7.52 Double Entry Book Keeping—CBSE XIl Za EXER GSE ff —$— Land and Building (Book Value) €1,60,000 sold for&3,00,000 through a broker who charged 2% commission on the deal. Journalise the transaction, at the time of dissolution of the firm. (CBSE Sample Question Paper 2014 Ml mmf, 2. {a) Pass the Journal entry when an unrecorded liability of & 15,000 is settled at % 10,000 and paid by Xa partner on the dissolution of a firm? (b) Pass a Journal entry if a machine having a book value of € 15,000 is given to Rakesh, a creditor of % 22,000 for € 12,000 towards part payment of his dues? [Ans.: (a) Dr. Realisation A/c and Cr. Xs Capital A/c by 10,000, (6) Dr Realisation A/c and Cr. Cash/Bank A/c by 10,000} 3. Pass Journal entries in the following cases? (a) Expenses of realisation % 600 to be borne by the firm and are paid by Mohan, a partner. (0) Mohan, one of the partners of the firm, was asked to carry out dissolution of the firm for which he was allowed a salary of € 20,000. Expenses for dissolution were & 5,000. (©) Motor car of book value ® 50,000 taken by a creditor for € 40,000 in settlement. [Hint: (c) Entry 4, Pass Journal entries for the following: not be passed for asset taken by creditor] (@) Realisation expenses of € 10,000 were to be borne by Raman, a partner, but were paid by the firm. (b) Mahesh, a partner, was paid ® 25,000 and he was to bear the expenses. (©) Suresh, partner, was paid € 20,000 and he was to bear the expenses. Firm paid an expense of €5,000. Pass Journal entries for the following: (@) Firm agreed to pay Alok & 7,500 towards dissolution expenses. Dissolution expenses were 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. (0) Dissolution expenses of € 10,000 were paid by Amit, a partner, on behalf of the firm. (4) Realisation expenses up to % 6,000 was agreed by the firm to reimburse Ajay. Dissolution expenses were 7,000. [Hint: (d) Realisation Account will be debited by ¥ 6,000] 6. Pass necessary Journal entries in the following cases: {@) Creditors of 85,000 accepted 40,000in cash and Investment of 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. (0) Creditors were 90,000. They accepted Building valued at 1,20,000 and paid cash to the firm 30,000. (wceRn) (Hints: (a) Dr. Realisation A/c and Cr, Cash A/c by ® 40,000. (b) No Entry, (c)_ Dr. Cash A/c and Cr. Realisation A/c by € 30,000.) 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 Fequirements, few partners also provided loan to the firm. Within a year, their conflicts arisen due t0 certain disagreements and they decided to dissolve the firm. The firm had appointed Ms, Kavya, who Is 2 @ scanned with OKEN Scanner10, . Pass necessary Journal entries for the Che \ financial advisor and legal consultant, to ‘apter 7 - Dissolution of a Partnership Firm 7.53. pod transferted VariOUs assets and external room cesoltion pes Kavya has delegated thisassignmey al labile to Reaian — In the first instance, Ms. Kavya ntto count. Due to her busy schedule; observed the fol ent to you, bein have lowing transactions: 19 an intern in her firm. On the date of dissolution, you {)_Dhwani’s Loan of € 50,000 to the frm we a a gi Paavnis Loan of€ 40.000 was sted by g ane at {i Loan to Charu of € 60,000 was settled Brey errant fo noo Loan of 0,00 tothe fm and Lt to Charu’s brother loan of the same amount. e Ahead is se necssiry icsia ee took over Machinery of € 60,000 as part payment. all the above mentioned transactions. ass Journal entries for the followin i {cBSe Sample uesion Peper 2029 i atthe time tran cash) and outside lables have been tran bed pene fn of Xand Yafter the assets (other fa) Sale of Assets—¥ 50,000. ae (b) Payment of Liabilities—¥ 10,000. (@) Acommission of 5% was allowed to X a partner, onsale of asets (d) Realisation expen: ‘s @) ; (pi : \ses were € 15,000. The firm had agreed with Amrit, to reimburse him % 10,000. (@) Employees’ Provident Fund & 10,000 was paid. {f) Za debtor, whose account of ® 6,000 was written offs bad earlier, paid 60% of the amount (g) Investment (Book Value & 10,000) realised at 150%. {h) Realisation expenses were % 10,000. The firm had agreed with Y, a pi upto 7,500. Hint: (h) Realisation Account will be debited by 87,5001 following transactions, of after the various assets (other than cash) and third jartner, to reimburse him wn the dissolution of a partnership firm of Kavita and Suman on 31st March, 2022, party liabilities have been transferred to Realisation Account. fa) Kavita took over stock amounting to 1,00,000at& 90,000. (b) Creditors of € 2,00,000 took over Plant and Machinery of & 3,00, an unrecorded asset of € 23,000 which was taken over by Suman at® 17,000. id by Kavita. (000 in full settlement of their claim. (0) There was (@) Realisation expenses € 2,000 were pai (@) Bank Loan of & 21,000 was paid off (CBSE 2023) {© Loss on dissolution amounted to 7,000. [Mints: (@) Dr Kavitas Capital A/c and Cr. Realisation Ac by 90,000. (b) No Entry. i Realisation A/c by 17,000. (0) Dr Suman’ Capital A/c and Ct ita’s Capital A/C | by & 2,000. 