12th | Dissolution of a Partnership Firm | Question No. 37 To 40 | Ts Grewal Solution 2022-2023

Question 37:

A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2022, A's Capital and B's Capital were ` 30,000 and ` 20,000 respectively but C owed ` 5,000 to the firm. The liabilities were ` 20,000. The assets of the firm realised ` 50,000.
Prepare Realisation Account, Partner's Capital Accounts and Bank Account.

Answer:

Realisation Account
Dr.			Cr.
Particulars	`	Particulars			`
Sundry Assets (WN)	65,000	Creditors			20,000
Cash A/c (Creditors )	20,000	Cash A/c (Assets realised)			50,000
		Loss transferred to:
		A’s Capital A/c		7,500
		B’s Capital A/c		4,500
		C’s Capital A/c		3,000	15,000
	85,000				85,000

Partners Capital Accounts
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B		C
Balance b/d	–	–	5,000	Balance b/d	30,000	20,000		–
Realisation A/c (Loss)	7,500	4,500	3,000	Cash A/c	–	–		8,000
Cash A/c	22,500	15,500	–

	30,000	20,000	8,000		30,000	20,000		8,000

Cash Account
Dr.			Cr.
Particulars	`	Particulars		`
Realisation A/c (Assets)	50,000	Realisation A/c (Creditors )		20,000
C’s Capital A/c	8,000	A’s Capital A/c		22,500
		B’s Capital A/c		15,500

	58,000			58,000

Working Note:

Memorandum Balance Sheet as on March 31, 2022
Liabilities		`	Assets	`
Capital A/c			C’s Capital A/c	5,000
A	30,000		Sundry Assets	65,000
B	20,000	50,000	(Balancing Figure)
Other liabilities		20,000
		70,000		70,000

Question 38:

A and B were partners sharing profits and losses as to 7/11th to A and 4/11th to B. They dissolved the partnership on 30th May, 2021. As on that date their capitals were: A ` 7,000 and B ` 4,000. There were also due on Loan A/c to A ` 4,500 and to B ` 750. The other liabilities amounted to ` 5,000. The assets proved to have been undervalued in the last Balance Sheet and actually realised ` 24,000.
Prepare necessary accounts showing the final settlement between partners.

Answer:

Realisation Account
Dr.				Cr.
Particulars		`	Particulars	`
Sundry Assets (WN)		21,250	Other liabilities	5,000
Cash A/c (Liabilities)		5,000	Cash A/c (Assets Realised)	24,000
Profit transferred to:
A’s Capital A/c	1,750
B’s Capital A/c	1,000	2,750

		29,000		29,000

Partners Capital Accounts
Dr.				Cr.
Particulars	A	B	Particulars		A	B
Cash A/c	8,750	5,000	Balance b/d		7,000	4,000
			Realisation A/c (Profit)		1,750	1,000
	8,750	5,000			8,750	5,000

Partners Loan Accounts

Dr.

Cr.

Particulars

Cash A/c

4,500

750

Balance b/d

4,500

750

4,500

750

4,500

750

Cash Account

Dr.

Cr.

Particulars

Realisation A/c (Assets)

24,000

A’s Capital A/c

8,750

B’s Capital A/c

5,000

A’s Loan A/c

4,500

B’s Loan A/c

750

Realisation A/c

5,000

24,000

Working Note:

Memorandum Balance Sheet as on May 30, 2021
Liabilities		`	Assets	`
Capital A/cs:			Sundry Assets	21,250
A	7,000		(Balancing Figure)
B	4,000	11,000
A’s Loan		4,500
B’s Loan		750
Other Liabilities		5,000

		21,250		21,250

Question 39:

A, B and C started business on 1st April, 2021 with capitals of ` 1,00,000; ` 80,000 and ` 60,000 respectively sharing profits (losses) in the ratio of 4 : 3 : 3. For the year ended 31st March, 2022, the firm suffered a loss of ` 50,000. Each of the partners withdrew ` 10,000 during the year.
On 31st March, 2022, the firm was dissolved, the Creditors of the firm stood at ` 24,000 on that date and Cash in Hand was ` 4,000. The assets realised ` 3,00,000 and Creditors were paid ` 23,500 in full settlement of their claims.
Prepare Realisation Account and show your workings clearly.

Answer:

Realisation Account

Dr.

Cr.

Particulars

( `)

Particulars

( `)

Sundry Assets (WN 2)

1,80,000

Sundry Creditors

24,000

Cash A/c (Creditors )

23,500

Cash A/c (Assets)

3,00,000

Profit transferred to:

A’s Capital A/c

48,200

B’s Capital A/c

36,150

C’s Capital A/c

36,150

1,20,500

3,24,000

Partners Capital Accounts

Dr.

Cr.

Particulars

Balance b/d

70,000

55,000

35,000

Cash A/c

1,18,200

91,150

71,150

Realisation A/c

48,200

36,150

1,18,200

91,150

71,150

1,18,200

91,150

71,150

Cash Account
Dr.				Cr.
Particulars	( `)	Particulars	( `)
Balance b/d	4,000	Realisation A/c	23,500
Realisation A/c	3,00,000	A’s Capital A/c	1,18,200
		B’s Capital A/c	91,150
		C’s Capital A/c	71,150

	3,04,000		3,04,000

Working Notes:

WN 1 Calculation of Partners Capital as on April 01, 2022

Particulars	X	Y	Z
Capital as on April 01, 2021	1,00,000	80,000	60,000
Less: Drawings	(10,000)	(10,000)	(10,000)
Less: Share of Loss (4 : 3 : 3)	(20,000)	(15,000)	(15,000)
Capital as on April 01, 2022	70,000	55,000	35,000

WN 2

Memorandum Balance Sheet as on March 31, 2022
Liabilities	( `)	Assets	( `)
Capital A/cs:		Cash in Hand	4,000
A	70,000	Sundry Assets	1,80,000
B	55,000	(Balancing figure)
C	35,000
Creditors	24,000

	1,84,000		1,84,000

Question 40:

A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ` 5,000) amounted to ` 88,000, assets realised ` 80,000 (including an unrecorded asset which realised ` 4,000). A contingent liability on account of bills discounted ` 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ` 20,000 each.
Prepare Realisation Account, Partners' Capital Accounts and Cash Account.

Answer:

Realisation Account

Dr.

Cr.

Particulars

Sundry Assets

83,000

Sundry Liabilities (WN )

28,000

Cash A/c (Assets realised)

80,000

Cash A/c:

Loss transferred to:

Sundry Liabilities

28,000

A’s Capital A/c

5,500

Contingent Liabilities

8,000

36,000

B’s Capital A/c

2,750

C’s Capital A/c

2,750

11,000

1,19,000

Partners Capital Accounts

Dr.

Cr.

Particulars

Realisation A/c (Loss)

5,500

2,750

Balance b/d

20,000

Bank A/c

14,500

17,250

20,000

Cash Account
Dr.				Cr.
Particulars	`	Particulars	`
Balance b/d	5,000	Realisation A/c	36,000
Realisation A/c	80,000	A’s Capital A/c	14,500
		B’s Capital A/c	17,250
		C’s Capital A/c	17,250

	85,000		85,000

Working Notes:

Memorandum Balance Sheet
Liabilities		`	Assets	`
Capital A/cs:			Cash in Hand	5,000
A	20,000		Sundry Assets	83,000
B	20,000
C	20,000	60,000
Sundry Liabilities		28,000
(Balancing figure)
		88,000		88,000