12th | Dissolution of a Partnership Firm | Question No. 37 To 40 | Ts Grewal Solution 2025-2026

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, 2025, 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, 2025
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

 

On this date, Balance Sheet of the firm, apart from realisable assets and outside liabilities showed the following

Raina's Capital	40,000 (Cr)
Meena's Capital	20,000 (Dr.)
Profit & Loss Account	10,000 (Dr.)
Raina's Loan to the Firm	15,000
General Reserve	7,000

On the date of dissolution of the firm:

(a) Raina's loan was repaid by the firm along with interest of ₹500.

(b) Dissolution expenses of ₹1,000 were paid by the firm on behalf of Raina.

(c) An unrecorded asset of ₹ 2,000 was taken by Meena while Raina paid an unrecorded liability of ₹ 3,000.

(d) Dissolution resulted in a loss of ₹ 60,000 from the realisation of assets and settlement of liabilities.

You are required to prepare Partners Capital Accounts.

Answer:

Capital A/c
Particulars	Raina	Meena	Particulars	Raina	Meena
To Balance B/d	-	20,000	By Balance B/d	40,000	-
To P&L A/c	5,000	5,000	By G.R. A/c	3,500	3,500
To Realisation A/c (Loss)	1,000	-	By Realisation A/c	3,000	-
To Realisation A/c	-	2,000	(Liabilities taken)
(Liabilities Taken)			By Bank A/c	-	53,500
To Realisation A/c	30,000	30,000
(Loss)
To Bank A/c	10,500	-
	46,500	57,000		46,500	57,000

 

 

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

 

A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2025, 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, 2025
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