21,000. (a) Dr. Realisation A/c an () Dr. Realisation A/c ané ital A/c by & 3,500; (f) Dr. Kavita’s Capital A/c by Capital A/c by sation A/c by 7.0001 es + business. Due to strained relationship among the cobile spare part ; secolecive ‘Fevsions for the growth of business. AS2 result, firm has been partners decided t© dissolve the firm. dcr Kavi 1d Cr. Bank A/c by © 3,500 and Suman’s Nisha, Kamal and Vijay had an Partners, they were unable to t2 inlosses for the last 3 years. The Fallowing transactions took place a the ft a‘ (i) Shiv, a creditor, to whom © 6,000 were due, accepte Paid to him. .e of dissolution: “office equipment at € 4,000 and the balance was @ scanned with OKEN Scannerjing—CBSE Xi 54 Double Entry | Book Keep! ; ich were of €1,00,000, half ofits taken PY Mohan, a creditor, at 10% above the book which were of €1,00,000, {ip Investment, tof his claim. value in settlement ) Loan of € 50,000 advanced by Ni {i Loss on realisation € 30,000 was distributed among the par above transactions atthe time of dissolution of the firm. realised being tangible asset) fits and losses in the ratio of 2: than cash) and external liabilities to the 7 sha to the firm was returned. ia tners equally. Journalise the [Hint (i 50,000 (50% of€1,00,000) will be 11. Simar, Raja and Rita were partners in a firm sharing PIO esolved on 31st March, 2019. After the transfer of assets (othe Realisation Account, the following transactions took place: ‘Adebtor whose debt of 20,000 had been written off as bad, pald € 88,000 in full settlement. towhom? 121,000 were due tobe paid, accepted stock at 71,000 and the balance was paid £1. The firm was @ (b) Creditors' to them by a cheque. (©) Raja had given a loan to the {@) Investments were © 53,000 out of which investments of € 43,000 were taken by Simar at 52,000 and the balance of the investments were sold for & 12,000. 1e same were paid by the firm. .e firm of € 18,000. He was paid & 17,000 in full settlement of his loan. (e) Expenses on dissolution amounted to 19,000 and the (f) Profit on dissolution amounted to % 30,000. for the above transactions in the books of the firm. (CBSE 2020) Pass the necessary Journal ent Hints: (2) Dr. Bank/Cash A/cand Cr. Realisation A/c by € 88,000. (b) Dr. Realisation A/c and Cr. Bank A/c by & 50,000 each. (©) Dr.Raja’s Loan A/c by & 18,000; Cr. Bank/Cash A/c by & 17,000 and Realisation A/c by & 1,000. Alternatively: (Dr. Raja's Loan A/c and Cr. Bank/Cash A/c by 17,000 each. (id) Dr. Rajats Loan A/c and Cr. Realisation A/c by € 1,000 each. (6). Dr.Simar’s Capital A/c by ® 52,000 and Cash/Bank A/c by 12,000; Cr. Realisation A/cby® 64,000. (©) Dr. Realisation A/c and Cr. Cash/Bank A/c by € 19,000 each. (0) Dr. Realisation A/c by 30,000; Cr. Simar's Capital A/c by € 12,000; Raja's Capital A/c by 12,000 and Rita's Capital A/c by & 6,000] 12. Passnecessary Journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya: @ eae ‘an old furniture in the firm which had been written off completely in the books. This was sold F& 3,000. (b) Ashish, an old customer whose account for 1,000 was written offas bad in the previous year, paid 60% of the amount. : (0) Paras agreed to take over the firm's goodwill (not record fed in the books of tion of € 30,000. Oks of the firm), at a valuat (4) There was an old typewriter which had been written off completely from the books. It was estimated to realise % 400. It was taken by Priya at an estimated price less 25%. (@) There were 100 shares of €10 each in Star Limited acquired at a cost of & 2,000 which had been written- ‘off completely from the books. These shares are valued @ 6 each and divided among the partners in their profit-sharing ratio. cert) @ scanned with OKEN Scanner13 4 15, ch [Hints:_ (@). Dr. Cash/Bank A/c and ¢ ‘apter 7 - Dissolution of a Partnership Firm 7.55 {h) DE Castvbank canes e Salon Aic by &3,000. . Realisatio Dr Pe : n Ale by & 6 : o ‘aras’s Capital A/c and Cr. Realisation i by MS ae ic (A) Dr. Priya’s Capital A/c and Cr. Realisation Ay ae (e)_ Dr. Paras's Capital A/c and Priya’s Ca pn Cr. Realisation A/c by & 600] pital A/c by € 300 each; ‘amanand Harsh were partners ina firm, di rm, di after assets (other than Cash and Bank) Pe Pass necessaty Journal entries for the following fa rats edved na bok avetren 4 ide liabilities had been transferred to Realisation Account: {b) Profit & Loss Account had credit balance 415 pest i ea eee ‘of ® 15,000 on the date of dissolution. (0) Harsh’s loan of & 6,000 was settled by paying 5,500. Firm paid realisati i i bald real sath ee of & 5,000 on behalf of Harsh, a partner. fe) There was a chequ Ronan yeque for & 1,200 under discount. The cheque was received from Soham who became insolvent and a first and final dividend of 25% was received from his estate (9, Creditors of 6,000, accepted stock of 5,000 at account of 5% andthe balancein cash [Hint (a) Balance furniture of € 25,000 wil be realised at book value being tangible asset] fohit, Kunal and Sarthak partners decided to dissolve their firm. Pass necessary Journal entries for the flow ng si various assets (other than Cash and Bank) and outside liability had been transferred to ealisation Account: (@) Kunal agreed to pay his wife's loan of € 60,000. (b) Total Creditors ofthe firm were & 40,000. Creditors of € 10,000 were given part of furntute of book value € 8,000 out of total furniture of book value € 26,000 in settlement. Remaining reltors allowed discount of 10%. : (0 Rohit had given a loan of & 7 (@) Amachine which was not recorded in the books