,000

40,000

 

 

 

 

 

 

 

Cash Account   

 

Dr.

 

Cr.

 

Particulars

Amount

 `

Particulars

Amount

 `

 

Realisation A/c

1,00,000

Realisation A/c

30,000

 

 

 

X’s Capital A/c

40,000

 

 

 

Y’s Capital A/c

30,000

 

 

 

 

 

 

 

1,00,000

 

1,00,000

 

 

 

 

 

 


Working Note: 

Memorandum Balance Sheet

Liabilities 

`

Assets 

`

Capital A/c

 

Sundry Assets

1,20,000

X

50,000

 

(Balancing Figure)

 

Y

40,000

90,000

 

 

Creditors

30,000

 

 

 

 

 

 

 

1,20,000

 

1,20,000

 

 

 

 

 

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