Chapter-5

Dissolution of partnership firm

1. Vishwas, Vismay and Vikas are The details available are:

partners sharing profits and losses in a) The assets realized as follows:
the ratio of 2:2:1.their balance sheet as Debtors Rs 10,800; Stock Rs 16,000;
on31-3-2014 was as follows: Furniture Rs 6000; Motor van Rs
Balance sheet as on 31.3.2014 15,000; Building Rs 30,000.
Liabilities Rs Assets Rs b) Expenses of realization amounted to
Loan from Cash at 20,100 Rs 600.
vismay 6,000 bank c) Creditors are Bills payable were paid
Creditors 4,100 Debtors 7,000 in full.
Reserve Fund 10,000 Stock 40,000
d) Outstanding Liability of Rs 200 was
Furniture 1,000
Capital: Machinery 10,000 also paid.
Vishwas 40,000 Buildings 20,000 Prepare:
Vismay 20,000  Realisation Account
Vikas 18,000  Partner’s capital Accounts
and
 Bank Account.
98,100 98,100
On the above date, the firm was dissolved. 3. Arun ,kiran and Arjun were
a) The assets realized as follows: partner’s sharing profits and losses
Debtors Rs 6,000, Stock Rs 42,000, equally. Their balance sheet as on31-
machinery Rs 9,000 Building Rs 3-2014 was as follows:
16,000, Furniture Rs 750.
b) Creditors are paid in full Balance sheet as on 31.3.2014
c) Dissolution expenses amounted to Rs Liabilities Rs Assets Rs
1,000. Creditors 12,000 Cash at bank 6,000
Prepare: B/P 16,000 B/R 6,000
 Realisation Account Bank loan 8,000 Debtors26000
Arun’s Loan 22,000 Less:PBD1000 25,000
 Partner’s capital Accounts
Reserve 12,000 Stock 20,000
and Fund Investments 8,000
 Bank Account. Furniture 10,000
Capital: Machinery 25,000
2. Following is the balance sheet of Arun 40,000 Buildings 60,000
Neha, Nisha and Nikki , who share Kiran 30,000
profit and loss in proportion of 1/2 , Arjun 20,000
1/3 and 1/6. They dissolved their firm 1,60,000 1,60,000
on 31.3.2014. On the above date, the firm was dissolved.
Balance sheet as on 31.3.2014 a) The assets realized as follows:
Liabilities Rs Assets Rs B/P Rs 5,000, debtors Rs 23,500,
Creditors 12,000 Bank 11,000 Stock Rs 18,000, machinery Rs
Bills payable 5,000 Debtors 8,000 20,000 Building Rs 75,000,
Neha’s loan 8,000 Less: PBD 400 7,600 b) Investments were taken by kiran at Rs
Stock 12,400
10,000 and Furniture was taken over
Capital: Furniture 5,000
Neha 20,000 Motor van 15,000 by Arjun at Rs 8,000.
Nisha 15,000 Buildings 25,000 c) All the Liabilities were paid in full.
Nikki 10,000 d) Dissolution expenses amounted to Rs
2,500.
Reserve fund 6,000

76,000 76,000
 Prepare:
 Realisation Account
 Partner’s capital Accounts
and
 Bank Account. Balance sheet as on 31.3.2014
Liabilities Rs Assets Rs
4. Mohan, Nagaraj and Prakash are Creditors 60,000 Cash at
partners sharing profits and losses in B/P 18,000 bank 30,000
kavya’s 40,000 B/R 24,000
the ratio of 4:3:2.their balance sheet as
Loan Stock 40,000
on31-3-2014 was as follows: Reserve Debtors 80,000
Balance sheet as on 31.3.2014 Fund 36,000 Motor car 20,000
Liabilities Rs Assets Rs Capital: Investments 30,000
Creditors 25,000 Cash 9,000 Kavya 90,000 Furniture 26,000
B/P 17,000 Debtors 27,000 Kavitha 60,000 Machinery 60,000
Prakash’s 10,000 Stock 15,000 karishma 30,000 P&L A/C 24,000
Loan Investments 5,000
Furniture 14,000
Reserve 18,000 Goodwill 20,000 3,34,000 3,34,000
Fund Buildings 40,000 The following details are available

Capital: a) The assets realized as follows:

Mohan 30,000
Nagaraj 20,000
Prakash 10,000
1,30,000 1,30,000
On the above date, the firm was
dissolved.
a) The assets realized as follows:
Debtors realized 10% less than the
book value, investments realized
20% more than the book value,
Buildings realized Rs 60,000,
Stock realized Rs 12,000, and
Furniture sold for Rs15,000.
b) Goodwill is taken over by mohan
at Rs 15,000.
c) Creditors and bills payable settled
at a discount of 5% each.
d) Realisation expenses Rs 2,000.
Prepare:
 Realisation Account
 Capital Accounts of Partners
 Cash Account.
Kavya, Kavitha and Karishma are
partners sharing profits and losses in
the ratio of 3:2:1.they agree to
dissolve the firm as on31-3-2014,on
which date their balance sheet was as
follows:
Stock Rs 44,000, Debtors Rs 80,000;
Machinery Rs 66,000, and B/R Rs
20,000,
b) Furniture is taken over by kavya at
Rs 30,000, kavitha took over
Investment at Rs 40,000 and
karishma took over motor car at
Rs 14,800.
c) Creditors and B/P are paid off at
10% less each.
d) Realization expenses Rs 8,000
e) One bill of Rs 2,000 under a
discount was dishonoured and to
be paid by the firm.
Prepare:
 Realisation Account
 Partner’s capital Accounts
and
 Bank Account.
Gagan and Rachith are partners
sharing profits and losses equally.
Agreed to dissolve Their partnership
on 31-3-2014.their balance sheet was
as follows:
Balance sheet as on 31.3.2014
Liabilities Rs Assets Rs c) Machinery was taken over by Abhi at
Creditors 25,000 Cash at Bank 10,000 Rs 12,000.
Bills payable 10,000 Stock 18,000 d) Creditors and B/P were paid off at a
Rachith’s loan 10,000 Debtors 25000
Reserve fund 5,000 Less: PBD 3000 22,000 discount of 5% each.
B/R 5,000 e) Cost of dissolution amounted to Rs 5
Capital: Motor car 10,000 each.
Gagan 40,000 Furniture 12,000 Prepare:
Rachith 30,000 machinery 16,000
 Realisation Account
Buildings 23,000
P & L A/c 4000  Partner’s capital Accounts
and
 Bank Account.
1,20,000 1,20,000
a) The assets realized as follows:
Stock Rs 25,000, debtors Rs 20,000 B/R
Rs 4,000, Motor car Rs 10,000, Furniture Akash, prithvi and sagar are partners
Rs 8,000, and Machinery Rs 15,000 sharing profits and losses in ratio of
b) Creditors are taken over by Gagan at book 1/2, 1/3, and 1/6 .They agree to
value. dissolve their firm on31-3-2014,on
c) Bills payable were paid by the firm at 5% which date their balance sheet was as
discount. follows:
d) Realisation expenses amounted to Rs Balance sheet as on 31.3.2014
2,000. Liabilities Rs Assets Rs
Creditors 10,000 B/R 6,000
Prepare:
B/P 18,000 Cashat hand 6,000
 Realisation Account Bank Stock 20,000
 Partner’s capital Accounts loan 8,000 Debtors26000
and Akash’s Less:PBD1000 25,000
 Bank Account. loan 12,000 Buildings 50,000
Capital: Investment 8,000
Akash 45,000 Furniture 10,000
Prithvi 30,000 Machinery 25,000
Appu ,Abhi and Akash were partners in a sagar 15,000
firm sharing profits and losses in the ratio
of 2:1:1. Balance sheet on the date of Reserve
dissolution. Was as follows: fund 12,000
Balance sheet as on 31.3.2014 1,50,000 1,50,000
a) Assets realized as follows:
Liabilities Rs Assets Rs
Creditors 15,000 Bank 8,000 B/R Rs 5,000, Stock Rs 18,000,
B/P 5,000 Debtors 20,000 Machinery Rs 20,000. Debtors Rs
Appu’s loan 5,000 Stock 25,000 22,500, furniture Rs 8,000.
Akshay’s loan 2,000 Furniture 10,000 Building Rs 60, 000, Investment
General reserve 4,000 Machinery 15,000 Rs 10,000.
P&l A/c 2,000 b) All liabilities were paid in full.
c) In addition, one bill of Rs 3,000
Capital:
Appu 20,000 under discount was dishonoured
Abhi 15,000 and had to be taken over by the
Akash 10,000 firm.
d) Cost of dissolution amounted to
78,000 78,000 Rs 2,500.
a) The assets realized as follows: Prepare:
Debtors realized 10% less and Stock  Realisation Account
realized 10% more than the book  Partner’s capital Accounts
value, and
b) Furniture was taken over by Appu at
 Bank Account.
an agree value of Rs 8,000.
 Balance sheet as on 31.3.2014
The following is the balance sheet Liabilities Rs Assets Rs
of Hari, Giri and Suri as on Creditors 40,000 Cash at hand 10,000
31.3.2014. B/P 10,000 B/R 10,000
Balance sheet as on 31.3.2014 Suma’ Stock 30,000
loan 20,000 Debtors 45000
Liabilities Rs Assets Rs Meen’s Less:PBD5000 40,000
Creditors 2,400 Cash 2,000 loan 10,000 Motor car 20,000
B/P 5,400 Bank 4,000 Capital: Investment 20,000
B/R 4,000 Veena 60,000 Furniture 10,000
Stock 8,000 Meena 40,000 Machinery 20,000
Capital: Debtors 3,000 Reena 30,000 Buildings 50,000
Hari 10,000 Less PBD 300 2,700 P&l A/c 15,000
Giri 11,000 Land& Reserve
Suri 6,200 building 12,000 fund 15,000
Furniture 1,400
2,25,000 2,25,000
P&L A/c 900
a) Assets realized as follows:
Stock Rs 25,000, Machinery Rs
35,000 35,000 15,000, Debtors Rs42, 000,
The firm is dissolved. On the above date. Furniture Rs 18,000.
i. The assets realized are as follows: b) Veena took over Buildings at Rs
a) B/R Rs 3,850 60,000. Meena agreed to take over
b) Debtors 5% less then book value. motor car at Rs 25,000 and Reena
c) An Unrecorded asset realized Rs took over Investment at Rs
150. 15,000.
ii. Suri took over land and Building at c) Creditors and B/P were paid off at
10% more than book value. 5% discount.
iii. Bills payable are taken over by Hari. d) Suma’s Loan was paid off by
iv. Expenses of realization are Rs 450. veena at book value.
Prepare: e) Realization expenses amounted to
 Realisation Account Rs 5,000.
 Partner’s capital Accounts Prepare:
and  Realisation Account
 Bank Account.  Partner’s capital Accounts
and
 Bank Account

