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12th | Dissolution of a partnership firm | Question No. 37 To 40 | Ts Grewal Solution 2023-2024

Question 37:


Yogesh and Naresh were partners sharing profits equally. They dissolved the firm on 1st April, 2022. Naresh was assigned the responsibility to realise the assets and pay the liabilities at a remuneration of  `10,000 including expenses. Balance Sheet of the firm as on that date was as follows:

Liabilities

 (`)

Assets

 (`)

Creditors

40,000

Cash/Bank

6,000

Bills Payable

40,000

Investments

30,000

Naresh's Loan

44,000

Debtor

40,000

 

M `. Yogesh's Loan

42,000

Less: Provision for Doubtful Debts

4,000

36,000

Investment Fluctuation Reserve

 

8,000

Bills Receivable

33,400

Capital A/cs:

 

 

Profit and Loss A/c

1,10,600

Yogesh

21,000

 

 

 

Naresh

21,000

42,000

 

 

 

 

 

 

 

 

2,16,000

 

2,16,000

 

 

 

 

 

The firm was dissolved on following terms:
(a) Yogesh was to pay his wife's loan.
(b) Debtor realised 
`30,000.
(c) Naresh was to take investments at an agreed value of  ` 26,000.
(d) Creditors  and Bills Payable were payable after two months but were paid immediately at a discount of 15% p.a.
(e) Bills Receivable were received allowing 5% rebate.
(f) A Debtor previously written off as Bad Debt paid 
`15,000.
(g) An unrecorded asset realised 
`10,000.
Prepare Realisation Account, Partners' Capital Accounts, Partners' Loan Account and Cash/Bank Account.

Answer:


Dr.

Realisation A/c

Cr.

Particulars

 (`)

Particulars

 (`)

To Investments

30,000

By Investment Fluctuation Reserve

8,000

To Debtor

40,000

By Provision for Doubtful Debts

4,000

To Bills Receivable

33,400

By Creditors

40,000

 

 

By Bills Payable

40,000

To Yogesh’s Capital A/c (Wife’s Loan)

42,000

By M `. Yogesh’s Loan

42,000

To Cash/Bank A/c:

 

 

 

Creditors  [40,000 – (40,000 × 15/100 × 2/12)]

39,000

 

By Cash/Bank A/c:

 

Bills Payable [40,000 – (40,000 × 15/100 × 2/12)]

39,000

78,000

  Debtor

30,000

 

 

 

  Bills Receivable

31,730

 

To Naresh’ Capital A/c (Commission)

10,000

  Bad Debt Recovered

15,000

 

To Realisation Gain transferred to:

 

  Unrecorded Asset

10,000

86,730

    Yogesh’s Capital A/c

6,665

 

 

 

    Naresh’s Capital A/c

6,665

13,330

By Naresh’s Capital A/c (Investment taken over)

26,000

 

 

 

 

 

2,46,730

 

2,46,730

 

 

 

 

       

Dr.

Partner’s Capital A/c

Cr.

Particulars

Yogesh

(`)

Naresh

(`)

Particulars

Yogesh

(`)

Naresh

(`)

To Realisation A/ c (Asset taken over)

 

26,000

By balance b/d

21,000

21,000

 

 

 

By Realisation A/c (Gain)

6,665

6,665

To Profit & Loss A/c

55,300

55,300

By Realisation A/c (Liability paid)

42,000

 

To Cash/Bank A/c

14,365

 

 

 

 

 

 

By Realisation A/c (Commission)

 

10,000

 

 

 

By Naresh’s Loan A/c

 

43,635

 

 

 

 

 

 

 

69,665

81,300

 

69,665

81,300

 

 

 

 

 

 

 

Dr.

Naresh’s Loan A/c

Cr.

Particulars

 (`)

Particulars

 (`)

To Naresh’s Capital A/c

43,635

By balance b/d

44,000

To Cash/Bank A/c

365

 

 

 

 

 

 

 

44,000

 

44,000

 

 

 

 

 

Dr.

Cash/ Bank A/c

Cr.

Particulars

 (`)

Particulars

 (`)

To balance b/d

6,000

By Yogesh’s Capital A/c

14,365

To Realisation A/c (Asset Realised)

86,730

By Naresh’s Loan A/c

365

 

 

By Realisation A/c (Liabilities Paid)

78,000

 

 

 

 

 

92,730

 

92,730

 

 

 

 

 

Question 38:


Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the 31st March, 2022 when the Balance Sheet of the firm as under:

 

 

 

Liabilities

(`)

Assets

(`)

Sundry Creditors      

20,000

Bank

7,500

Bills Payable

25,500

Sundry Debtor

58,000

Babu's Loan         

30,000

Stock

 

39,500

Capital A/cs:

 

Machinery

48,000

Ashok

70,000

 

Investments

 

42,000

Babu

55,000

 

Freehold Property

 

50,500

Chetan

27,000

1,52,000

 

 

 

Current A/cs:        

       

 

 

 

 

Ashok

10,000

 

 

 

 

Babu

5,000

 

 

 

 

Chetan

3,000

18,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,45,500

 

2,45,500

 

 

 

 


The Machinery was taken over by Babu for  ` 45,000, Ashok took over the Investments for 
` 40,000 and Freehold property took over by Chetan at  ` 55,000. The remaining Assets realised as follows:
Sundry Debtor 
` 56,500 and Stock  ` 36,500. Sundry Creditors  were settled at discount of 7%. A Office computer, not shown in the books of accounts realised  ` 9,000. Realisation expenses amounted to  ` 3,000.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Answer:


Realisation Account

Dr.

 

Cr.

 

Particulars

 (`)

Particulars

 (`)

Sundry Debtor

58,000

Sundry Creditors

20,000

Stock

39,500

Bills Payable

25,500

Machinery

48,000

Ashok’s Current A/c (Investment)

40,000

Investment

42,000

Babu’s Current A/c (Machinery)

45,000

Freehold property

50,500

Chetan’s Current A/c

55,000

Bank:

 

(Freehold property)

 

Sundry Creditors

18,600

 

Bank:

 

Bills Payable

25,500

 

  Sundry Debtor

56,500

 

Expenses

3,000

47,100

  Stock

36,500

 

Realisation Profit

 

  Unrecorded Computer

9,000

1,02,000

Ashok’s Current A/c

1,200

 

 

 

 

Babu’s Current A/c

800

 

 

 

 

Chetan’s Current A/c

400

2,400

 

 

 

 

 

 

 

 

 

 

2,87,500

 

2,87,500

 

 

 

 

 

 

Partners' Current Account

 

Dr.

 

Cr.

 

Particulars

Ashok

Babu

Chetan

Particulars

Ashok

Babu

Chetan

Realisation

40,000

45,000

55,000

Balance b/d

10,000

5,000

3,000

(Assets taken)

 

 

 

Realisation (Profit)

1,200

800

400

 

 

 

 

Ashok's Capital A/c

28,800

 

 

 

 

 

 

Babu's Capital A/c

 

39200

 

 

 

 

 

Chetan's Capital A/c

 

 

51600

 

40,000

45,000

55,000

 

40,000

45,000

55,000

 

 

 

 

 

 

 

 

 

Partners' Capital Account

Dr.

 

Cr.

Particulars

Ashok

Babu

Chetan

Particulars

Ashok

Babu

Chetan

Ashok's Current A/c

28,800

 

 

Balance b/d

70,000

55,000

27,000

Babu's Current A/c

 

39200

 

Bank A/c

 

 

24,600

Chetan's Current A/c

 

 

51600

 

 

 

 

Bank A/c

41,200

15,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,000

55,000

51,600

 

70,000

55,000

51,600

 

 

 

 

 

 

 

 

 

Babu’s Loan A/c

Dr.

 

Cr.

Particulars

 (`)

Particulars

 (`)

Bank A/c

30,000

Balance b/d

30,000

 

 

 

 

 

30,000

 

30,000

 

 

 

 

 

Bank Account

 

Dr.

 

Cr.

Particulars

 (`)

Particulars

 (`)

Balance b/d

7,500

Realisation A/c (Payment of Expenses& Liabilities)

47,100

Realisation A/c (Assets realised)

102,000

and Liabilities)

 

Chetan’s Capital A/c

24,600

Babu’s Loan

30,000

 

 

Ashok’s Capital A/c

41,200

 

 

Babu’s Capital A/c

15,800

 

 

 

 

 

1,34,100

 

1,34,100

 

 

 

 

 

Question 39:


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

25,000

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

 

 

Loan to Shobha

 

10,000 

 

2,74,000

 

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) 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

 (`)

To Stock

75,000

By Provision for Doubtful Debts

6,000

To Book Debts

66,000

By Sundry Creditors

75,000

To Plant and Machinery

45,000

By Bills Payable

30,000

To Land and building

48,000

 

 

 

 

By Rita’s Capital A/c

30,000

 

 

(Goodwill taken over)

 

To Bank A/c:

 

By Rita’s Capital A/c

15,000

 

 

(Stock taken over)

 

Sundry Creditors

67,500

 

By Rita’s Capital A/c

10,000 

 

 

 

(Gain)

 

Bills Payable

30,000

 

By Bank A/c:

 

Expenses

5,250

1,02,750

Stock

56,250

 

 

 

 

Book Debts

54,000

 

To Profit transferred to:

 

Plant and Machinery

45,000

 

Rita’s Capital A/c

52,250

 

Land and Building

1,20,000

2,45,250

Sobha’s Capital A/c

52,250

1,04,500

 

 

 

 

4,41,250

 

4,41,250

 

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

1,24,250

94,250

Realisation A/c (Profit)

52,250

52,250

 

 

 

 

 

 

 

1,54,250

94,250

 

1,54,250

94,250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank Account

 

 

Dr.