was ta value was € 5,000. (@) The frm had a debit balance of € 15,000 inthe Prof L055 ‘Account on the date of dissolution. (0) Sarthak paid the realisation expenses of € 16,000 and was tobe paid 15,000, including expenses for completing dissolution process. Hints: (b) (i) Dr. Bank A/c and Credit Realisation A/c by 20,000. (i) Dr Realisation A/c and Cr Bank Ae By % 27,000. pital A/c by € 15,0001 n Asc and Cr. Sarthak’s Cal ofits and losses in the ratio of 3 : 1. The firm was (6) Dr. Realisatio ina firm sharing PF Q Suman and Rajan were partners In @ 1M To urna entries forthe following transsetier™ after ji Pass , sao 2 2 Me ora ca e nd and at bank) and third party tiabilities have been transferred to s assets (other Realisation Account: i : anses & 10,000 were paid by the A 10,000 to the firm which was paid. ken by Kunal at € 3,000, whereas its expected ch he accepted ® 58,000 in full settlement. {a) Dissolution exp F : ‘90 to the firm for whi io ae ra oa oe nine Poi Loss Acounton the ate of dsoton ic) .e firm had a debit bala! a (CBSE 2020) (@) Proft on realisation was € 12.000. cashyBonk Ne by #10000: : Cas UMints: (a) Dr Realisation VE hie o0and c.Bank/Cash Ale by 58,000 and Realisation A/c by 2,000. (b) Dr Rajan Loan A/C” 0,000 and Rajans Capital A/c by 10,000; (¢) Dr. Suman’s Capit Cr. Profit & Loss A/C PY 40,000. %12,000;CF pital A/c by € 9,000 ‘and Rajan’s Capital A/c by % 3,000.) (a) Dr Realisation A/c PY i ssuman's Cat @ scanned with OKEN Scanner7.56 Double Entry Book Keeping—CBSE Xi sary Journal entries forthe following transactions on the dissolution ofa frm after various asets ss neces oe .s have been transferred to Realisation Account: (other than cash) and outside lia (i) Realisation expenses of the firm amounting to € 2,600 were p by partner, Aman. (ii) A.creditor of & 4,500 took over stock valued at & 5,200 in full settlement. (ii), An unrecorded asset realised € 3,500. {iv)_ Remaining creditors amounting to % 20,000 were paid at a discount of 5%. (¥)_ Remaining stock of 30,000 was taken over by Bimal, a partner, at a discount of 20%. (vi) Investment whose face value was ® 10,000 was realised at 40%. (cBse 2023) Hints: (i) Dr. Realisation A/c and Cr. Aman’s Capital A/c by & 2,600. (i) No Entry. (iil) Dr. Cash/Bank A/c and Cr. Realisation A/c by & 3,500. (iv) Dr. Realisation A/c and Cr. Cash/Bank A/c by & 19,000. (v) Dr. Bimal's Capital A/c and Cr. Realisation A/c by & 24,000, (vi). Or. Cash/Bank A/c and Cr. Realisation A/c by & 4,000] 17. Pass Journal entries for payment of following unrecorded liabil Shiv and Mohan: s on the dissolution ofa firm of partners (2) There was contingent liability in respect of post-dated cheque discounted but not matured of & 18,500, An issuer of a cheque of & 2,500 became insolvent and fifty paise in a rupee was recovered, The liability of the firm on account of this cheque discounted and dishonoured has not so far been recorded. (b) There was a contingent liability in respect of a claim for damages for & 75,000, such liability was settled for & 50,000 and paid by the partner Shiv. (6) Firm had to pay 10,000 as compensation to an injured employee, which was a contingent liability not accepted by the firm, (@) %5,000 for damages claimed by a customer has been disputed by the firm. It was settled at 70% by @ compromise between the customer and the firm, (Hints: (2) () Dr. Realisation A/c and Cr. Bank A/c by 2,500. (i) Dr. Bank A/c and Cr. Realisation A/c by & 1,250. (b) Dr. Realisation A/c and Cr. Shiv’s Capital A/c by & 50,000, (0) Dr. Realisation A/c and Cr. Bank A/c by & 10,000. (d) Dr. Realisation A/c and Cr. Bank A/c by & 3,500) 18. Pass necessary Journal entries on dissolution of a firm in the following cases: {@)_ Dharam, a partner, was appointed to look after the process of dissolution at a remuneration of 812,000. Dissolution expenses were tobe borne by the firm, Dissolution expenses & 11,000 were paid by Dharam. (©) Jay, partner, was appointed to look after dissolution and was to be paid 15,000, including dissolution expenses, Dissolution expenses 8 16,000 were paid by Vijay, another partner on behalf of Jay. (0. Deepa, a partner, was to handle dissolution and for this work she was to be paid & 7,000, including dissolution expenses. Dissolution expenses & 6,000 were paid from the firm’s bank account, Dev, 2 partner, agreed to do the work of dissolution for & 7,500. He took stock of the same value as his ‘commission. The stock had already been transferred to Realisation Account, (©) Jeev, a partner, agreed to do the work of dissolution for which he was allowed commission of £10,000, He agreed to bear the dissolution expenses, Actual dissolution expenses paid by Jeev were 712,000. These expenses were paid by Jeev by drawing cash from the firm, @ @ scanned with OKEN ScannerChapter 7 « Dissolution of a Partnership Firm 7. {@) Dr. Realisation A/c and Cr. Dharam Capital A/c by & 23,000 o ca Realisation A/c and Cr. Jays Capital Ncby & 15,00 i ee bes Capital A/c and Cr. Vijay's Capital A/c by & 16,000. - Realisation A/c and Cr. Deepa’ 000. ation A . Deepa's Capital A/c by & 7,000. (i) Dr. Deepa’s Capital A/c and Cr. Bank A/c by @ an t {d) No Entry. (©) @ De Realisation A/c and Cr. Jeev's Capital A/c by & 10,000 {id Dr.Jeev's Capital Arc and Cr. Cash Alc by® 12,000) Hints: Realisation Account ec Dand E were partnersina fim sharing profits inthe aloof 3:1:1-Thel S22 was as follows: ratio of 3: 1:1. Their Balance Sh BALANCE SHEET OF C, D AND Eas at 31st March, 2022 eet as at 31st March, abilities zg Assets z Capital A/S ‘Machinery 3,20,000 c 4,00,000 Investments 3,00,000 D 2,00,000 Stock 200,000 3 1,00,000 | 7,00,000 Debtors 1,00,000 CsLoan 1,20,000 | Cash at ‘Bank 2,00,000 Sundry Creditors 1,00,000 Bills Payable 2,00,000 11,20,000 11,20,000 was dissolved due to certain disagreement among the partners: ir account and remaining ‘On the above date, the firm {) Machinery of % 3,00,000 were give machinery was sold for & 10,000. {i Investments realised € 2,90,000- (ii) Stock was sold for ® 1,80,000. (iv) Debtors for & 20,000 proved bad. {W) Realisation expenses amounted to 10,000. Prepare Realisation Account. [an raring profits in the ratio of their ca n to creditors in full settlement of thelt 20. Ramesh and Umesh were partnersina firm (CBSE 2023) 155 on Realisation—X 2,70,000.] pitals. On 31st March, 2024, their Balance Sheet was as follows: pe: | Assets = —s 7,70,000 | Bank KT ‘Wormen Compensation Reserve 2,10,000 | Debtors 0000. Genera Reserve 2,00,000 | stock 3008 "emesh’s Current Account 0,000 | Furniture -io.000 otal Nes: Machinery 30000 a 7,00,000 Umesh's Curent Account a feed 10,00,000 Eas 76 60,000, oo —— : jissolved. On the above date the firm was d (2) Ramesh took 50% of stock at (8) Furniture was taken by Umesh fo .5 than book value. 10,000 les ry was sold for 8 4,50,000. 1 50,000 and machine @ scanned with OKEN Scanner7.58 Double Entry Book Keeping—CBSE XII (c) Creditors were paid in full (@) There was an unrecorded bill for repairs for € 160,000 which was settled and paid at 1,40,000, (Foreign 2014, Modified) [Hints: 1. Balance Stock (& 65,000) will be realised at Book Value, being tangible asset. °2, Debtors will be realised at book value, ie.,€ 2,40,000.] Prepare Realisation Account. [Ans.:Loss on Realisation—R 7,80,000) 21. Pradeep and Paresh partners in a firm decided to dissolve their partnership firm on 1st April, 2024, Pradeep was deputed to realise the assets and to pay off the liablities. He was paid @ 10,000 as commission for his services. Balance Sheet of the firm on 31st March, 2024 was as follows: BALANCE SHEET as at 31st March, 2024 Liabilities T_| Assets z Sundry Creditors 1,29,400 | Building 3,00,000 Mrs. Pradeeps Loan 40,000 | Investment 30,000 Paresh’s Loan 24,000 } Debtors 71,400 Investment Fluctuation Reserve 8,000 | Less: Provision for Doubtful Debts 4,000] 67400 Capital Aves: Bank Pradeep 121,000 Profit & Loss A/c Paresh 121,000 |_2,42,000 | Goodwill 443,400 Following terms and conditions were agreed upon: {@) Pradeep agreed to pay his wife's loan. (b) Investment was given to Paresh for € 27,000. (©) Building realised ® 3,50,000. (d) Creditors were to be paid after two months, they were paid immediately at 10% p.a. discount. (€) Realisation expenses were & 2,500. Prepare Realisation Account. {Ans.: Realisation Gain—X 38,657; Payment to Creditors— 1,27,243.] 22. Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March, 2018, their Balance Sheet was as follows: BALANCE SHEET OF ASHISH AND KANAV as at 3/st March, 2018 Liabilities | Assets z Trade Creditors "42,000 | Bank 35,000 Employees’ Provident Fund 60,000 | Stock 24,000 ‘Mrs. Ashish’s Loan 9,000 | Debtors 19,000 Kanav's Loan 35,000 | Furniture 40,000 Workmen's Compensation Fund 20,000 | Plant 2,10,000 Investment Fluctuation Reserve 4,000 | Investments 32,000 Capitals: Profit & Loss A/c 10,000 Ashish 1,20,000 Kanav 80,000 | 2,00,000 3,70,000 3,70,000, On the above date they decided to dissolve the firm. (a) Ashish agreed to take over furniture at ® 38,000 and pay Mrs. Ashish’s loan, (b) Debtors realised & 18,500 and plant realised 10% more. (©) Kanav took over 40% of the stock at 20% less than the book value, Remaining stock was sold ata gain of 10%. @ scanned with OKEN Scannera hapter 7- Dissolution of a Partnership Firm 7-59 lement, (¢) Trade creditors took over inves (e) Kanav agreed to take over th 12,000 and to bear realisati prepare Realisation Account, eStments in Ful sett Fesponsibilit ion ex 'y of completing dissolution at an agreed remuneration of ‘&xPenses of realisation amounted to & 8,000. ‘ ath \ (CBSE 2019) 43. Ramu, Laxman and Bharat started busine [Ans.: Gain (Profit) on Realisation 20,020.) 60,000 respectively sharing profits and lan so, St APH, 2023 with cay t i pitals of F 1,00,000, % 80,000 and the firm incurred loss of €So,o00 ten 85e5in the ratio of 4373. forthe seor ending 31 Merch 2026, your working clear si ly. ee tundry Assets (Balancing Figure}—X 10,000; Gain (Profit) on Realisation 1,20 500) Realisation Account, Partners’ Capital Accounts and Bank/Cash Account 24, A,B and C were partners sharing profits and ir 12: co terest lel ind losses in the ratio of 2 : 2: 1. Their Balance Sheet as at BALANCE SHEET OF A, B AND Cas at 31st March, 2018 [Ans.: ‘bites T__ [Assets z Capitals: Cash at Bank 3,00,000 A Sundry Debtors 1,95,000 8 Less: Provision for Bad Debts 5,000 | 1,90,000 c 13,00,000 | stock 3,00,000 Geditors 2,00,000 | Fixed Assets 7,10,000 75,00,000 [1i5;00;000 ‘On the above date they dissolved the firm and following amounts were realised: Fixed Assets © 6,75,000; Stock 3,39,000; Debtors? 1,35,000; Creditors were paid 1,85,000in fullsettlement of their claim. Expenses on realisation amounted to & 19,000, i i , (CBSE 2019) Pass the necessary Journal entries on the dissolution of the firm. tans Loss ‘on Realisation 55,000. Final Payment: A 7,28,000; BX 2,78,000; C— 2,39,000) 25, Mala, Neela and Kala were in partnershi ‘Vand the Balance Sheet of the firm as at 31st March, 2024 was: ip sharing profits in the ratio of 7: Lables [Assets Gopal Ales Building Mas 12410 Plant ela AS Goodwill fala 80,620 | 1,01,680 | Patents Cred 11,210 | Softwares 0,000 | Stock Peserve for Depreciation on Plant Debtors Bank | ese 1,32,890. EE —— f dissolution we We he partnership as 0" 3st ma Lees the terms cl fon were— Was agreed to dissolve the mount of 1,500. (@) Mala to take over the Building at 2 ee ake infer the Goodvil, Stock and Debtors at book value, usiness: the Creditors. 2 Ne ha 5 ‘! a Show oe hanes recording the dissolution aa brings in—X 29,730 Neela brings in—¥ 48,160; [Ans.: Loss” Realisation—* ‘Kala receives—® 79,100; Total of Bank Account— 79,100.) @ scanned with OKEN Scanner7.60 Double Entry Book Keeping—CBSE XII 26. Mike and Ajay are partners sharing profits and losses in ratio of the capitals. They decided to dissolve theiy firm on 31st March, 2024, the date on which the Balance Sheet stood as under: Liabilities 7 | Assets ? Capital Acs: Sundry Assets 163000 Mike 6,00,000 Cash sn000 Ajay 4,00,000 | 10,00,000 ‘Workmen Compensation Reserve 1,00,000 Creditors 2,00,000 Bills Payable ‘60,000 Others 3,40,000 17,00,000 Following additional information is given: Sundry assets realised % 14,00,000 and the liabilities were discharged as follow: (i) Creditors due on 31st May, 2024, were paid at a discount of 3% per annum. (ii) Bills Payable were discharged at a rebate of € 1,000. i) Workmen Compensation Claim of % 40,000 was met. (iv) Expenses of dissolution amounting to % 30,000 were paid. You are required to prepare: {a) Realisation Account. (b) Partners’ Capital Accounts. [Ans.: Loss on Realisation— 2,58,000; Final Payment: Mike—R 4,81,200 and Ajay—R 3,20,800.) 27. Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2024 at which date their Balance Sheet stood as: Liabilities X | Assets i z Capital Acs: Building 45,000 Bale 50,000 Machinery 15,000 Yale 40,000 | 90,000 | Furniture 12,000 General Reserve 8,000 | Debtors 8,000 Loan by Bale 3,000 | stock 24,000 Creditors 14,000 | Bank 11,000 1,15,000 (a) The assets realised were: Stock & 22,000; Debtors & 7,500; Machinery & 16,000; Building ® 35,000. (b) Yale took Furniture at & 9,000. (0) Bale agreed to accept & 2,500 in settlement of his Loan Account. (d) Dissolution Expenses were % 2,500. Prepare the: (i) Realisation Account; ) Capital Accounts of Partners; (iii) Loan by Bale Account; (iv) Bank Account. [Ans.: Loss on Realisation 16,500; Amount Paid to Bale— 45,750; Yale— 26,750; Total of Bank Account—X 91,500] @ scanned with OKEN ScannerChapter 7 - Dissolution of a Partnership Firm 7.61 Meena and Nanda deci yp. ShilPa lecided to dissolve jatio was 3:2: 1 and their Balance Sheet eal ‘on 31st March, 2024. Their profit-sharing BALANCE SHEET OF SHILPA, MEENA AND NANDA as on 31st March, 2024 iebites [Assets z Capital Wis and 81,000 shiipa 80,000 Stock 56,760 Meena 40,000 | 1,20,000 | Debtors 18,600 Bank Loan 20,000 | Nanda’s Capital 23,000 editors 37,000 | Cash 10240 provision for Doubtful Debts ot General Reserve 12,000 1,90,200 190,200 Itis agreed as follows: stock of value of € 41,660 is taken over by Shilpa for € 35,000 and she agreed to P2¥ bank loan. The remaining stock was sold at ® 14,000 and debtors amounting to € 10,000 realised % 8,000. Land is sold for & 1,10,000. The remaining debtors realised 50% at their book value, Cost of realisation amounted to 11.200. There was a typewriter not recorded in the books worth of 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account, Partners’ Capital Accounts, and Cash Account to lose the books of the firm. (NCERT, Modified) [Aans.: Gain (Profit) on Realisation—X 20,940; Final Payments: Shilpa—X 81,470; Meena— 50,980; "Amount brought in by Nanda— 17,510. Total of Cash ‘Account 1,64,650.] 1d losses in the ratio of 3 : 2, On 31st March, 2024, their 28, And B are partners in a firm sharing profits an Balance Sheet was as follows: BALANCE SHEET.as at 37st March 2024 Libilties =| Assets zg Ceditors 738,000 | Cash at Bank 71500 Loan by Mrs.A 10,000 | Stock Loan by B 15,000 | Debtors Reserve 5,000 | Furniture As Capital 10,000 Plant Bs Capital .000| 18,000 | Investments Profit & Loss A/C a £26,000 st March, 2024 and both the partners agreed to the following: an agreed value of 8,000: He also agreed to settle Loan by Mrs. A. The firm was dissolved on 31 (@) Atook investments at das: stock—® 5,000; = 1,600. 0 in full settlement ofthe Capital Accounts ‘and Bank Account. en Iptors-—¥ 18,500; Furniture—& 4,500; Plant—& 25,000. 1b) Other assets realise pa (0. Expenses of realisation came f° (@) Creditors agreed to accept 737,01 Fi aims. Prepare Realisation Account, Partner tans.:Losson ealsatlon—€ 6,600; At be pal 6,540; Bto be paid 4,360; 2 Total of Bank Account—R 64,500) @ scanned with OKEN Scanner7.62 Double Entry Book Keeping—CBSE XII 30. Balance Sheet of P,Q and A as at 31st March, 2024, who were sharing profits in the ratio of 5: Liabilities @ | Assets = Creditors 40,000 | Cash at Bank 40,000 Loan from Bank 30,000 | Stock 19000 General Reserve 9,000 | Sundry Debtors 42,000 ' Capital Aves: Less: Provision for Doubtful Debts 40,000 P 44,000 Building 40,000 Q 36,000 Plant and Machinery 40,000 R 20,000 | 1,00,000 1,79,000 179.000 The partners dissolved the firm. Assets realised—Stock € 23,400; Debtors 50%; Building and Plant and Machinery 10% less than their book value. Creditors were settled for & 32,000. There was an Outstanding Bill of electricity 800 which was paid, Realisation expenses ® 1,250 were also paid. Prepare Realisation Account, Partners’ Capital Accounts and Bank Account. {Ans.: Loss on Realisation— 16,650; Amount Payable to P—% 39,750; Q— 33,450; R—Z 19,150; Total of Bank Account—¥ 1,56,400) 31. Ashu and Harish are partners sharing profit and losses as 3 : 2. They decided to dissolve the firm on 31st March, 2024. Their Balance Sheet on the above date was: Liabilities =| Assets t Capital Alcs: Building 80,000 Ashu 1,08,000 Machinery. 70,000 Harish 54,000 | 1,62,000 | Furniture 14,000 Creditors 88,000 | Stock 20,000 Bank Overdraft 50,000 | Investments 60,000 Debtors 48,000 Cash in Hand 8,000 300,000. 3,00,000 ‘Ashu is to take over the building at € 95,000 and Machinery and Furniture is taken over by Harish at value of € 80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank overdraft, Stock and Investments are taken by both partner in profit-sharing ratio. Debtors realised for ® 46,000, expenses of realisation ‘amounted to € 3,000. Prepare necessary Ledger Accounts. (NCERT, Modified [Ans.: Gain (Profit) on Realisation— 6,000; Final Payments:: ‘Ashu— 56,600. ‘Amount brought in by Harish—X 5,600; Total of Cash Account—X 59,600] 32. A, Band C were equal partners. On 31st March, 2024, their Balance Sheet stood as: iabili =| Assets z : — 50,400 | Cash 3,700 pene 12,000 | Stock 20,100 General Reserve S08 oa ae 40,000 Loan toA 10,000 4 25,000 Investments 16,000 2 15,000} 80,000 | Furniture 6,500 c Building 23,500, 142,400 [42400_ @ scanned with OKEN Scanner@ at this value. ) oO @ @ Expenses of realisation paid were Chapter 7- Dissolution of a Partnership Firm 7.63 The firm was dissolved on the wing term: : issolved on the above date on the follo jing terms: 31,300. Creditors allowed discount of & 800. A post-dated cheque for & 1,500 under discount was dishonoured as the acceptor had become For the purpose of dissolution, Investm: s ut te oe ion, Investments were valued at 18,000 and A took over the Invest ment: Fixed Assets realised % 29,700 wh ised % 80,000. y lereas Stock and Debtors real lisec insolvent peo unable to pay and hence the firm paid the bank. Pret cco y cone rowing hov pa unt, Partners’ Capital Accounts and Cash Account showing how the accounts would finally be settled among the par rtners, (Ans.: sat [Ans.: Loss on Realisation—z 3,000; Cash paid to A, B and C— 25,000; % 28,000; % 18,000 respectively. Total of Cash Account—Z 123,400.) Michael, Jackson and John are in partnership sharing profits and losses in the proportions of 1/2, 1/3 and 33. 1/6 respectively. On 31st Mi ee spe y. ist March, 2024, they decide to dissolve the firm. On this date the Balance Shest lit z | Assets t Gedtors “40,000 | Cash at Bank 3,000 Provision for Liability 5,000 | Stock 50,000 ‘Loan by Michael ; 5,000 | Sundry Debtors 50,000 ‘Workmen Compensation Reserve 21,000 } Land and Building 57,000 Capital Acs: Profit & Loss A/c 15,000 Michael 60,000 ‘Advertisement Suspense A/C | 6000 Jackson 40,000 John 10,000 | _1,10,000 1,81,000 181,000 a liability under a suit for damages is settled at € 20,000 25 ‘against € 5,000 During the realisation process, provided for in the books of the firm. Land and Building were sol 7 42,000 respectively. The expense: There was a car in the firm, which was also agreed to pay Outstandi Prepare Realisation Account, Partners’ [Ans.: Loss on Realisation id for € 40,000 and the .s of realisation amo! ing Salary of € 20.0 written off from the books. ‘Capital Accounts and 61,200; Cash pai ‘Cash brought in by John firm sharing prof 15 and losses Stock and Sundry Debtors realised € 30,000 and unted to & 1,200. Itwas taken by Michael for % 20,000. He 100 not provided in books. Bank Account in the books of the firm. id to Michael—X 29,400; Jackson—X 19,600; nn_—& 200, Total of Bank Account—X 1,15,200.] in the ratio of 3: 2. On 31st March, Prashant and Rajesh are partners in 2 2024, their Balance Sheet was: abilities ‘ASE. zt Bank Overdraft Cashin Hand % 000 Genel Reserve Sa - 10,000 Sundry Debtors 7 {hstments Fluctuation Reserv® partprovsin forDoubtul Debts _2000 | 24000 any Prashant Investments =} 40000 eee stock 10,000 — Furniture 10,000 Building 60,000 Rajesh’s Capital 30,000 1,90,000 @ scanned with OKEN Scanner7.64 Double Entry Book Keeping—CBSE XII 35. On that date, the partners decide to dissolve the firm. Prashant took Investments at an agreed value of 35,000, Other assets were realised as follows: Sundry Debtors: Full amount. The firm could realise Stock at 15% less and Building was sold at & 1,00,000, Compensation to employees paid by the firm was € 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. {Ans.: Gain (Profit) on Realisation—X 