ee Realisation A/c D yo Bank Ale Pi stock accepted by Creditors and the balan paid in Cash) ee @@ [Aman's Capital A/c = Harsh's Capital A/c oe To Realisation A/c e (Cransfer of loss on realisation) ————— VERY SHORT ANSWER QUESTIONS (Questions Carrying 1 Mark) Famembering (Knowledge based) Q. 1. What is meant by dissolution of | partnership firm? ‘Ans. As per Indian Partnership Act, ““Dissolution of firm means termination of partnership amongst all the partners of the fim’. Thus, the business of the firm terminates and there is an end to the life of the firm Q.2. Give two circumstances under which a partnership firm is dissolved. ‘Ans. (i) When all or all but one partner of the firm become insolvent. (ii) When business of the firm becomes unlawful. Q. 3. What is meant by dissolution of partnership? ‘Ans. Dissolution of partnership refers to the change in partners. The firm continues its business. Q.4. Give two circumstances under which a partnership is dissolved. Ans, (j) When there is a change in profit sharing ratio of an existing partner. (ii) On admission/retirement or death of a partner. Q.5. On dissolution of a firm, out of the proceeds receiv who will be paid first of all. : : Ans. First of all, outside (Third-party) debts of the firm will be paid. Q.6. On dissolution of a firm, out of the proceeds received from the sale of assets who will be paid last of all? Ans. Partner’s Capital. Q.7. Why is Realisation. Account prepared? ership firm to find Ans. A ‘Realisati in’ is opened on dissolution of 8 PAN ship firm t Ar alos on realisation of assets and payment of liabilities. Q.8 On dissolution of a firm, where =r gssets shown in the balance sheet transferred? ‘Ans. On the Debit side of Realisation Account. the existing relations of the ‘ed from the sale of assets Scanned with CamScanner-— = ——— = ARAL -cion ofafon whricash in band steed? 9, ‘Ans. On the Debit side of Cash Account. 0.10 Incase of atton where ene REEMA CUM ng losses transferred? : ‘Ans. tn the Partner's Capital Accounts in their profit sharing ratio, solution of partnership firm, where isthe Q.11 In the event of dissolutos roi doubeful debes transferred?” 0 fy ‘Ans. On the Credit side of Realisation Account 12. On dissolution of a partnership frm, where is Profit OF loss on ray transferred? ‘Ans, Inthe Partner's Capital Accounts in thei profit sharing ratio, @.13 On doen wt ary passed ia pane underakes to mak pen, of a liability of the firm? ‘Ans, Realisation Ale Dr. To Partner's Capital Alc Q. 14. On dissolution of firm, what entry is passed for payment of an lability? Smsconey ‘Ans, Realisation Ale Dr. To Cast/Bank Ale 15, On dissolution of fim, what payment is made firs from the personal assets of 2 partner? ‘Ans, Private debts ofthat parmer. Q.16. On dissotution of a firm, what entry is passed on making payment of . realisation expenses by a partner? Ans, Realisation A/e Dr. To Partner's Capital Ale Q. 17. How will the Realisation Account closed, ifit discloses a loss? ‘Ans. It is closed by transfering to the debit side of partner’s capital accounts in their profit sharing rato, Q. 18. On fimm’s dissolution, which account should be prepared at the ast? ‘Ans. Cash/Bank Account. Q.19. On firm's dissolution, what entry will be made on realisation of goodwill ‘which was shown in Balance Sheet? ‘Ans, Cash Bank Ale Dr. To Realisation A/c e Q 20. On firm’s dissolution, what entry will be passed when a partner voluntarily ives his personal aset to firm's creditor as payment? ‘Ans, Realisation A/c Dr. To Partner's Capital A/e .23. How is disoltion of prsenip diene fom se firm? (CBSE Sanpe Paper. 2018 ee 24 Distinguish between ‘Disoluion of Putoeiy’ and ‘Diwluion of Parinership Firm’ on the basis ofclosueofboks (CBSE 019 Realy Ans. It does not require closure of tots} tare fe osncen} et eit Jeusitr oth ni sams wel Q.25. Distinguish between ‘Dissolution of Parmership’ and ‘Disolution of Partnership Firm’ on the basis of Courts intervention. : (CBSE 2019; MP) 0.26, Distinguish between Partnership Firm’ on the and Di ‘Ans. Difference between Dissolution of artes? Firm: ‘Disohon of Patentp! ant “islson of peso Ernie RA a ng slo of atesip Scanned with CamScannerTerisashp ween te | Ezononic atoning connie ltrs hush | PAADES comes to an ont ME changed form. 1.27. pifferentiate between dissolution of partnership and dissolution 07 cm Cet of aes BS, (CBSE 2017, Cony, Ans, 2-28. Disinguish berveen ‘Dissolution of Parmership’ and “Dissolution of Partnership Firm” onthe basis of seitlement of Assets and Liab ; (CBSE. 2019, Kerdy 0.29. Does the change in profit sharing ratio result into dissolution of the Partnership fim? Give reason in support of your answer. (CBSE. 2017, Compt) ‘Ans No, Change in profit sharing ratio does not result into dissolution of ertoesip fim sit res ina change in the exiting agreement leading > ‘the reconstitution of the firm. a : 0.30. Change in Profit Sharing Ratio amo q erst i i amounts to dissolution of partnership cc ‘arnership fem? Give reason jn support of your answer i ; (CBSE. 2017, Compt) Ans, Change in Profit Sharing Ratio amounts to Dissolution of partnership and 9 lution of firm as the existing agreement comes to an end and the fimd continues under the new agreement 31. Give one disinton ca between reconstituion of a firm and dissolution of # ‘Am In case of cissoltion ofa partnership (i.e + Feconstitution of a firm) the fim Continues, while incase of dnsoluion ofa em fe tenes doe 2 firm, its business is discontin niece. sie one distinction between Revaluation Account and Realisation Act0U” pssOLUTION OF APARTNERSHuP mye wos On disolton what enty is pasedira, valued 710,000 at £6,000? *PAMEaesveran ase oft im An. Partner's Capital Ae To Realisation Ale P6000 ‘taken over. ‘reduced by the vale ofthe aset 0.35. When alsblty i tobe discharged by a i ee oa part why isis Capital Account amount of lability assumed. (Q. 36, Do you think thatthe loan by a parte is transfered to Realisation Account atthe time of dissolution ofa frm? Why? ‘Ans. No, itis not transferred to Realisation Account because its payment is made after the payment ofall outside liabilities. 0.37, Do you think thatthe lan by a partners lative is wansired to Ralston ‘Account atthe time of dsahuion oa i? Why? ‘Ans, Yes it is transferred to Realisation Account beans it isan ouside ity 0.38. At which value the assets against which provisions exit are uated to Realisation Account? ‘Ans. Assets against which provisions exis ar tanseredto Reason Acoutat ross value 39, Whats the treatment of provisions aginst sts on disluson af fim? Ans, Provisions against assets re credited to Reason A 040, What entry is passed when an asset is given wa Credtor in fil emer of his dues? Ans. No Entry, e Q.41, State the eason why a pater’ wife oan ‘Ans, Wife Loans an ouside lili 42, why partners loan not transfered to Resissin AP ‘Ans, Partners' Loan is not an outside ail is transfered Realisation Ac? ‘Scanned with CamScannerDISSOLUTION OF APARTNERSH ray, caja ie ate nom % “When a Creditor takes - to him in full settlement of his clair ‘Ans Nort in the Bak pensation Reserve shown in the Balance Shee re ompenatin Reserve 10 the exten of ibility 5 Crd Ans, Workmen Conensine remaining amount of Workmen Compensaign eer Fermat's Capital Ves in their profit shering Reserve is Ceted 1 he oats a Reserve is Cn yon account of Workmen Compensation, the exe trea isceindt Pats Cail NS ald you teat Employees Provident ‘on the ibility sige eer er pt athe Gne of essoltion of artoership frm and why? loves Provident Pund i ibility the employees. Hens, it wile A Ee eet side of Realisation Account and will be paid of. Application based .46.0n dissolution ofthe firm parte A demands tat his loan of ©1000 ‘Should be paid before payment of Capitals of the partners, whereas farmers B and C demand that Capitals should be paid before the payment of {fsloan. Stat the order of payment. “ans As per Section 48 of the Indian Partnership Act, 1932, partner's loan i paid tele the payment of partner's Capitals (9.47.4 and Bare partner infirm sharing profits in the rato of 3:2. Mis. A has fiven a loan of €20,000 to the frm and the firm also obtained a loaa of £10,000 fiom B, The frm was dissolved and its asets were realised fer 25,000, tate the onder of payment of Mi. 4's Loan and B's Loan with reason if there were no creditors ofthe fim. ‘ans. AS per Section 48 of the Indian Partership Act, 1932, Mrs, 4's Loan of 20,000 willbe pai fist and after that B's Loan will be paid upto the avilable amount of €5,00. . 48.0n dissolution of fim, is Balance Sheet revealed toal creditors €50,000; Total Capital 24,000; Cash Balance £3,000, Is assets were realised at 12% les. What will be loss on realisation? ‘Ans. 211,400 49, 0 dissolution ofa fim, Sundry Creditors amounted to €8,000. These We? ‘id ata scoun of 5, What ety wl be passed? ‘Ans Realisation Ale De. 7,600 “To CashiBank A/e 7.600 @50,On dissolution of firm, there was an Unrecorded asset of €2,000 which Wa taken overby a partner at 82500, What entry willbe passed? Ans, Paris's Capital Ae Dn 2500 “To Realisation Ale . 2,500 0-51 olution will be made? ral payne oapaatasien Dit tlaes of Cail Acco 49g at £43,000; Firm's asst taken oer by hm rey gig PO ali pas. £12,000 sf otal assets are €2,00,00; ttl abi 0 ETC of asst is 1,75 000 and rea sation 40.00; amount else on the profit oF loss on realisation? 5 £500, wt willbe ans. boss £28,000 In the Balance Sheet Total Debtors . 4 Ft Debs pen 150 an Pen Debtors, ifbad debts amount to 210,000 and a discount of 5% remaining debtors are realised at “Ans. £38,000 54, There was 2 contingent Lily for BR received fom Ack fr £2000 and 5% jscounted with the bank. Astokbecane inlets 8 ic roe ‘were received from his estate. How much amour will be debited ts Realisation Account? ‘Ans. Debit £20,000 and Credit €15,000, (q.56.How much amount willbe paid o ret for £25,900 i 5900 of te } 5 Creditors are not to be paid and the remaining creditors aged to accept 5% less amount? ‘Ans. £19,000 i iswbe paid 56, P, a partner, is to bea all expenses of realisation for which he is (0-56 000. P had to pay realisation expenses of €2.500. How mich amount wil be debited to Realisation Account? ‘Ans, §2,000 a ch amount wil be pai to 4, fis opening capitals 0. Ae haa reat panos o C1Q00 anes len ee ‘valuing ®25,000 from the fim? ‘Ans, €1,85,000 fnestments vad 2,000 we (58, Total creditors amounted to £50000. ness Wi ‘not shown in the books. One ofthe ereditos tok ve 7st full satisfaction of his debt of €2,20,000. Remaining creditors discount. Pass entry for payment. = Ans. Realisation A/c De A 266,000 ‘To CashBank Ale inal is U.S Q.59, If creditors are €25,000, capital ‘what will be the amount of sundry ‘Ans, 21,65,000 5,000 ad cash ble i 10000 EE Scanned with CamScannerDISSOLUTION ¢ Capitals of partners are A €3,00,000, B €2,00,000 and C &1,09,o99, ni ee rng yea 4 SD 00, B C4000 and C30 9) tr ving ; so et aie hal ete AUN Of Oe ig ‘Ans. &5,40,000 and total abilities are €2,40,09 61. IF toa assets ofa firm are €12,00,000 and toa 4,000, vi oer cata of P.O and Riftbey shae profits in he rato ofthe apie, and profit sharing ratio is 1=2:3 ‘Ans, P€1,60,000; 0 23,20,000; R €4,80,000 62. Atthe time of dissoltion of firm, Creditors ae €70,000; Partner's capi tig £21.20,000; Cash Balance is 10,000. Other assets realised 71,50,000, What willbe the ProfivLoss in the realisation account? ‘Ans. Loss £30,000, Q.63. On dissolution ofa firm, debtors £17,000 were shown inthe Balance Sheet, ‘Out of this £2,000 became bad. One debtor became insolvent. 70% were recovered from him out of €5,000, Full amount was recovered from the balance debtors. On account ofthis item, what willbe the loss in realisation account? ‘Ans. £3,500 64. On dissolution ofa firm, a partner's capital account has a credit balance of 42,000. His share of profit in realisation account is £9,000. He has paid firm's realisation expenses £3,000. How much amount he will finally get? ‘Ans. €54,000 Q.65, Creditors amounting to £80,000 ar transfered to Realisation Account. What entry willbe made on ther payment if 210,000 ofthe creditors are not to be paid and the remaining creditors agreed to accept 20% less amount? ‘Ans. Realisation Ale Dr. 56,000 To CashvBank Ale 6,000 Q.66. LFtotal assets ofa firm are €6,00,000 and total bilities are €1,80,000, what ‘will the capitals of P, Q and Rif they share profit in the ratio oftheir capitals and profit sharing ratio is $= 4:3. ‘Ans. P€1,75,000; 0 81,40,000; & €1,05,000 0.67, On the basis of folowing data, how much final payment will be made to # partner on firm's dissolution? Debit balance of Capital Account €5,000; Share of his profit on realisation 228,000; Firm’s asset taken over by ‘Ans. £17,000, 0.64 toa ass ae £5,000; ables re 2,00; amount eae le of ases i 830,000 and realisation expenses are €2,000 wt Wil the profit or los on ealsation? rams a $208 ‘Ans, Loss €1,92,000 0 WE 9. opening capitals of partners are 4g, - 1 Od their drawings during the Yr ase Bota ces ‘month and C 25,000 per month and eeady®2™ per ‘00000 mount of asses ofthe fim? tr ae Frain ans: €8,36,000 te @.10.0n dissolution ofa fim, 8 Bane Sie General Reserve £200,000, Cretan ime pal t500 059 “Assets were realised at 60%. What wi tele reg 200, ans. £3,12,000 sn? “1. On he basis ofthe following da ow : ‘on firm’ dissolution?” Al me wl mde ioa Credit balance of Capital Account 50,00, . £10,000; Firm's ability taken over by Rn er tao 2 ON ‘Ans. 248,000 Q.7. X, Yand Z are partners ina firm inthe ratio of 4:3 :2. One's finn's total assets ae €71,00, cea a €1500 Reem et are €2,100, Assets realised 15% more th the bok-aue. Craton wee paid 2% more. For profivioss on realisation, 1's capital acou wil te ebited/credited with how much amour? ‘Ans. Y's Account will be credited with £2,700. Q.73. The firm of Ravi and Motan was dissolved on 313.2013. Aecorng the agreement, Ravi had agreed to underake th disabion wor for an aged remuneration of %2,000 and bear all realisation expenses. Disoluion expenses were &1,500 and the same were pid bythe fm. of ison xp. ‘Pass necessary Journal Entry forthe payment ao ac ppc the work of 00 SO 11.2013. Motan was a ato pad £50 MORN pi pocket, Will any Youral Esty ass the entry. If no, give reasom Scanned with CamScanner ene EEawe 5 CC A nase see tae peor oe ine ae 4 ences oes Oe ct ine sr aida Sea Peres ini Prin fx Duel a st ngs at Cg i nt so ns (Q. 77. Sundzy Creditors £2,50,000 and Bills Payable €35,000 have been transfered to the Credit side of Realisation Account. Sundry Creditors were paid at q iscount of 10%, What would be the frther treatment if nothing else ig ‘mentioned? Ans. Realisation Ale Dr. 35,000 To Bank Ale 35,000 Bills Payable paid off) {Q. 78. Dissolution expenses amounting to £6,000 were to be bome by partner X and the balance by the firm. Dissolution expenses amounted to 715,000 and the ‘entire amount was paid by firm. Pass journal entry. ‘Ans. Realisation Ale Dr 9,000 FsCapital Ale Dr, 6,000 ToBank Ate 15,000 (Dissolution expenses pad by the frm and 2°s share debited to his A/c) (0.79. Dissolution expenses amounting to £15,000 were to be bome by partner Vand ‘he balance by th firm. Dissolution expenses amounted to €25,000 and the ‘entire amount was paid by ¥. Pass journal entry. ‘Ans. Realisation Ale Dr. 10,000 To Y's Capital Ale 10,000 (Dissolution expenses paid by ¥) Q.80, In setlement of Tarun's (a Parner) loan of £25,000 tothe firm, a computer ‘ot appearing inthe books is taken over by him at an agreed value of £30,000 ass necessary journal entry. ‘Ans. Tarun’s Loan Ale Dr 25,000 ‘Tarun’s Capital Ale Dr 000 To Realisation A/c 30,000 (Tarun's Loan of £25,000 setled by giving him unecond computer a an agreed of £30,000 pee! ee ee oo ee ose Beg. ON dissolution, the amoun o of ‘Account is €1,00,000. 40% ry. Asay = 6 ofthe s 25% of the remaining were od a ce Raia taken over by Vikas (a pariny sou of 2 bn at boo vale pg ease ‘ans. Bank Alc lt Patent NG ven, To Realisation Ac > (Assets of book value of 249 09 om £48,000 and assets having ten ont 40) 715,000 sold for €12,000) eof Vikas’ Capital vc ‘To Realisation Ale Pe a5.000 (Assets taken over by Vikas at pry ‘sun $2, Fixed Assets appear inthe Balane Om alos of Monnet cllesion Saga 20. ng ‘Ans. Ifnet colle be £104. As such, net amour raled fom fot 6 ie 152,000 = 250,000 (83. Name the ase that isnot tasted ee eof Re but brings certain amount of cash aginst is pal tiene often, ofthe fim. (CBSE mG ‘Ans, Unrecorded Asst. 84. State any two grounds on the tas of wich coat muy on dissolution of partners fm. (CASE 219 Kao ‘Ans. Atthe suit ofa parte, the cout may rr pment rma hd on any ofthe following rods (@ When a partner becomes insane, (i) When a partner becomes permancatly nepal of peng is sa pater. 95, Sa any two contingencies hat may ein Solin SS ™?) Ans Comingsncies that mayest indscson pen (the firm is conte fora fed em ce 7 (4) On the adjudication ofa pane asenisobe 0.86, tate any two stats when frmis come SEE ayy yp) dissolved in he following pra bE are ‘Ans. A firm is compulscily (0 When all the partners al (i) When the business of the fir Scanned with CamScanner aeSOLUTION OF A PARTNERSHIP Fry oe . mag “Q.BT Sate te order of payment of the following, in e886 Of dissoltion gg pee : nae is ue to hiner om he tench pune opr what seo Ni - Oe Eee om capital (es parr os); uy enh pare oporiotly what du 1 im on of api, oi it forte debts ofthe frm to the third parties. S (CBSE. Sample Peper, 2020, (0 fort debs ofthe firm tothe third parties. (ito each partner proportionately what is dv to hier from the firm for , inguished from capital (Ze. partner's loan); di to each partner proportionately what i due to him on account of capital Q.88. p. Q and R were pariners with capitals of €3,00,000, £2,00,000 ang 41,00,000 respectively. On dissolution it was found that there were 600 Gabriel Lid, acquired at cost of €24,000 and had been ‘writen off completely from the books. These shares are now valued at 869 ‘ach and divided among the partners in their profit sharing ratio. Give ‘necessary Journal entry Ans. ©] P'sCapital Ac Dr. Dr. Dr f° om stares vase at £60 each vided Q. 89. B, Cand D were partners ina firm sharing profits and losses in the ratio of 1:4: 5, On 3ist Marc, 2018 the frm was dissolved and on that dae the Balance Sheet ofthe fim showed a loan of £10,000 given by C's brother F C agreed to pay his brother's lan, as necessary jul entry forthe above onthe firm's dissolution. ke (CBSE, 2019, Rajasthan) At the time of dissolution ofa partnership firm, the book value of sndY assets transfered to Realston Account was 82,00,00, 80% of these SY assets were taken by partner A at 20% discount, 40% of remaining assets We sold ata profit of 30% on cost. 5% ofthe balance was found obsolete a4 OLUTION OF A PARTNERSHIP Finny TOR RETR TR (Questions Carrying 3 Mark) 7 Fisembering (Knowledge based} 1. Write the circumstances under which a firms dialed, 2. Clarify the difference between dissolution partnership. ‘3. What isa Realisation Account? ‘4. Mention the order in which the proceeds from the sale of Asses are utilised at the time of dissolution of parneship fim, 5. How will you deal withthe Reason expenses tthe tie of dso of a fim? 6. Explain the accounting treatment a the tine of dsolon ofa pare firm, ofthe assets and lables not already eared ine toks of fim. . What accountng record is made on solution of arte f? Of a fim and diswohion of PRACTICAL QUESTIONS : (Question Nos. 1 to-43 are strictly in the serial order of Mhustrations) ae 1. Manoj and Nand were partners sharing pois in te rao of 2. Pass Journal entries under following situations atthe time ofsolaion ofS (0 Workmen Compensation Reserve stood at £100,000 liability towards Workmen Compensation. . (ip Wenkanen Conponston Reser soo a 10000 il ne of it was acetained at £75 000. (i) Workmen Compensation Reserve stood ofitwas ascertained at 1.20000. (9) Workmen jon Reserve stood at of it was ascertained at €1,00,000. ‘Ans, (i) Dr. Workmen Compensation Res 3:2, at €1,00,00 and ibility in respect oad bit ae serve an Cr. Pe canal a ‘Scanned with CamScanneree a an {ib De Workman Compensation Reserve ard Cx Realisation Ae by &75ap0 tnd Parnes Capital Aes by #2500. (ui) De, Workmen Compensation Reserve and Ct: Realisation aye, ona. (Same a Case id et oree ee lo ere et ta fe eee Vee rd emunia eneea os Q2. (i) Realisation expenses amounting to £15,000 were paid by the fim, 10,000 were to be borne by a parner and the balance bythe fim (cit) Gaus, a partner, was allowed a remuneration of €25,000 and he wast ‘meet al expenses. Firm paid an expense of €5,000. ‘Ans.() Debit Realisation Al and Credit Bank Ne. (i) Debit Realisation Alc and Credit Partner's Capital Ae, (ii) Debit Tushar’ Capital Ae and Creit Bank A/c. {G) Debit Realisation Ale and Credit Suesh's Capital Ale (©) Debit Realisation AZe by £15,000, Debit View's Capital A/e by €5000 and Credit Bank A/c by €20,000. (i) Debit Partner's Capital Ae by £10,000, Debit Realisation A/c by 85,000 and Credit Bank A/c by €15,000. (vi) Debit Realisation A/c by £25,000; Credit Gaur's Capital Ae by 820,000 and Bank Ae by £5,000. Q.3.Pass necessary Journal Entries on the dissolution of a partnership frm inthe following cases : 40 partes, was appointed to look after the dissolution process for which be ‘as given a remuneration of €10,000, (i Dissolution expenses €8,000 were paid bythe partner, M. (i Dissolution expenses were %5000. (@) , parte, was appointed to look afc the process of dissolution fr which he was allowed a remuneration of 27,000, P agreed to bear the dissoiion ‘expenses. Actual dissolution expenses 4,000 were paid by P. (©) N, a partner, was appointed to look after the process of dissolution for which he vas allowed a remuneration of £9,000. 1” agreed to bear the dssliioa ‘expenses. Actual dissolution expenses €4,000 were paid by the firm. piSSOLUTION OF APARTNERSH ~~ (i) Qa partner was appoint ws £18,000 a his remune = Realisation Acc« aad +4 Debit Realisation A and Ge cane! Det Reon Ang ata Bas it Realisation Ae and Cregg HA Potton Ae Bank Aly e409 OB Cen, (oi) No Entry.) “ta Q.4. The following : Stet of 4 aap oft sharing ratios ofthe parmers are 33° S23Ia Mad 28 te is the Balance The partners decided to disolve te fm on an om te of be ne Sheet. Motor Vehicles and Stok wee sald fr eh algo od ad respectively and all Debtors were relied in il Lad & Dale £43,500. Creditors were were €1,250. Prepare Realisation aid off subject to discount of 1,700, Exposes frelon ‘Account, Bark Account and Paes’ Copia Accoun 0 close the books of the firm asa result oft dissluton. {Ans Profit on Realisation £195; Anount uid tA 96910 and 709, Total of Bank Ae €2,64,900}] Hint: Amount realised from Debtor 113,200. Q.5.P, Qand Rare decide to dissolve their stands as under : 1:1 They partners sharing profs andesite rif? firm on 31-43-2018, he deca wich ti Bae Stet [BALANCE SHEET cra 3.052018 Scanned with CamScanneraon onal nfomation Bren ata uken overt) Pato a9 (ipfomz ten ove Qo €20.0. (ir Gt wre pit scout o 5% ‘Stock Debiors Machinery (6) Expenses of realisation amounted to £2,000. repae the necessary ledger accounts to close the books of the fim, [Ans, Loss on Realisation %80,000; Final Payments : P €1,24,000; @ 262, “Amount brought in by R €16,000; Total of Bank A/c €2,94,000,} (1) Nothing i mentioned inthe question about the payment of BP. It will be assumed that fal payment willbe made thereof. mentioned inthe question about the payment of Ps Loan It wil also be pid separate "P's Loan Account. .6.A and B were partners sharing profits and losses as at 31st March, 2018 was as follows : A's Lean @12% pa. ‘General Reserve A's Capital 4,00,000 Bs Capital 2,50,000 Partners decide to dissolve the firm on the above date, Assets and liabilities realised as follows : (0 Plant & Machinery was taken over by 4 at 60% of the book value. (Gi Investments were taken over by B at 120%. (Gi) Sundey Creditors wer paid off by svi aaa en Nera by giving them stock at 75% of the book Yale ssoLUTIO® Pe py Debio ale 2% lef any (0) Aslan Was Pid OF Withee gn (09 Reaistion expenses amounted gg Siow are required to prepare: {a) Realisation Account ~ (6) A’s Loan Account and 2 Loa, () Partner's Capital Accounts ang (@ Bank Account ans. Loss on Realisation 210,00; Fin tl of Bank Account €2,04,00) Ne nt: Poymentto Sindy Credits 60.00, .7. A. Band C were in parser glance Sheet showed the fllowing po then Account MEMO A 80.8 82996 sharing profs in sh Fo nein none seeesn 1 A agreed to ak over fuse 20% edn eka IL. Fixed assets realised €32,000 and stock 55,000. IL. Bad Debts amounted o #500. IV. Expenses of elsaon were €3,0, Cin we pis dicot V. There was a claim of €6,400 for damages agains the frm Ithad to be pid. Prepare necessary accounts. {Ans. Loss on Realisation %55,400; Final payments: 4 86300; BC1LIST; C211,150; Total of Bank A/c ¥1,22,000.] ‘int: Nothing is mentioned in the question abou te yet of ‘ewe assumed that hese wl epi fl. ae ©. 8. X.Y and Z are in parti, aig rtd to dissolve the partnership on 31st ‘March, 2018, ; Sheet ofthe firm was as follows : BP aed Mads Len. Scanned with CamScanner‘yssOLUTION OF A PARTNERSHD FRyg The ass ald er aes renet 2s more: Macey 40 es: Sxk 5000 ma so Bare a ak sles Expres frelon anouted 16 2.90 nary Creo aged eae 57,500 in fllsetlemest Show nce ede ous cls te bootfthe fm. TawsLis ov Reson £570, Final Payments: 101,10; 786100, 438100; Tol of Bak Ae 2.7780 (2 Te follonng waste Bale Shes OFX, Yand Zs at 282.217: “The firm was dissolved on the above date on the fllowing terms: (@ Debiors realized £29,000 and creditors and bills payable were paid st @ discount of 10% (i Stock was taken over by X for €17,000 and fumitue was sold to K for £20,000 (Ui Land and Building was sold for ®2,98,000, (G's loan was paid by a cheque of the same amount (©) Compensation wo workmen paid by the firm amounted to €15,000. Prepare Realisation Account, Capital Accounts and Bank Account {Ans Profit on Realisation €1,49,000. Final Payments : Y's Loan £20,000; Capitals : X €1,13,667; ¥ €1,40,667; and Z €35,666. Total of Bank A/c €3,79,000.) Hin; Ween Compson Rese cies ean A 1500 en tc owe — ins Ee (a), Pritam and Ni 10 (A) fresh deci gate tales Seton ht pe assets were realised 3 follows: Seat y 100; Plant & Machinery 3500, Sn Ret vale. I eta, Creditors allowed a discount of Pritam wa apeed to pay oustanding et. Epes mca Palam and Naresh shared profs andlesine ntneftcree we ally sete. Cs Prepare Journal, Realisation Accom, Cpil Acca cen [Ans Loss on Realisation €1470: Ch pi £15,600; Total of Bank A/c 1,04,800.] it Pin (20 at eh ta: Goodwill and Presi luce wil bed Rain A awl be mde in respect of hese es (Q. 10 ()- Mrs. Rita Chow and Mis Stata pena as Games Exports sharing profs and loses qual. Ot Ag 18 hs ‘Sheet of the firm was as follows ek above. The cond si OMss, Rita Chowahar vdeo PN ‘50 per cent of stock at a Scanned with CamScanner ‘The firm was dissolved on the date give Pace:3. Cash balance of (4200s been oo DISSOLUTION ERSHLO Ry, (GW Book-debis realised £54,000; balance ofthe stock was sold of 3a prof gg Realsed aves: ig, 30 por cent on cost. : 0 a Gi Sundry Creditors were pai out ata discount of 10 percent Bills pays (i) Workers Conpenson Ren, ‘were paid in full. To Realisation Ae by (Plan snd Machinery sealised €75,000 and Land and Buildings %1,20,000, Realisation Ae 0m (©) Mrs. Rita Chowdhary took over the goodwill of the frm ata valuation of ‘ToBank Ae Ss saa Soave Wet Competing" (vi) Realisation expenses were 25,250. side of Cita Accom, 8 Catia 50% ‘Show the Realisation Account, Bank Account and Partner's Capital Accounts i ‘There will be no enty of tend te 1 in wo ty of Sty Ci the books ofthe firm, (0) There wil benoit offing tinea Ans. Profit on realisation %1,32,000; Final Payments :— Rita %1,23,000 ang 2. The following is "BOVE Patines ‘Shobha %1,08,000, Total of Bank A/e €3,33,750,] Out lowing isthe Balance Stew Suan Q. 11, Anurag and Prem were partners sharing profits and loses in 2: 1, On 3st Oi a'e Loon a “March, 2020 ther Balance Shest was 3 follows eto “rae Creditors Bills Payable (Outstanding Expenses Az Capit Bs Capital Invesoneat Fuchaton Reserve Profitand Lass Capitals: "AnD 3,50,000 1, Half the tock was soldat lle tn ek toa Prem 45,000 was taken over by A st 20% more than the book value, = 2. During the course of dsluon a Tb nd arin anges ws settled at €12,000 aginst £1000 ina! ‘The firme was dissolved onthe above date: eS (@ Anurag took over 60% of the stock at a discount of 20%; 25% ofthe Plant & Machinery —€,00,00; Tok —tL 20, Gxt sr ‘remaining stock was sold at a profit of 40% on cost; Remaining stock was 25,000; Bad Debts amounted to 5,000. Half the invesanects were sud at found obsolete and realised nothing. book value (if) Firm had to pay ®90,000 as compensation to workers: 4. A promised to pay off Mrs. 4's Loan and tok away half te investments at 10% discount, (i) Sundry Creditors took over investments in fll settlement. 5. Trade Crodies and ils Pape were don eng tat of nh (6) Sundry Debtors realised at 75% and plant realised 20% les. afer Ist Mach, bt wr puis eTebi x Get | (©) Prem agreed to take over the responsibilty of completing dissolution work per annum, {dhe sa given reas tis omen, Prpare mea es || (vi) Realisation expenses amounted to 710,000. ; {Ans.Profit on Realisation %06,800; Final Paymest °° Prepare Realisation Account 1,14,000; Total of Bank A/c €3,00,00] = moet | [Ans. Loss on Realisation €1,35,000, Mins: 1, Discount received on payment Cres 7 li age tehetm Hints: 2 Discount reseed on apse BF sofbah A (0) Book value of maining 25% stock : 25% of 40,000 - ese bed Scanned with CamScannerBank Bills Receivable ‘Stock ‘Sundry Debtors Less: Provision for Doubtful Debts Land and Buildings Puiture ‘Typewriters Tnvesments ofthe parmers are 3:2: 1. At the above dat, “The poi and los tring ats beside realised were as follows parmners decide to dissolve the fim. The assets “Bills Receivable were realised ata discount of 5%, Debtors were all good Suck teajced £32,000, Land and Buildings realise at 40% higher than the book value. ( Furitare was sold for £6,000 by auction and auctioneer’s commision amounted to £300. (i Typewriters were taken ove by 4 foran agreed valuation of 85,000. (is) Iavesuments were sold in the open market ata price of €25,000, for which a ‘commission of 2% was paid to the broker. (©) Creditors agreed to accept 10% less. Al oer Habiliies were paid off at their book vale, (x9 The firm etrenched their employees three months before the dissolution of the firm andthe firm had to pay €25,000 as compeasation. This liailty was ‘ot appearing inthe above Balance