 

Cr.

 

 

Particulars

 (`)

Particulars

 (`)

 

 

To Balance b/d

30,000

By Realisation A/c

 

 

 

To Cash A/c

6,000

Creditors - 67,500

 

 

 

To Realisation A/c

 

Bills Payable - 30,000

 

 

 

Stock

56,250

Expenses – 5,250

1,02,750

 

 

Book Debts

54,000

By Rita’s Capital A/c

1,24,250,

 

 

Plant and Machinery

45,000

By Sobha’s Capital A/c

94,250

 

 

Land and Building

1,20,000

 

 

 

 

 To Loan to Sobha

10,000 

 

 

 

 

 

3,21,250

 

3,21,250

 

 

 

 

 

 

 

 

 

Rita’s Loan A/c

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

To Realisation A/c

15,000

Balance b/d

25,000

(25% Stock taken over)

 

 

 

 To Realisation A/c

 10,000

 

 

(Gain)

 

 

 

 

25,000

 

25,000

 

 

 

 

 

Loan to Sobha A/c

Dr.

Cr.

Particulars

 (`)

Particulars

 (`)

To Balance b/d

10,000

By Bank A/c

10,000

 

 

 

 

 

10,000

 

10,000

 

 

 

 

 

Working Notes:

Value of Stock Taken Over by Rita

Stock taken over by Rita=Book Value of Stock×25/100×80/100

[Since stock is taken over at a discount of 20%]

Stock taken over by Rita=75,000×25/100×80/100 =15,000

Question 40:  Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3:1:1.Last year, conflicts arose due to certain issues of disagreements and on 31st March, 2023, they decided to dissolve the firm. On that date their Balance Sheet was as under:


 

BALANCE SHEET OF ARNAB, RAGINI AND DHRUPAD as at 3 1st March, 2023

Liabilities

`

Assets

`

Creditors

60,000

Bank

50,000

Arnab's Brother's Loan

95,000

Debtors     1,70,000

 

Dhrupad's Loan

1,00,000

Prov. D.D.  (20,000)

1,50,000

Investment Fluctuation Reserve

50,000

Stock

1,50,000

Capital A/cs:

 

Investments

2,50,000

Arnab - 2,75,000

 

Building

3,00,000

Ragini - 2,00,000

 

Profit & Loss A/c

50,000

Dhrupad - 1,70,000

6,45,000

 

 

 

 

 

 

 

9,50,000

 

9,50,000

The assets were realised and the liabilities were paid as under:

(i) Arnab agreed to pay his brother's loan.

(ii) Investments realised 20% less.

(iii) Creditors were paid at 10% less.

(iv) Building was auctioned for 3,55,000. Commission on auction was 5,000.

(v) 50% of the stock was taken over by Ragini at market price which was 20% less than the book value and the remaining was sold at market price.

(vi) Dissolution expenses were 8,000.3,000 were to be borne by the firm and the balance by Dhrupad.

The expenses were paid by him.

Prepare Realisation Account and Partners' Capital Accounts.

 

Answer:


Realisation A/c

Particulars

`

Particulars

`

Debtors

1,70,000

Creditors

60,000

Stock

1,50,000

Arnab's Brother's Loan

95,000

Investments

2,50,000

Investment Fluctuation Reserve

50,000

Building

3,00,000

Prov. D.D.

20,000

 

 

By Bank A/c

 

To Bank A/c

 

Investment  - 2,00,000

 

(Creditors)

54,000

Building -3,55,000

 

To Bank A/c

(Commission on auction)

5,000

Stock 60,000

6,15,000

Arnab’s Capital A/c

(Arnab's Brother's taken over)

95,000

By Ragini’s Capital A/c (stock taken)

60,000

To Dhrupad’s Capital A/c

3,000

By Loss transferred to capital A/cs;

 

 

 

Arnab - 76,200

 

 

 

Ragini – 25,400

 

 

 

Dhrupad – 25,400

1,27,000

 

 

 

 

 

10,27,000

 

10,27,000

 

 

 

Capital A/c

Particulars

Arnab

Ragini

Dhrupad

Particulars

Arnab

Ragini

Dhrupad

To P&L A/c

30,000

10,000

10,000

By Balance B/d

2,75,000

2,00,000

1,70,000

To Realisation A/c (Loss)

76200

25400

25400

By Realisation A/c

95,000

-

-

To Realisation A/c

-

60000

-

(Arnab's Brother's Loan)

 

 

 

(Stock taken)

 

 

 

By Realisation A/c

-

-

3,000

To Bank A/c

2,63,800

1,04,600

1,37,600

(Expenses)

 

 

 

 

3,70,000

2,00,000

1,73,000

 

3,70,000

2,00,000

1,73,000

 

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