Ajay, Abhay and Adithya are partners

Veena, Meena and Reena are partners
sharing profits and losses in the ratio of
2:2:1. They agreed to dissolve their firm
on 31.3.2014 on which date Balance sheet
was as follows:
sharing profits and losses in the ratio
of 1:2:1.their balance sheet as on31-3-
2014 was as follows:
 Balance sheet as on 31.3.2014 Balance sheet as on 31.3.2014
Liabilities Rs Assets Rs Liabilities Rs Assets Rs
Creditors 10,000 Cash 5,000 Creditors 50,000 B/R 10.000
B/P 6,000 Debtors 15,000 B/P 20,000 Cash at bank 25,000
Bank O/D 4,000 Stock 18,000 Bank Loan 10,000 Stock 30,000
Aditya’s 5,000 Furniture 12,000 Debtors 40,000
Loan Machinery 20,000 Reserve 15,000 Buildings 50,000
P&L A/c 8,000 Buildings 50,000 Fund Motor car 20,000
Goodwill 10,000 Investments 10,000
Capital: Capital: Furniture 20,000
Ajay 42,000 Ganga 60,000 Machinery 20,000
Abhay 35,000 Yamuna 40,000
Aditya 20,000 Kaveri 30,000
1,30,000 1,30,000 2,25,000 2,25,000
On the above date, they decided to a) Assets realized as follows:
wind up the business. Stock Rs 30,400, B/R Rs 9,000,
a) Debtors realized less10%, Machinery Rs 15,000, Debtors Rs
Stock realized 10% more, and 42,600, Furniture Rs 18,000.
Building ealised Rs b) Ganga took over Building at Rs
62,000.Vehical which was 60,000, Yamuna agreed to take
unrecorded realized Rs 4,000. over motor car at Rs 26,600 and
b) Furniture was taken over by kaveri took over Investments at
Ajay at a valuation of Rs Rs 10,000.
9,000. c) All the liabilities were paid in
c) Creditors to be settled at 10% full.
less and interest on Bank O/D d) Realisation expenses were
due Rs 500 also to be paid off amounted to Rs 5,000.
d) Mr.Aditya took over his Prepare:
wife’s loan  Realisation Account
e) Dissolution expenses  Partner’s capital Accounts
amounted to Rs 3,000. and
Prepare:  Bank Account.
 Realisation Account
 Partner’s capital Accounts
and
 Cash Account.

Ganga, Yamuna and kaveri are

partners sharing profits and losses
equally. They agreed to dissolve their
firm as on31-3-2014, on which date
the balance sheet was as follows: