Question 6:
Pass Journal entries in the following cases?
(a) Expenses of realisation ₹600 but paid by Mohan, a partner.
(b) Mohan, one of the partners of the firm, was asked to look into the dissolution
of the firm for which he was allowed a commission of ₹ 2,000.
(c) Motor car of book value ₹ 50,000 taken over by Creditors of the
book value of ₹ 40,000 in full settlement.
Answer:
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Journal |
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S.N. |
Particulars |
L.F. |
Debits ₹ |
Credit ₹ |
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(a) |
Realisation A/c |
Dr. |
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600 |
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To Mohan’s Capital A/c |
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600 |
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(Being Realisation expenses paid by Mohan) |
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(b) |
Realisation A/c |
Dr. |
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2,000 |
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To Mohan’s capital A/c |
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2,000 |
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(Being Commission allowed to Mohan on dissolution of the firm) |
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(c) |
No entry No journal entry is passed because both motor car and Creditors accounts have already been transferred to Realisation Account and nothing is recovered or paid in terms of Cash and Bank |
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Question 7:
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:
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Journal |
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Particulars |
L.F. |
(₹) |
(₹) |
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(a) |
Realisation A/c |
Dr. |
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40,000 |
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To Cash A/c |
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40,000 |
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(Creditors worth ₹ 85,000 accepted 40,000 as cash and investment worth ₹ 43,000 in full settlement) |
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(b) |
No Entry |
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(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) |
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(c) |
Cash A/c |
Dr. |
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30,000 |
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To Realisation A/c |
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30,000 |
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(Creditors worth ₹ 90,000 accepted Building worth ₹ 1,20,000 and paid back₹ 30,000 as cash after settlement of claim to the firm) |
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Question 8:
Pass Journal entries for the following:
(a) Firm agreed to pay Alok ₹7,500 towards dissolution expenses. Dissolution expenses ₹10,000, which were paid by the firm.
(b) Realisation expenses were ₹5,000. It was agreed that the firm will bear ₹2,000 and balance by Ravi, a partner.
(c) Dissolution expenses of ₹10,000 were paid by Amit, a partner, on behalf of the firm.
(d) Realisation expenses up to 6,000 was agreed by the firm to reimburse Ajay. Dissolution expenses were 7,000.
Answer:
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Journal |
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S.N. |
Particulars |
L.F. |
Debits ₹ |
Credit ₹ |
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(a) |
Realisation A/c |
Dr. |
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7,500 |
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To Alok’s Capital A/c |
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7,500 |
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(Remuneration allowed to Alok) |
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Alok’s capital A/c |
Dr. |
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10,000 |
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To Bank A/c |
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10,000 |
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(Expenses paid by the firm on behalf of Alok) |
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Alternatively, only one single entry can also be passed instead of above two entries. |
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Realisation A/c |
Dr. |
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7,500 |
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Alok’s Capital A/c |
Dr. |
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2,500 |
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To Bank A/c |
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10,000 |
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(Realisation expenses paid) |
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(b) |
Realisation A/c |
Dr. |
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5,000 |
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To Ravinder’s Capital A/c |
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3,000 |
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To Bank A/c |
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2,000 |
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(Realisation expenses paid) |
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(c) |
Realisation A/c |
Dr. |
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10,000 |
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To Amit’s Capital A/c |
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10,000 |
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(Realisation expenses paid by Amit on behalf of the firm) |
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(d) |
Realisation A/c |
Dr. |
6,000 |
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To Ajay’s Capital A/c |
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6,000 |
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(Being reimbursement of realisation expenses was agreed by the firm to Ajay) |
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Question 9:
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:
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Date |
Particulars |
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Dr. (₹) |
Cr. (₹) |
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Dhwani's Loan A/c |
Dr. |
50,000 |
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To Realisation A/c |
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8,000 |
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To Bank A/c |
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42,000 |
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(Being Dhwani’s loan settled by paying ₹42,000) |
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Paavni's Loan A/c |
Dr. |
40,000 |
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To Realisation A/c |
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40,000 |
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(Being Loan of ₹40,000 was settled by giving an unrecorded asset of ₹ 45,000) |
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Realisation A/c |
Dr. |
60,000 |
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To Loan to Charu |
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60,000 |
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(Being Loan to Charu settled by payment to Charu's brother loan) |
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lknoor's Loan A/c |
Dr. |
80,000 |
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To Realisation A/c |
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60,000 |
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To Bank A/c |
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20,000 |
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(Being Loan to the firm and she took over Machinery) |
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Question 10:
Simar, Raja and Rita were partners in a firm sharing profits and losses in the ratio of 2:2:1.The firm was dissolved on 31st March, 2019. After the transfer of assets (other than cash) and external liabilities to the Realisation Account, the following transactions took place:
(a) A debtor whose debt of ₹90,000 had been written off as bad, paid ₹88,000 in full settlement.
(b) Creditors to whom ₹1,21,000 were due to be paid, accepted stock at ₹ 71,000 and the balance was paid to them by a cheque.
(c) Raja had given a loan to the firm of ₹ 18.000. He was paid ₹17,000 in full settlement of his loan.
(d) Investments were ₹ 53,000 out of which investments worth ₹ 43,000 were taken over by Simar at ₹ 52,000 and the balance of the investments were sold for ₹12,000.
(e) Expenses on dissolution amounted to ₹19,000 and the same were paid by the firm.
(f) Profit on dissolution amounted to ₹30,000.
Pass the necessary Journal entries for the above transactions in the books of the firm.
(CBSE 2020)
Answer:
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Date |
Particulars |
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₹ (Dr.) |
₹ (Cr.) |
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(a) |
Bank/Cash A/c |
Dr. |
88,000 |
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To Realisation A/c |
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88,000 |
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(Bad Debts recovered ) |
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(b) |
Realisation A/c |
Dr. |
50,000 |
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To Bank A/c |
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50,000 |
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(Balance paid) |
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(c) |
Raja's Loan A/c Dr. |
18,000 |
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To Bank/Cash A/c |
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17,000 |
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To Realisation A/c |
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1,000 |
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(loan of ₹18,000 settled at ₹17,000) |
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Alternative treatment |
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Raja's Loan A/c |
Dr. |
17,000 |
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To Bank/Cash A/c |
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17,000 |
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(Loan was paid) |
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Raja's Loan A/c Dr. To Realisation A/c |
1,000 |
1,000 |
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(difference transferred to realisation A/c) |
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(e) |
Realisation A/c Dr. |
19,000 |
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To Cash/Bank A/c |
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19,000 |
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(Realisation expenses were paid) |
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(f) |
Realisation A/c Dr. |
30,000 |
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To Simar's Capital A/c |
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12,000 |
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To Raja's Capital A/c |
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12,000 |
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To Rita's Capital A/c |
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6,000 |
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(Profit of dissolution distributed) |
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Ts Grewal Solution 2026-2027
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Class 12 / Volume – I