Dissolution 24-25 - commercemine

Question 33:

Michael, Jackson and John are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2024, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:

Liabilities			Amount (`)	Assets	Amount (`)
Creditors			40,000	Cash at Bank	3,000
Loan A/c:				Stock	50,000
Michael			10,000	Sundry Debtor	50,000
Workmen Compensation Reserve			21,000	Land and Building	57,000
Capital A/cs:				Profit and Loss A/c	15,000
Michael	60,000			Advertisement Suspense A/c	6,000
Jackson	40,000
John		10,000	1,10,000
			1,81,000		1,81,000

During the realisation, a liability under a suit for damages is settled at ` 20,000 as against ` 5,000 only provided for in the books of the firm.
Land and Building were sold for ` 40,000 and the Stock and Sundry Debtor realised ` 30,000 and ` 42,000 respectively. The expenses of realisation amounted to ` 1,200.
There was a car in the firm, which was completely written off from the books. It was taken by Michael for ` 20,000. He also agreed to pay Outstanding Salary of ` 20,000 not provided in books.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account in the books of the firm.

Answer:

Realisation Account
Dr.							Cr.
Particulars		(`)	Particulars			(`)
Land and Building		57,000	Creditors			40,000
Stock		50,000	Bank
Sundry Debtor		50,000	Land and building		40,000
			Stock		30,000
Bank A/c:			Sundry Debtor		42,000	1,12,000
Creditors (40,000 + 15,000)	55,000
Expenses	1,200	56,200	Loss transferred to:
			Michael’s Capital A/c	30,600
			Jackson’s Capital A/c	20,400
			John’s Capital A/c	10,200		61,200
		2,13,200				2,13,200

	Partners Capital Accounts
	Dr.								Cr.
Particulars		*Michael*	Jackson	John	Particulars	*Michael*	Jackson	John
Profit and Loss A/c Advertisement Suspense A/c Realisation A/c (Loss)		7,500 3,000 30,600	5,000 2,000 20,400	2,500 1,000 10,200	Balance b/d Workmen Compensation Reserve A/c Bank A/c	60,000 10,500 ------	40,000 7,000 ------	10,000 3,500 200
Bank A/c		29,400	19,600	-------

		70,500	47,000	13,700		70,500	47,000	13,700

**Michael’s Loan Account**
Dr.				Cr.
Particulars	(`)	Particulars	(`)
Bank A/c	10,000	Balance b/d	10,000


	10,000		10,000

Bank Account
Dr.				Cr.
Particulars	(`)	Particulars	(`)
Balance b/d	3,000	Michael’s Loan A/c Realisation A/c	10,000 56,200
Realisation A/c	1,12,000	Michael’s Capital A/c	29,400
John’s Capital A/c	200	Jackson’s Capital A/c	19,600

	1,15,200		1,15,200

Question 34:

Prashant and Rajesh are partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2024, their Balance Sheet was:

Liabilities	(`)	Assets		(`)
Bank Overdraft	30,000	Cash in Hand		6,000
General Reserve	56,000	Bank Balance		10,000
Investments Fluctuation Reserve	20,000	Sundry Debtor	26,000
Prashant 's Loan	34,000	Less: Provision for Doubtful Debtor	2,000	24,000
Capital A/c:
Prashant	50,000	Investments		40,000
		Stock		10,000
		Furniture		10,000
		Building		60,000
		Rajesh 's Capital		30,000
	1,90,000			1,90,000

On that date, the partners decide to dissolve the firm. Prashant took over Investments at an agreed valuation of ` 35,000. Other assets were realised as follows:
Sundry Debtor: Full amount. The firm could realise Stock at 15% less and Furniture at 20% less than the book value. Building was sold at ` 1,00,000.
Compensation to employees paid by the firm amounted to ` 10,000. This liability was not provided for in the above Balance Sheet.
You are required to close the books of the firm by preparing Realisation Account, Partners' Capital Accounts and Bank Account.

Answer:

Realisation Account
Dr.							Cr.
Particulars			(`)	Particulars		(`)
Sundry Debtor			26,000	Provision for Doubtful Debts		2,000
Investments			40,000	Bank Overdraft		30,000
Stock			10,000	Investments Fluctuation Reserve		20,000
Furniture			10,000
Building			60,000	Prashant’s Capital A/c (Investments)		35,000
Bank A/c:				Bank A/c:
Compensation to Employees		10,000		Sundry Debtor	26,000
Bank Overdraft		30,000	40,000	Stock	8,500
Profit transferred to:				Furniture	8,000
Prashant’s Capital A/c	29,000			Building	1,00,000	1,42,500
Rajesh’s Capital A/c	14,500		43,500
			2,29,500			2,29,500

Partners Capital Accounts
Dr.						Cr.
Particulars	Prashant	Rajesh	Particulars	Prashant	Rajesh
Balance b/d	–	30,000	Balance b/d	50,000	–
Realisation A/c (Investment)	35,000		General Reserve A/c	37,333	18,667
Bank A/c	81,333	3,167	Realisation A/c (Profit )	29,000	14,500

	1,16,333	33,167		1,16,333	33,167

Prashant’s Loan Account
Dr.				Cr.
Particulars	Amount (`)	Particulars	Amount (`)
		Balance b/d	34,000
Bank A/c	34,000
	34,000		34,000

Bank Account
Dr.			Cr.
Particulars	Amount (`)	Particulars	Amount (`)
Balance b/d	10,000	Realisation A/c	40,000
Cash A/c	6,000	Prashant’s Capital A/c	81,333
Realisation A/c	1,42,500	Rajesh’s Capital A/c	3,167
		Prashant’s Loan A/c	34,000
	1,58,500		1,58,500

Question 35:

Yogesh and Naresh were partners sharing profits equally. They dissolved the firm on 1st April, 2024. 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 36:

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, 2024 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

Ts Grewal Solution 2024-2025

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Class 12 / Volume – I

12th | Dissolution of a Partnership Firm | Question No. 33 To 36 | Ts Grewal Solution 2024-2025

Question 33:

Michael, Jackson and John are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 1/6 respectively. On 31st March, 2024, they decided to dissolve the partnership and the position of the firm on this date is represented by the following Balance Sheet:

Answer:

Question 34:

Answer:

Question 35:

Answer:

Question 36:

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