Sheet. ‘Close the books ofthe firm by preparing Realisation Account, Partner's Capital ‘Accounts and Bank Account Ans. Loss on Realisation £8,400; Final Payment to A %56,800; B €41,200 and C £20,600) Hint : Amount realised om Sundry Debio: £40,000. Q. 14. Following is the Balance Sheet of Rami Lal and Panna Lal as at 318 “They decided to dissolve the firm, (@ Machinery 10% less than book vale in {9 Rami Lal sto take over Detos a Debiors were realised for Sto he by (jv) The Bill payable of €2,600 tbe, (0) Creditors ae paid off ata dscouesr ign tty (0) An amount of €2,500 had tobe pai fe (il) The liquidation expenses amounted esp en PC ‘You are required to show the Realist ‘Account Account, Capa oo Ans. Loss on Realisation £3,740; Amout poi oid Pana Lal €12,530; Bank cou Ttl 53 int: Ene amount of Works C easton Account pension Reeve f 110s eee a 0.15, Raman and Richa were purer ina fina 1:3°on31.32018 the Balance Stet oft fon eseeaere = = FL 08 ae [BALANCE SHEET OF RAMAN AND RIGA cat at 3132018 ‘The firm was dissolved on 1.2018 andthe ast and ais weet ‘ 1 of 10% for {i Land and building was taken oer by Rasun t 3 P= aw! of eit (if) Creditors ce ra zapno vik dak as tne PE claim; (li) Remaining creditors were paid by Richt (é) Furniture realised #5000 les tan te (©) Expenses of realisation wer €400 Pass necessary journal nies for dsoson of —_ Scanned with CamScannermene 2,92,880] [Ans Final Payment to Raman €5,66,720 and Richa © tings) repre Relist Al in Working Notes. Ls on Realisation Wi amo, e100, (ioe io Be passed er crit tohing OWE ORK AMF AEH, Ey Femaining eer taken aid by Richa: Realisation Ac De 50,000 To Riche's Capital Ae 0800 (0.16, Verma and Sharma were partner ina frm sharing profits in the ratio o¢ On 31.32018 their Balance Sheet was a follows ¢ BALANCE SHEET OF VERMA AND SHARMA as of 3132018 The firm was dissolved on 14.2018 and the assets and Ii follows (0 Creditors of €50,000 took over Land and Building in full settlement of their claim; (i Remaining creditors were paid in cash; (lid) Machinery was soldat a depreciation of 30%; (t) Debtors were collected ata cost of %500; (») Expenses of realisation were $1,700, Pass necessary journal entries for dissolution ofthe firm. { Ans.Final Payment to Verma %89,850 and Sharma %69,950,] Hints: (Prepare Realisation Alc in Working Notes. It will appear as follows Dr REALISATION ACCOUNT ce 60,000 |By Bank Aic (Assets realised) £80,000 | (£42,000 + £79,500) ‘To Bank Ale (Creditors paid) [By Loss transferred to: 34) 70,000 - £50,000) Verma's Capital Ae 30,150] ‘To Bank A/c (Exp.) 1,700 | Sharma's Capital A‘c 10,050 | , 40,2¢ Be (i) No entry is i a © Nocauyi so eran er redo of €5,000 taking over Land and Building sOLUTION OF APARTNERSHP Fry, (Q. 17. Mala, Neela and Kala wer on ai eos off. The accountan pol OF ecourt, but ere Accoun, ae reicas Yeh rE! Post few amount Pars You are requited 10 complete these belay, ne omy, Po! Aout amounts 2 Sa by Sig cong 7 REALISATION Accouny ° rosin Ane: as Machinery 10900 stock 21000 PS Cats } oa Debtors 20900) eros hea Prepaid tsurnce 4g) | YEON Investments 3,000) Ase sold: f qonitsCapial ve Mi sg roceh—enioyae | a Di it aa “fo Cash —Dishonoured bill pai pial — tess 2090 To Cash— Expenses (eSE m5 Ale) ing Balance of Cais AOS Ans. Loss on Realisation 81,000; Opesag Ban ¥10,000, Neela €15,000 and Kala €2,000) —= Scanned with CamScannerom, of Balance Shee at the Date Diy dele o day 0.184 Band Canter at mod 6 £0 ag a ser ant ive cue of dsaten# rng std Sheet 700. Ae showed stock of 86,000 and reins of TOME se: (265, Susan, Geta and Rashi are partners sharing profits and losses in the rata of 5:32. Their Balance Sheet asa 31st March, 2017, is asunder: BALANCE SHEET OF SUSAN, GEETA AND RASH sat 31st March, 2017, TT eeabities | Amu | Sendky Cris so.) ‘Werkmen Compensation Reserve ‘The partners decided to dissolve their partnership on 31st March, 2017. TRefilloving ranacos k jlae thine of slo: (a) Realization expenses of €2,000 were paid by Susan on behalf ofthe fim. (6) Geeta took over the goodwill for her own business at 840,000. (6) Building was taken over by Rashi at 23,00,000. (2) Only 80% ofthe debtors pad their dues. iret Stand inot e veamngaa Patera (0 Ravi tok over 40% oft stock 20% Ey acest 10 prepare the Realization Account, asc.29 Sve al knrenenees na ta {ns Loss on Realisation 1,08 000 (Wi) Remaining stock was sold free ee Scanned with CamScanner| LUTION OF A PARTNERSHIP Finy ae {Gy Remaining erditrs were ps cn ve forthe above ransations inthe Pooks ofthe fi Pass necessary joural entries f inet im {Ans, (9 Debit Ravi’s Capital Ae and Credit Realisation Ale by 19,200, (i) No Entry. Airy Debit Cash Alc and Credit Realisation Ae PY 222,500. {Debit Reaition Aland Credit Cash Ae by €45.000-] ee ORMATION ED ON INCOMPLETE INFORMATION ‘QUESTIONS BAS! (Gercy as per Sample Paper Issued by CBSE) Brodin E vachsh and Neha were partners ina firm sharing profits and losses in the ratio «4: Thay decided to dissolve he fe on Ist May 2014 Prom the information piven elo cesplete Realisation Ae, Partner's Capital Account and Bank A/c: REALISATION AC By Sundry Liabilities: '5,60,000| Creditors ~on,000| Ashish's wifes loan 55,000) By Bank: © | Machinery = | Debiors By Ashish's Capital Ale: img]. Seek 1,28,000, Typewriter °n, By Neha's Capital Ale ay am 2. Prakash, Kiran and Rishab are . ratio of 3:2: 1. They decided to Parise ina fm hing pos ‘pformation given below “ed see enon tN dst Bank Ae on A, Pare’ Cap nae Scanned with CamScannerSOLUTION OF A PARTNERS Hp A and B decided to dissolve ther firm on Ist January 2019. From the infomation siven below complete the Realisation Ale, Capital A/c and the Bank AJ: REALISATION ACCOUNT ce, pSsOLUTION OF APARTNERS tp 7 aliaton Ale ToRealistion AX (os) 10 Ram, Rahim and Renan were paren 4:15. On 2822019 the fim wes dated reget PO a complete Realisation Account, Capi Acoais Bad Ase ‘To Bank (Payment of Creditors) ‘To Rehman’s Capital Ate > (Realisation Expenses) Scanned with CamScanner5 A.B aod C are partners sharing profits and loses in the ratio of 3: 2:1. They ‘decided to dissolve ther frm on Ist Jan, 2019. Complete the Realisation Account, [Loan Account, Capital Accounts and Bank Account from te information given below: De REALISATION ACCOUNT ce To Sundry Asses Stock Ae $9400 Dette Ae 57,000 Plan nd Machinery Ae 131,100 ‘ToBank Alc abilities pai of) To ‘Scanned with CamScannerom = AiarsCopial ae 4000 ems cpial le _ 3,000 (Assets Taken) To Bank Ae 198,000} 400,000} PARTNER'S CAPITAL ACCOUNTS. 40,000) 4,50,000 By Balance b/d (Balancing figure) By Realisation Ale : (Wife Loan) a Goodwill By Reaistion Ale sha ‘To Kiran's Capital Ale: Realisation Bap 10,000 Expenses) ci Realisation Expeases 2.10) By Realisation Ale ‘To Prakash’ Capital Ale (rofiton ) ‘Wie's Loan 5,00 Realisation) J 5 Contingent ibility Trbill discounted 000 ToBank (Creditors) | ‘To Realisation (Assets realised) Machinery “480,00 Debtors 10,000 -4,04,000] 490,000 534,000] ‘Balancing Figure) By Relation Ae (Credion) ‘By Ashish's Loan A/c. By Ashish Capital Ale By Net's Capital Ae Verification of Missing Figures BALANCE SHEET a 31st March, 2014 mina Scanned with CamScannerpssoLUTIONOF A PARTNERSHIP Fagg Annaver and Hints to Solve Problem 3. (Q) Loss on Realisation 86600. ; {@) Desde of d's Capital Ne wil be talled fist andthe balancing figure wi ‘be Opening Capital ie, “By Balance Bi! uals ania “on Dr side of B's Capita Ale willbe “To Bank Ale’ 4, 0) Sew oping cai ey Bacio ¥8,000 (4) Balancing figure in Bank Ae will be the Opening Balance Le, “To Balance bye" £11,500 Fawr and i Be Pion 7 / Wp nlang gone Ce se Reha Cait A lb Rein Epcos 0. stage 1:Sa Rash of Reston Loss 7290, Soe lone ib #7270. ypu. ipa Raisin Ae wile Mice tk by Reiman tioao (BL en an's Cink Ae sci Opening ale 14000 Final Payment to Ram €13,47,920; Rahim %6,06,730 and Rehman €8,50,650. (5) Bal. Fig, in Bank A/c will be Opening Balance %48,000. Ansiver and Hints to Solve Problem 6. () Fist ofall Cr side of Realisation A/c willbe completed andthe total of Ct. Side €3,12:900 willbe put on Dr. side and the mssng figure on Dr. side wil ‘be ‘Lables Paid OM 63,00, (@) Loan fom 4 £57,000. (8) Opening Capitals A £60,000, B 12,000 and C %60,00, (4) Final Payment A 36,150 and C £52,080. (Ge sideof Ban Ae willbe olf and theta of 210,60 willbe on the Dr. sie nd Bl ig wl be Opening Balance €10,50, 4, Loan fom the wie of pare hime ee 44, Whenever there i change — tow fm comes nee Egy 4, Partnes’s personal assets can ls be used mda for 5, The firm will be necessarily dssoied econ tli, insolvent, PS Sere, 6, Goodwill appesing inthe ls efi “Account on its dissolution, bettie Rg 7, Partner’ loans have tobe paid before partners as capa SY Lid oy te 8, A ‘Revaluation Account is opened onthe saat en, 9. On the dissolution ofa fim, Gooil wil ese ayer 10, On the dissolution of a firm, Resist Ascout liabilities appearing in the books of be fm. 11, On th dstolaion of im cht er Rd 12, Profit of realisation on he dissolution ofa fms dvidain ea a 13, Dissolution of partershipauonatialy ess ine soso fox 14, Parnes Loans transfered to he Raisin Aca wie itt i died wi ae the firm. 15, There is no difference between Revahaton Acromt an Resin ‘Account. 16, Total of debit side of Cash Account is egal 1 cl sie ae te dissolution of the firm. 17, There is no balance let in any acount afer tr dg ftnsin ese dissolution ofa firm. sche vel 18, Even if nothing is stated in the question ous {all onthe dissolution ofthe fim. (©) Finn the Blanks: res 1. isolation of Partai ory tN 2, Realisation Account is ina exon ttl of 3. When elation expenses a id 8 FR ib rc ni bebe 7h en LEE ‘Scanned with CamScanner, 4. Firm’s property i applied frst fr setting 5. In case of dissolution of partnership partners does not come to an end. = 6. Books of accounts need not be closed in case of dissolution of. 7. For firm's debt, all partners are liable and severally, 8, On dissolution of firm, fictitious assets are transferred to Partner's Loan isto be paid w= payment of outside ° hn bare pyment of pete’ capil issolution, if Workmen Compensation Reserve is €50,000 and liabil 7 er dim is THN000 en 40,00 wl be Cee ners A oy £10,000 will be credited t0 nos = 11, An unrecorded libilty of €10,000 was settled for 27,500 on dissolution, Oy payment, it will be debited to ‘Account with € . 12, On dissolution of the firm, the partner's personal assets are first used for Payment of... 13. On dissolution, goodwill appearing in balance sheet is transferred to ‘Account 14, On dissolution, losses are frst of all met out of. 15.In the Balance Sheet Total Debtors appear at 1,00,000 and Provision for Doubtful Debts appear at 8,500. If bad debts amount to €20,000 and remaining debtors are realised ata discount of 10%, the amount realised ftom debtors will be . 16, Rashmi, a partner, is to bear all expenses of realisation for which she isto be paid £10,000. Rashmi had to pay realisation expenses of €15,000. Amount Aebited to Realisation Account Will Be rms 17. 4, Band Care partners ina firm in the ratio of 1:2: 3. On firm's dissolution, firm's total assets are 1,00,000 and creditors are %20,000. Realisation expenses are €3,000. Assets realised 25% less than the book-value, Creditors ‘were settled at 95%, For profivloss on realisation, A's capital account willbe With Fen 18. On dissolution of a firm, firm's Bal assets side of the Balance Sheet i 15,000; Profit & Loss Account 4,000. Loss on realisation balance) realised willbe. 19. Creditors of €30,000 and Bi basis of one month after 31st 31st March, 2019 @ 6% Account will be relationship between the lance Sheet total is %1,00,000. On the items were shown Advertisement expenses (Debit) Balance %8,000 and Cash Balance ‘was 10,000. Total assets (including cash ills Payable of €10,000 were due on an average t March, 2019 but they were paid immediately on scount pa. the amount debited to Realisation —~50.0n dissolution, if inves 20. ion, if inv Investment Facaten ne oO ro Srnec 21.0n dso ch than ene (coMatching Qu 1.On dissolution ofa pate () [Credit Balance of Bank is transfered to 2. In case of dissolution : (9 [Death ofthe Partner (i |Untawfl business [lappening of neve i) [Person of unsound mind (© [Mana Dissolution with the consent of] (d)[islaioby eat] the partners 3. (9 [Revaluation Account (@ JA Ase and Liki a lacoded (i | Realisation Account looiy canes a aes wd abs ar rere 4. On dissolution of a partnership firm = -()|Unrecorded asset sold forcash | (@)]Nocary record m CinfUnmecored ae ten ty of [Baka De | partner (ii) |Unrecorded asset given to a} (0) Pa De sediot 5. fara () | Partner’s loan to the firm (a)| Is asset 7 rm loan to the partner (es tii ete em 6. On dissolution of a partnership firm: : = | When goodwi appearing in te] (Fame TS Baace sto eased | | VET _| Realisation Alt = fe Go| When goodvit saad nest] |ROAT Cant I Scanned with CamScanner0 iG partner een em by a] [All he partners are ible jointly and severally for c (Private debis GIF partner has taken Toan by mortgaging his Private property () Firms debs ‘To Realisation Ave then his private property can't be [1 __ rg i of = ali fit for payment isolation ofa pute 8. On dissolution ofa partnership firm (0] Deb atedy wits ofa on] (@]Realstion expenses paid by] (@)] Partner capital wil be credited teocved att in of eh [panne and was to be bore by him only (i Asset taken by partner Tal (Realisation expenses paidby fm] (@)] No eect on partner capital Lbuitwastobebome bya partner (| Panoerpaidhis wife laa | of cee thet of Li 11, Atthe time of dissotution fg -~~~ ‘At the time of dissolution of eng (0| Cash tealised from sale ofyaee om transfered ame L_| i Olona (| Peres of Pewee jc) transfered i? SPL Pi | | General reserve bp Gene wien ita (©) | Parner capital will debited 9. Ondissolution ofa partnership firm : (@ [Realisation will be detited | OfRetiion eens 25,000 laa by firm, out of which] 11500 vas to te te By 2 panne by €15,000 (@ [Pavers copa wl Be ced (| Realisation expenses pai 725,000 paid by parmer, out of ‘which £10,000 was to be bore by the frm by £15,000 (@ [Partners capital will be debited by £10,000, (©)[Parer’s capital will be credited by €10,000 (@| Partner's capital wil be debited 10, On dissolution ofa partnership firm : (0) Payment of Employees Provident (@)] Realisation and Bank Account (@)] Creditors taken invesinens | 13. Atthe time of dissolution of panei fi: (o] Uarecorded ability then ty] (a) Noeay partner (Go| Uncecordedisbily pain ch | (6) Reastbeae Be ToCehNe (| Uncecorded ably seedy] (@|RaliiaAe Be ving an urecoded set “ToPine?s Cia Ae 14, Atthe time of dissolution of partnership fm: (o/s wife oan taken overby A | (3) Rei Aout (| Provision for doubt dts | (H]Reision Acoust od : Pues Copal Aca __| (ip) Bank Overall will be] (0] Reson Aso st Bat transfered to Payment ofParnersican | (| Account Peo Acct od Bt ¢ | Account ‘Account Funds recorded in Sea 15. On dissolution of a partnership firm. (| Asset taken by the Parner 1s] ([Realstion Account “(| Dissolution of Paroerhp wit] (0) Pond Las cst amet accounts prepare (1 [Listy taken by te Parner | 6] Parnes Capa Acct isolation of Parwentip final (| Raaton deme 7 ‘which account is prepared. or ee (@| Realisation and Parners Capital (a ein Gib|Retiement of « per wt acount is ened ——— — Scanned with CamScannerUTI [One of the parnery cameo & Loss Aporpriaog) 55,96 000 whichis on ae ccount_—__**N") |__| Book valu of Sindry ership fim 16, atthe time of aissoution ofa partnership Gr ————_—— (ef aexnttentee) Pare’ Coil Asoane CI jank Account 1. On dissolution of a Go Bank ean tte rnaeredio: | (| Bank Account _ 2 on saan fa patie "EL will be| (0) Realisation Account (9 |Workmen Compensation) («fw ‘cn| Balance of P Reserve apere en t| ©] is Compe ranted: . Balance She SL | ogee s (Go| Advertisement Exp. shown 40,000 Torenerrn e sransfer 0 ca lwaemrs Scores gtd 17 On dissolution ofa partnership frm eamen Compensation! (19 Worines the] (@]Cash Ale Dr. 10,000 caelos ‘Ae Pn Reeve (o|rdtr of 80.000 wok overt] (0) Cash fe DF 0 [Balance Sheet — at ToReakaion 410% ee "0,000 40,000 and tiabity| [Resco by sayy aie at €24.000 ToBmkae if ((id)| Creditor of £80,000 took over the| (b)] No entry tt | Workmen Ce stoskof £70,000 O Recere apes as | © Pinta Gi) | Creitor of €80,000 took over the| (c)|Realisation Ale Dr, 10,000 [Balance Sheet at a sock of £90,000 and paid the To Cash Ale 104 '€40,000 and iabii Balance tthe firm. aise at 50,000 18. On dswluion of partnership firm (@) | Workaen Compensation (| Wades Coapion oxy 2 Sr [Reserve does not appear ‘Ae Dein) (0 Parner’ Capital Accounts wil (| Realisation Account inthe Balance Steetand] | TOPEBSCginLAG be closed by _ ae ability aise a 840,000 (Go| Parzer’s loan account willbe] (| Farmer's Curent Accounts closed by (4n| Good Account appearing in| (| Parnes Capital Accounts ; assets will be closed by (D) Maltipte Choice Questions ain Select the Best Alternate and tally your answer withthe Anowers vent ihe — end ofthe book : 19. On dissolution ofa partnership firm 1. tn which condition a partnership firm is deemed w be dissolved? (0) Assets of the firm willbe used | (a)[At first, for payment of firm's (A) Ona partner's admission ibis (B) On retirement ofa parter (in| Dissolution of im (6)| Revaluation Account (©) On expiry ofthe peiod of pamesip (0) Change in Profit Sharing Rao | (c] At frst, for payment of person (D) On os in partnership ()| Personal Assets of a Partner wil 2 Court can make an order to dissolve the fim when ibe used (A) Some partner has become fully mad 10. On dissolution ofa partnership fim (8) Paredes ily foe (0]One of the partners takes. re (© Continued future profit are expect tna ne, ee] ome (remem Book value of Sundry Asses, a —— Scanned with CamScannerDISSOLUTION OF A PARTNERS Hp On isluion a frm realisation account debited with (A) Altassets to be realised {B) Al outside liabilities ofthe firm (© Cash received onsale of assets {D) Any asset taken over by one ofthe partners 44.0 dissolution ofa firm, out ofthe proceeds received from the sale of asset : wll be pa first of all (A) Partner's Capital (@) Partner's Loan to Firm (© Parter’s addtional capital (D) Outside Creitors At the time of dissolution of firm, “Loan of partners" (Loans given by ‘partners tothe firm) i pid out ofthe amount realised on sale of assets: (A) After making the payment of Toans given by third party (@)Afier making the payment of balance of Capital Accounts of partners (© Aber making the payment of above (A) and (B) (©) Before the payment of loans given by third party 6. At the time of dissolution of firm, at which stage the balance of partner's capital accounts is paid? (A) Aer making the payment to third party's loans (GB) Before making the payment of partner in respect oftheir loans (©) er meking topped py for imme or Wel a pry joans (©) None ofthe above. 7. On fim's dissolution which oe of the fllowing acount should be prepared abel? i (A) Realisation Account (©) Partners Capital Accounts (© Cash Account (0) Partner's Loan Account, 8. Inthe event of dissolution ofa partnership fim, th provision for doubtil ets tuned to oe oe reenl (A) Realisation Account (@) Parwers Capital Accounts (© Sundry Dettors Account (D) None athe above 9. On dissolution, if a partner undertakes to make payment of a liability ofthe firm... is debited (A) Profit & Loss Account (B) Realisation Account (©) Partner's Capital Account —__(D) Cash Account 10, Unrecorded liability, when paid on dissolution ofa fi 2 issolution ofa firm is debited to: (A) Partner's Capital Ales (B) Realisation Ale (©) Liabilities Ave (D) Asset Ale On dissolution ofa partnership firm, i caceton of pannership fim, poftorlssonelsation is dsb ML Guenter geass tae Bacar fGen in sete EDiehcgtl me) tn aa Stace rte btn (A) Nominal Ale @) Real Ac rena Bet anne 14, In the event of dissolution of frm, te partner's personal assets are first used for payment ofthe (A) Firm's liabilities (B) The personal liabilites (©) None of the wo (D) Any ofthe two 15, A partnership firm is compulsorily dissolved = (A) When the business ofthe firm is declared illegal (B) When a partner of the firm dies (C) When a partner of te firm becomes insolvent (D) When a partner transfers his share to some other person without the consent of other partners 16, At the time of firm's dissolution, Balance of General Reserve shown in the Balance Sheets ereited (A) Realisation Account (@ Creditor’ Account (C) Partner's Capital Account _(D) Profit & Loss Account 17, On dissolution, goodwill account is transfered to: (A) Inthe Capital Accounts of Partners (@) On the credit of Cash Accout (© Onthe Debit of Realisation Account (D) On the Credit of Realisation Account 18, Atte time of dissolution of partnership firm, fictitious assets are transferred to (A) Capital Accounts of Partners (B) Realisation Account (©) Cash Account Dy Peiee Lom cco 19, At time of dissolution of partnership firm, the balance of profit and loss ‘account shown inthe asses side of Balance sheet ofthe frm is transferred to: (A) Realisation Account (B) Cash Account (©) Capital Accounts of partners (D) Loan Accounts of partners 20, At the time of dissolution of partershp firm, the amount of “Bills Payable” shown i the liability side of Balance Sheet is transfered to (A) Capital Accounts of Partners (B) Realisation Account (©) Cash Account (D) Loan Account of Partners Scanned with CamScanner(B) Cash Account (D) Loan Accounts of Partners (A) Realisation Account (©) Profit & Loss Account 22. Change inthe existing agreement between the partners is called: (A) Dissolution of Firm (B) Dissolution of Partnership (C) Dissolution of Business (D) All of the Above 23. On dissolution, the balance of ‘Profit Loss Account appearing on the asseg side of a Balance Sheet is wansferred to: (A) On the debit of Realisation Account () On the credit of Realisation Account (© On the debit of Parmer’s Capital Accounts (©) On the credit of Partner's Capital Accounts 24. On dissolution of a firm, a partner peid 2700 for firm's realisation expenses, Which account will be debited? (A) Cash Account (B) Realisation Account (©) Capital Account ofthe Parmer (D) Profit & Loss AVe 25.On taking responsibilty of payment of ralsation expenses by apather, he account credited will be (A) Realisation Account (@) Cash Account (© Capital Account of the Parner (D) None of the Above 26-0a dissolution of fim, oss cae Achitedfreited to which account? (A) Cash Account (Credit) ) Parmers’ Capital Accounts (Debit) (©) Parnes" Capital Accounts (Credit) (©) Realisation Account (Debit) 27. Profit or loss of realisation account is transfered to: (A) Profit & Loss Account (8) Cepital Accounts of Partners (©) Balance Sheet (D) None of the Above 28. Which of the following is transferred to Realisation Account (A) Balance of Cash Account (B) Balance of Profit & Loss Account (C) Amount realised on sale of assets (D) Reserves 2. Which of the following isnot wansered to Realisation Account (A) Balance of Cash Account _(B) Balance of Reserves (©) Balance of Profit & Loss Account(D) All ofthe Above ulated in, realisation account is 3% Onttngreposiy o aye fat para i ot atti account credited will be pee ee , (A) Realisation Accouy . (©) Capital Accout ofthe Page) Ci ‘ 5. Cash lane shown inte at Ore Ae (A) Realistion Accu Ss (C) Capital Account fa Ch Ace Oty 32. On firm's dissolutio Moet Balance Stee) wks a pt (A) Cash Ale tS Sng (© Profit & Loss Al ©) Reite noTs None tte ne 53. On disoltion of fm, | Total Capital 248.000; Ca Baan eg ee | les. Los on eaisaton mil eels (A) 86,000 om, * | (sits. y | | | | (@) Panes ip ie (O)Nooeotie ve = Forte kes overan asia, (© Cash Ne 38, On dissolution, wen a credited: (A) Capital Accout ofthe Pater (8) Cat Aout (© Asset Account (0) Rein Ast 236: On dissolution, when a parertkes oven aset is hind (A) Realisation Account (8) Pars Cal Aso, (©) Cash Account (D)Aset Act My Incase of dissolution, assets ar transfered io Resizaion Acct: (A) AtBook Value | (B) AtMarket Value | (C) Cost or Market Vale, whichever loner (D) None ofthe Above te 3 On dizluon, he tae of utr asa ei fscts sie of tale set east (A) On the Debit of Realisation Account (B) On the Credit of Realisation Account (C) On the Debit of Partner’s Capital Account the Ceitof Cath cat (D) Oni aaa " (A Persp oat OT (© Partner's Loan Account — re Scanned with CamScannerissoLUTION OF APARTNERSID yy 40, Sundry Creditors amounted 10 €8,000, These Were Reali account wil be bt (iy 87600 (a) 88.000 ees (© e400 ye 41. There was an Vrecorded ase of €2,000 which was taken over by & paring, af 21,50, Partners Capital Account wil Be die BY wn 8) ©1500 (a) 8.000 (©) 8500 0) €3,300 : itr ofthe value of 85,000 42, On dissolution ofa fim, an wrecorded furitureof the 000 wag taken up by pare for 4.300, Which Account wil be cedted and by ve much amount? : (A) Cash Account by 84300 (®) Realisation Account by 2700 (C) Partner's Capital Account by 25,000 (©) Realisation Account by 24,300 48, Onthe bass of olowing data, final payment oa pane on firm's dissolution willbe made Debit balance of Capital Acount £14,000; Share of bis profit on realisation 43,00; Fir's asst taken over by him for 217000. (a) 51,000 (@) £29,000 © 812.000 (©) %60,000 ‘4. On payment of expenses of disolution, acount wll be debited: (A) Realisation Account (B) Cash Account (© Profit & Loss Account (D) Nove ofthe Above 4S. An unrecorded asset was valued at 100,00. On firm's dissolution, it was Sold for 529, Realisation acount wil be eredited wth (a) 352,000 (&) £48,000 (C) %1,00,000 (D) None of the Above 46 On fim’s dissolution, partner undertook firm's creditors at 17,000 In this ase the account wll be ceded: (A) Creditors Ale (B) Cash Ale (C) Realisation A/c (D) Partner's Capital A/c 47. On dissolution, losses ae frst ofall met: (4) Out of Capi B) Ow of Pros (©) Outof private assets of partners (D) Out of oan from Bank 8. ~i8 prepared atthe time of dissolution : (A) Revaluation Account (@) Profit & Loss Account (© Profit and Loss Appropriation Account (©) Realisation Account atedoonntora scot ”. fe bbe transferred : (A) Patents vant (©) Cah 1 50,1 otal ase ate £2,000; ig ssl of sei 1.75000 ed ena Toss on realisation willbe, Sean (A) Profit 12,00 Olu ene (© Loss ¥28,000 Ole NOT. On disvohtion of 51. On disoluion of fim, etn we rte we (8) Poo, Aco ti © Dito Aoi ty nots 52 In the Balance Shet Total Deft ape at Douhil Debs pera 150 ore cate Debtors ited debs amo ot aie a discount of % i (A) €38,000 @ v0 ©) 86575 Drs ‘53. How much amount will be paid to Creditors fr 25,00 if 5000 be creditors are not to be paid and the remaining cdi aged oat less amount? (A) 118,750 @ t1900 © 819,750 (e900 ‘4. P, a parine, isto bear ll expenses of rls fr wich es be aid 2,000, P had to pay realisation expenses of 82,50 How much anou will bbe debited to Realisation Account? (A) 8500 @ 20 (© 84,500 mnm iti ili Nad 58, How much amount wil be pid A, iio cial 2000 2d his share of realisation pot aoas to €1000 andes i ef? yes @ tisne (©) 15,000 o Hots inthe bot. TS saemes ye 2010 wee me em we creditors took over thse aves 8 cet? £2,20,000, How much anus i Ay (A) 120,000 emo (©) €4,20,000 Scanned with CamScannerpissoLuTIO 57. Irereditors are €25,000, capital is €1,50,000 and cash balance i ©1999 what wl be the amount of sundry assets? (a) 21,95.000 @) £185,000 ‘58. 1fopening capitals of partners are A €3,00,000, 8 €2,00,000 and C 1,00, malas ag year 4 £5000 B€40000 ard 239099 and creditors are 860,000, what wil be he amount of asses of the fim? (a) 25,40,000 (B) &4,20,000 (© ¥4,80,000 (D) 86,60,000 HOTS 59. Iftotal assets of firm are €12,0,000 and toa abilities are £240,000, wag ‘wll be the capitals of P, Q and Rif they share profits in the ratio of their ‘capitals and profit sharing ratio is 1:23: (A) P £4,80,000; 0 83,2,000;R £160,000 @) P 21,60,000; 9 ¥3,20,000;& %480,000 (©) P £2,00,000; 0 %4,00,000;& 26,0000 ©) P-&6,0,000; 0 4,00,00;R #2,0,000 60. On dissolution ofa frm, a parne’s capital aécount has a credit balance of £42,000, His share of profit in realisation account is 9,000. He bas paid firs realisation expenses £3,000. He will nally get a payment of (A) £39,000 (@) £42,000 (© 834000 (©) £48,000 1. On dissolution of a fem, a pariner took over 17,000 investments for 114,000. Which one ofthe following account will be debitedireited with hhow much amount? (A) Parer's Capital Account Debit with £14,000 (8) Partner's Capital Account Credit with 817,000 (©) Realisation Account Credit with €17,000 () Realisation Account Credit with €3,000 2. On dissolution of frm, which item is debited tothe realisation account? (A) Realisation expenses pad by partner @) Balance of reserve fund (©) Amount of unrecorded asset (©) Creditors balance shown nthe Balance Sheet -RSHIP Finyy HoTs ‘63 Atthe time of dissolution of firm, Creditors are €70,000; Partners’ capital is %1,20,000; Cash Balance is 10,000, Other assets realised £1,50,000. ProfivLoss inthe realisation account willbe: {49260900 Lo) (8) 380,000 (Profit) (©) 40,000 (Loss) D) hors (©) 830,000 (Loss) 4. On dissolution ofa firm, debtors £17,000 were shown in the Balance Sheet. LUTION OF A RO ——— of tit 20 eae tO from him out tor became jx inal recovered # of £5.00, Full amon Rt. 2% a palance debtors. On account ofthis tens N28 ToveRd fone asin eal m te (A) %5,100 ©) B50) OU wl be (©) 83,500 ©) 22009 s NOG, x Yand Za pate inane tse: 3.2 ogg, fis total asses are 870.00, creditors ae Els pn 8, are €2,100. Assets realised 15% more than the tos” peses qaid 2% more. For profitoss fon Perak Ce Utited/reited with (A) Credit £8,100 (© Debit 2,700 wots: : 6, 0ndsslution of fr, fms Balance Sheet tis 7.0, Oa he nets usin i ae Sey ee ea ct tesla Tas on easton wat ©6300 Tole cee vill be (A) 269,200 371,000 (© 864,700 (©) 862900 HOTS: 67.On dissolution of a firm, partners’ capital accounts balance was 63.000; creditors balance was 12,000 and profit & loss acount dbit balance was +26,000, Profit on realisation of assets was 27,800 Total amount ale fom, asets Was (A) 881,000 &) €75800 (© 870,800 (D) ®one (68.0n dissolution ofa fim, «partner tok-over the invesment of 815,00 a £19,000. By how much amount te Realstion Account wilbe cee? A) 4,000 @ 21900 Oni (0) 23000 , Charan oan 20,000 9. Anu, Bina and are partners. The firm had given Bina, On the event of ssolution the lan wil beset by (A) Transfering ito debit side of Realization Acco (B) Transferring it to credit side See (©) Transferring it to debit side of Bna's Coit a Foe Eo (D) Bina paying Anu and Charan privately. (C Z 70. Which ofthe following is nt wnsteneb te Reins NT (A) Balance of Profit & Loss Ae (B) Adve aa (© Partner's Loan On USee Answers atthe end ofthe book] $$ Scanned with CamScanner