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12th | Dissolution of a partnership firm | Question No. 5 To 8 | Ts Grewal Solution 2023-2024

Question 5:


Pass Journal entries for the following:
(a) Realisation expenses amounted to  ` 10,000 were paid by the firm on behalf of Alok, a partner, with whom it was agreed at  ` 7,500.
(b) Realisation expenses amounted to  ` 5,000. It was agreed that the firm will pay  ` 2,000 and balance by Ravinder, a partner.
(c) Dissolution expenses amounted to  ` 10,000 were paid by Amit, a partner, on behalf of the firm.

Answer:


 

Journal

S.N.

Particulars

L.F.

Debits

`

Credit

`

(a)

Realisation A/c

Dr.

 

7,500

 

  To Alok’s Capital A/c

 

 

7,500

(Remuneration allowed to Alok)

 

 

 

Alok’s capital A/c

Dr.

 

10,000

 

To Bank A/c

 

 

10,000

(Expenses paid by the firm on behalf of Alok)

 

 

 

Alternatively, only one single entry can also be passed instead of above two entries. 

 

 

 

Realisation A/c

Dr.

 

7,500

 

Alok’s Capital A/c

Dr.

 

 2,500

 

To Bank A/c

 

 

10,000

(Realisation expenses paid) 

 

 

 

 

 

 

 

(b)

Realisation A/c

Dr.

 

5,000

 

 To Ravinder’s Capital A/c

 

 

 

3,000

To Bank A/c

 

 

2,000

(Realisation expenses paid)

 

 

 

 

 

 

 

(c)

Realisation A/c

Dr.

 

10,000

 

To Amit’s Capital A/c

 

 

10,000

(Realisation expenses paid by Amit on behalf of the firm)

 

 

 

 

Question 6:


 Pass necessary Journal entries in the following cases:
(a) Creditors  worth  ` 85,000 accepted  ` 40,000 as cash and Investment worth  ` 43,000, in full settlement of their claim.
(b) Creditors were  ` 16,000. They accepted Machinery valued at  ` 18,000 in settlement of their claim.
(c) Creditors were  ` 90,000. They accepted Building valued at  ` 1,20,000 and paid cash to the firm  ` 30,000.

Answer:


Journal

 

 

Particulars

L.F.

 ( `)

 ( `)

(a)

Realisation A/c

Dr.

 

40,000

 

 

To Cash A/c

 

 

 

40,000

 

(Creditors  worth  ` 85,000 accepted 40,000 as cash and investment worth  ` 43,000 in full settlement)

 

 

 

 

 

 

 

 

(b)

No Entry

 

 

 

 

 

(Creditors worth  ` 16,000 accepted Machinery worth  ` 18,000 in full settlement. No entry as both asset and liability are already transferred to the Realisation Account)

 

 

 

 

 

 

 

 

(c)

Cash A/c

Dr.

 

30,000

 

 

To Realisation A/c

 

 

 

30,000

 

(Creditors  worth  ` 90,000 accepted Building worth  ` 1,20,000 and paid back ` 30,000 as cash after settlement of claim to the firm)

 

 

 


Question 7: Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into partnership firm last year only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial requirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due to certain disagreements and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had transferred various assets and external liabilities to Realisation Account. Due to her busy schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On the date of dissolution, you have observed the following transactions:


(i) Dhwani's Loan of `50,000 to the firm was settled by paying `42,000.

(ii) Paavni's Loan of `40,000 was settled by giving an unrecorded asset of ` 45,000.

(iii) Loan to Charu of `60,000 was settled by payment to Charu's brother loan of the same amount.

(iv) lknoor's Loan of ` 80,000 to the firm and she took over Machinery of ` 60,000 as part payment.

You are required to pass necessary entries for all the above mentioned transactions.

(CBSE Sampe Paper 2023)

 

Answer:


Date

Particulars

 

Dr. (`)

Cr. (`)

 

Dhwani's Loan A/c

Dr.

50,000

 

 

 To Realisation A/c

 

 

8,000

 

 To Bank A/c

 

 

42,000

 

(Being Dhwani’s loan settled by paying `42,000)

 

 

 

 

Paavni's Loan A/c

Dr.

40,000

 

 

To Realisation A/c

 

 

40,000

 

(Being Loan of `40,000 was settled by giving an unrecorded asset of ` 45,000)

 

 

 

 

Realisation A/c

Dr.

60,000

 

 

 To Loan to Charu

 

 

60,000

 

(Being Loan to Charu settled by payment to Charu's brother loan)

 

 

 

 

lknoor's Loan A/c

Dr.

80,000

 

 

 To Realisation A/c

 

 

60,000

 

 To Bank A/c

 

 

20,000

 

(Being Loan to the firm and she took over Machinery)

 

 

 

 

Question 8:


Pass Journal entries for the following at the time of dissolution of a firm:

(a) Sale of Assets − `50,000.
(b) Payment of Liabilities − `10,000.
(c) A commission of 5% allowed to Mr. X, a partner, on sale of assets.
(d) Realisation expenses amounted to `15,000. The firm had agreed with Amrit, a partner, to reimburse him up to  ` 10,000.

(e) Employees provident fund `10,000,
(f) Z, an old customer, whose account for `6,000 was written off as bad in the previous year, paid 60% of the amount written off.
(g) Investment (Book Value `10,000) realised at 150%.

(h) Realisation expenses were `10,000. The firm had agreed with krishan a partner, to reimburse him up to ` 7,500.

Answer:


Journal

S.N.

Particulars

L.F.

Debits

`

Credit

`

(a)

Cash A/c

Dr.

 

50,000

 

To Realisation A/c

 

 

50,000

(Assets realized for cash)

 

 

 

 

 

 

 

(b)

Realisation A/c

Dr.

 

10,000

 

To Cash A/c

 

 

10,000

(Payment of liabilities made)

 

 

 

 

 

 

 

(c)

Realisation A/c

Dr.

 

2,500

 

To X’s Capital A/c

 

 

2,500

(5% commission allowed to Mr. X’s on sale of assets of  ` 50,000)

 

 

 

 

 

 

 

(d)()

 

 

 

 

 

 

 

 

 

 

 

 

 

(e)

Realisation A/c

Dr.

 

10,000

 

To Amrit’s Capital A/c

 

 

10,000

(Amrit was allowed remuneration on account of realisation)

 

 

 

Amrit’s Capital A/c

Dr.

 

15,000

 

To Cash A/c

 

 

15,000

(Realisation expenses paid on behalf of amrit)

 

 

 

Alternatively, only one single entry can also be passed instead of above two entries.

 

 

 

Realisation A/c

Dr.

 

10,000

 

Amrit’s Capital A/c

Dr.

 

5,000

 

   To Cash A/c

 

 

15,000

(Realisation expenses paid)

 

 

 

 

 

 

 

Realization A/c                                            Dr.

 

 

 

 To Cash A/c

 

 

 

(Paid provident fund)

 

 

 

 

 

 

 

(f)

Cash A/c

Dr.

 

3,600

 

   To Realisation A/c

 

 

3,600

(60% of  the Bad debts against Z an old customer now recovered)

 

 

 

 

 

 

 

 

(g)

Cash A/c

Dr.

 

15,000

 

To Realisation A/c

 

 

15,000

 

(Investments are realised at 150%)

 

 

 

 

 

 

 

 

(h)

Realisation A/c

 

7,500

 

 

 To Krishna’s Capital A/c

 

 

7,500

 

(Krishna, a partner, reimbursed for realization expenses)

 

 

 

 

 

 

 

 

 

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