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

Bank A/c

1,24,250

94,250

Realisation A/c (Profit)

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

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

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Class 12 / Volume – I

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

Question 37:

Answer:

Question 38:

Answer:

Question 39:

Answer:

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