45,500; Payment to Prashant—R 75,900; Rajesh—R 10,600; Total of Bank Account—R 1,60,500} 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 z Assets z Creditors 80,000 | Cash/Bank 6,000 Loan by Naresh 44,000 | Investments 30,000 Loan by Mrs. Yogesh 42,000 | Debtors 73400 Investment Fluctuation Reserve 8,000 | Less: Provision for Doubtful Debts 4900 69,400 Capital A/cs: Advertisement Suspense A/c 110,600 Yogesh 21,000 Naresh’ 21,000} 42,000 2,16,000 The firm was dissolved on following terms: (@) Yogesh was to pay his wife's loan. (b) Debtors realised % 60,060. (©) Naresh was to take investments at an agreed value of & 26,000. (d) Creditors were payable after two months but were paid immediately at a discount of 15% pa. (©) A Debtor previously written off as Bad Debt paid € 16,670. (f) An unrecorded asset realised & 10,000. Prepare Realisation Account, Partners’ Capital Accounts, Partner's Loan Account and Cash/Bank Account. [Ans.: Realisation Gain—% 13,330; Final Payment to Yogesh—X 14,365; Naresh—Nil; Loan of Naresh transferred to Naresh’s Capital A/e— 43,635; Repayment of Loan—® 365; Total of Cash/Bank A/c—X 92,7301 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 on 31st March, 2024 when the Balance Sheet of the firm is as under: Pst : Sundry Creditors 45,500 | Bank 7,500 Loan by Babu 30,000 | Sundry Debtors 58,000 Capital Ales: Stock 39,500 ‘Ashok 70,000 Machinery 48,000 Babu 55,000 Investments 42,000 Chetan 27,900 1,52,000 | Freehold Property 50,500 Current A/cs: ‘Ashok 10,000 Babu 5,000 Chetan 3,000| _ 18,000 245,500 [245,500 @ scanned with OKEN ScannerChapter 7 Dissolution ofa Partnership Firm 765 ‘The Machiriery was taken by Babu for 4 taken by Chetan at 5,000, Asi was % 55,000. The remaining petal aoe over the Investments and Freehold property realised as follows: -gundry Debtors & 56,500 and st ck & 36,500. Sundry Creditors were settled at @ 1,400 less. An Office Zomputer, not shown in the books of of accounts realised ® 9,000, Realisation expenses amounted t0 % 3,000- prepare Realisation Accoun : P 1, Partners’ Capital Accounts and Bank Account. (nicer, Modified) 31. Pit 1st. ta and Sobha are partners i Partners in a firm, Fancy Garments Exports, sharing profits and I [Ans.: Gain (Profit) on Ro ee 4,400; Final Payments: Ashok—¥ 40,200; Babu—® 16,467. ight by Chetan—& 24,267; Total of Bank Account —® 1,33,7675 losses equally. On Sundry Creditors Aoanby ita 25,000 | Bank oa General Reserve 24,000 | Stock 75,000 Capital Ns Sundry Debtors : ita 90,000 Less: Provision for Doubtful Debts 60,000 sobha 30,000 | 1,20,000 | Plant and Machinery 45,000 Land and Building 48,000 Loan to Sobha 10,000 2,74 000 774,000 The firm was dissolved on the date given above. The following transactions took place: {@) Rita took 25% of the Stock at a discount of 20% in settlement of her oan. (b) Sundry Debtors realised 54,000. (@) Sundry Creditors were paid at a discount of 10%. (@) Land and Building realised € 1,20,000- (@) Rita took the goodwill of the firm at a value of € 30,000. (f) Anunrecorded asset of 6,900 25 givenin settlement of unrecorded liability of € 6,000 in full settlement. @ Realisation expenses were © 5,250. Show Realisation Account, Partners’ Capital ‘Accounts and Bank ‘Account in the books of the firm. tans.: Gain (Profit) on Realisation 1,07-500; Amount paid f0 Rita —% 1,25,750; Sobha—X 95,750; Total of Bank ‘Account—€ 3,21,250.] 1. Last year, conflicts arose due Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3: en ies of disagreements and on ist March, 2024, they dec ided to dissolve the firm. On that 2 ur i date as under: 31st March, 2024 their Balance Sheet was EET OF ARNAB, RAGINL AND DHRUPAD as a BALANCE SH : 50,000 Gedtons Faia 3 1,70,000 estates Loan Less: Provision for Doubtful Debts _20,000} 1,50,000 Drvead Loan stock ae _ fresimet Fluctuation Reseve Investments ae “pital Ales: Building ae pe 2.755000 prof &Loss Account 50,000 Paging 2,00,000 —- Shea 950,000 @ scanned with OKEN Scanner| 7.66 Double Entry Book Keeping—CBSE XII The assets were realised and the liabilities were paid as under: (i. Arnab agreed to pay his brother's loan. (i). Investments realised 20% less. (ii) 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 whi {and the remaining was sold at market price. was 20% less than the book value (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. (Ans.: Gain (Profit) on Realisation—& 43,000; Final Payments: Arnab—R 3,65,800, Ragini—X 1,38,600 and Dhrupad— 1,71,600) 39. Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2:2: 1.0n 31st March, 2017 their Balance Sheet was as follows: BALANCE SHEET OF SRUJAN, RAMAN AND MANAN as on 3/st March, 2017, Capitals: Capital: Manan Stijan 2,00,000 Plant Raman 1,50,000 Investments Creditors Stock Bills Payable Debtors Outstanding Salary Bank Profit & Loss Account On the above date they decided to dissolve the firm. (@) Srjan was appointed to realise the assets and discharge the ‘596 commission on sale of assets (except cash) and was to bear all expenses of realisation. (b) Assets were realised as follows: z Plant 85,000 Stock 33,000 Debtors 47,000 (c) Investments were realised at 95% of the book value. (d)_ The firm had to pay & 7,500 for an outstanding repair bill not provided for earlier, {e) Acontingent liability in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for & 15,000. (6) Expenses of realisation amounting to 3,000 were paid by Srjan, Prepare Realisation Account, Partners’ Capital Accounts and Bank Account. (Delhi and Al 2018) [Ans.:oss on Realisation—X 2,02,575; Final Payments to Srijan—X 98,545; Raman—X 36,970: ‘Manan will bring— 66,515; Total of Bank Account—R 3,08,0"54 @ scanned with OKEN ScanneronthisdteBalancesheetotthemrs 'm Which they dissolved on 31st March, 2024. Part from realisable assetsand outside liabilities showed the following: Raina’s Capital z Meena’s Capital 40,000 (Cr) Profit & Loss Account 20,000 (Dr) Raina’s Loan to the Firm 10,000 (Dr.) 15,000 General Reserve On the date of dissolution of the firm: ie (2)_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. An (9 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. (Ans.: Final Payment to Raina— 10,500; Amount brought by Meena—t 53,500.] Preparation of Memorandum Balance Sheet 41, There are two partners Angad and Raman ina 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 Angad and Raman receive? [Ans.: Final Payments: Angad—R 40,000; Raman—X 30,000.) 42. A,B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2024, 4's Capital and 8'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. n Account, Partners’ Capital Accounts and Bank Account. [Ans.: C will pay 8,000; A will get 22,500 and B 15,500.) Prepare Realis + sharing profits and losses as 7/11th to A and 4/11th to B. They dissolved the 2023. As on that date their capitals were: A & 7,000 and B & 4,000. There were ‘AZ 4,500 and to B € 750. The other liabilities amounted to 5,000. The d actually realised & 24,000. 43. A and B were partner: Partnership on 30th May, also interest due on Loan A/c to assets proved to have been undervalued in the lat Balance Sheet an ing the final settlement between partners. on Realisation —X 2,750; Final Payment: AR 8,750; B—R 5,000] Prepare necessary accounts sho [Ans.: Gain (Profit) i it sf 1,00,000; € 80,000 and F 60,000 respectively 44, ‘April, 2023 with capitals of & 1 laring profits (losses) : 000 during the year. &s ers withdrew & 104 ne Fach of Oe Wed, the creditors ofthe firm stood at € 24,000 on that date and ‘ed 3,00,000 and Creditors were paid % 23,500 in fullettlement On 31st March, 2024, the firm was dssoh Cashin Hand was 84,000. The assets reals of their claims. = 1 workings clearly. ft) on Realisation 1,20,500; Capital as on 315t March, 2024 C8 35,000; Sundry Assets— 1,80,000) ind show you (ans.: Gain (Pro! ' ‘A—¥ 70,000; BX $5,000; Prepare Realisation Account a! @ scanned with OKEN Scanner7.68 Double Entry Book Keeping—CBSE XII 45. Priya, Komal and Rakhi were in partnership sharing profits and losses in the ratio of 2:1: 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash & 5,000) amounted to % 88,000, assets realised % 80,000 (including an unrecorded asset which realised & 4,000). A contingent liability on account of bills discounted % 8,000 was paid by the firm. The Capital Accounts of Priya, Komal and Rakhi showed a balance of & 20,000 each. Prepare Realisation Account, Partners’ Capital Accounts and Cash Account. [Ans.: Recorded Liabilities —X 28,000; Loss on Realisation— 11,000} 46. The partnership between A and B was dissolved on 31st March, 2024. On that date the respective credits to the capitals were A—¥ 1,70,000 and B— 30,000. € 20,000 were owed by B to the firm; & 1,00,000 were owed by the firm to A and ¥ 2,00,000 were due to the Trade Creditors. Profits and losses were shared in the proportions of 2/3 to A, 1/3 to B. The assets represented by the above stated net liabilities realised ¥ 4,50,000 exclusive of % 20,000 owed by B. The liabilities were settled at book figures. Prepare Realisation Account, Partners’ Capital Accounts and Cash Account showing the distribution to the partners. [Ans.: Loss on Realisation— 30,000] 47. X and Y were partners sharing profits and losses in the ratio of 3 : 2. They decided to dissolve the firm on 31st March, 2024. On that date, their Capitals were X— 40,000 and Y—% 30,000. Creditors amounted to 724,000. Assets were realised for % 88,500. Creditors of € 16,000 were taken over by X at € 14,000. Remaining Creditors were paid at € 7,500, The cost of realisation came to % 500. Prepare necessary accounts. [Ans.: Total Sundry Assets—X 94,000; Loss on Realisation—X 3,500; X receives—X 51,900; Y receives—X 28,600) :2, Their respective capitals are in their 48. P.Qand Rare partners sharing profits and losses in the ratio of 3: profit-sharing proportions. On 1st April, 2023, the total capital of the firm and balance of General Reserve are % 80,000 and & 20,000 respectively. During the year 2023-24, the firm earned profit of € 28,000 before charging interest on capital @ 5%. The drawings of the partners are P—X 8,000; Q—X 7,000; and R—X 5,000. On 31st March, 2024, their liabilities were & 18,000. On this date, they decided to dissolve the firm. The assets realised 1,08,600 and realisation expenses amounted to & 1,800. Prepare necessary Ledger Accounts to close the books of the firm. {Ans.: Assets at the time of dissolution—X 1,26,000; Loss on Realisation—% 19,200; Final payments: P— 32,800; Q—R 33,800; R—X 22,200) Scan QR Code for Key Terms and Chapter Summary @ scanned with OKEN Scanner