DISSOLUTION OF PARTNERSHIP FIRM

1. Journalise the following transactions regarding realisation expenses.

(a) Realisation expenses amounted to 2,500.

(b) Realisation expenses amounted to 3,000 were paid by Ashok, one of the partners.

(c) Realisation expenses 2,300 borne and paid by Tarun personally.

(d) Amit, a partner was appointed to realise the assets, at a cost of 4,000. The actual amount of realisation
amounted to 3,000.

(e) Realisation expenses paid by the firm amounted to 2,000 and Aman, a partner has to bear the
realisation expenses.

(f) Realisation expenses were 7,000; 4,000 were to be borne by the firm and the balance by Sanjay, a
partner. The expenses were paid by Sanjay.

(g) Realisation expenses were 15,000. Out of the said expenses, 11,000 were to be borne by the firm and
the balance by Sonu, a partner.

(h) Realisation expenses 4,000 were paid by Hari for which he was allowed 2,500.

(i) Realisation expenses of 3,000 are to be borne by Ankit, a partner. However such expenses were paid by
Manish, another partner.

(j) Rahul, a partner agrees to do dissolution work for an agreed remuneration of 4,000 and firm was to bear
realisation expenses which amounted to 7,000.

(k) A agreed to bear realisation expenses, for which he will be credited with 2,000. Actual expenses paid by
him amounted to 1,500.

(l) Realisation expenses paid by Aman are 2,000 and paid by Naman are 4,000. However, these expenses
were to be borne by the firm.

(m) Realisation expenses were 10,000; 6,000 were to be borne by the firm and the balance by
Sangeeta, a partner. Out of total realisation expenses, 8,000 were paid by firm and balance by
Sangeeta.

(n) Komal, a partner agreed to bear all realisation expenses. For this, she will be paid 12,000. Actual
expenses paid out of firm's account were 9,000.

(o) Anmol is to bear all expenses of realisation for which he is allowed a commission of 7,000. Actual
realisation expenses were 10,000 and were paid by the firm.

NARESH BHARDWAJ 8860095745

(p) Loan of 10,000 advanced by a partner to the firm was refunded.

(q) X, a partner, takes over an unrecorded asset (Typewriter) at 300.

(r ) Undistributed balance (Debit) of Profit and Loss Account 30,000. The firm has three partners X, Y and Z.

(s) Assets of the firm realised 1,25,000.

(t) Y who undertakes to carry out the dissolution proceedings is paid 2,000 for the same.

(u) Creditors paid 28,000 in full settlement of their account of 30,000.

2. Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass necessary Journal
Entries for the following after various assets (other than cash and bank) and the third party liability have been
transferred to Realisation Account:

(i) Kunal agreed to pay off his wife's loan of 6,000.

(ii) Total creditors of the firm were 40,000. Creditors worth 10,000 were given a piece of furniture
costing 8,000 in full and final settlement. Remaining creditors allowed a discount of 10%.

(iii) Rohit had given a loan of 70,000 to the firm which was duly paid.

(iv) A machine which was not recorded in the books was taken over by Kunal at 3,000, whereas its expected
value was 5,000.

(v) The firm had a debit balance of ` 15,000 in the Profit and Loss Account on the date of dissolution.

(vi) Sarthak paid realisation expenses of 16,000 out of his private funds, who was to get remuneration of
15,000 for completing the dissolution process and was responsible to bear all the realisation expenses.

3. Abhishek, Manav and Vishwa are partners in a firm. They decided to dissolve their firm. Pass necessary
Journal Entries for the following after various assets (other than cash and bank) and the third party liabilities
have been transferred to Realisation Account:

(i) There was a stock of 80,000. Manav took over 50% of the stock at a discount of 20%.

(ii) There were debtors of 66,000 and a provision for Bad and doubtful debts also stood at 6,000.
12,000 of debtors proved bad and rest were realised fully.

(iii) Realisation expenses amounted to 5,000 met by Vishwa on behalf of the firm.

(iv) A contingent liability (not provided for) of 1,000 was also discharged.

NARESH BHARDWAJ 8860095745

(v) There was a balance of 30,000 in the General Reserve.

(vi) A computer which was not recorded in the books was sold for 1,000.

4. Pass the necessary Journal entries for the following transactions on the dissolution of the firm of R and L
after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

(i) R paid creditors 17,000 in full settlement of their claim of 20,000.

(ii) L agreed to pay his wife's loan 70,000.

(iii) Stock 40,000 was taken over by R for 39,000.

(iv) Other assets realised 39,000.

(v) Expenses of realisation 4,900 were paid by partner L.

(vi) Loss on dissolution 9,000 was divided between R and L in the ratio of 3:1.

5. Pass the necessary journal entries for the following transactions on the dissolution of the firm of James and
Haider who were sharing profits and losses in the ratio of 2:1. The various assets (other than cash) and
outside liabilities have been transferred to Realisation Account:

(i) James agreed to pay off his brother's loan 10,000.

(ii) Debtors realised 12,000.

(iii) Haider took over all investments at 12,000.

(iv) Sundry creditors 20,000 were paid at 5% discount.

(v) Realisation expenses amounted to 2,000.

(vi) Loss on realisation was 10,200.

6. Angad, Raman and Harshit were partners in a firm. They decided to dissolve their firm. Pass necessary
Journal Entries for the following after various assets (other than Cash and Bank) and the third party
liabilities have been transferred to Realisation A/c:

(i) There was a stock of 90,000. Raman took over 50% of the stock at 10% discount and remaining stock
was sold at 40% profit on book value.

NARESH BHARDWAJ 8860095745

 (ii) Profit and Loss A/c was showing a debit balance of 15,000 which was distributed among the partners.

(iii) A machinery which was not recorded in the books was sold for 2,000.

(iv) Angad was paid only 5,000 for his loan to the firm which amounted to 5,500.

(v) Realisation Expenses amounting to 5,000 paid by Harshit.

(vi) There were 100 shares of 10 each in DCM Ltd. acquired at a cost of 1,200 which had been written off
completely from the books. These shares are valued @ 9 each and divided among the partners in their
profit sharing ratio.

7. K and P were partners in a firm sharing profits in the ratio of 7:5. On 31-1-2016 their firm was dissolved.
After transferring assets (other than cash) and outsiders liabilities to the realization account, you are given
the following information :
(a) Raman, a creditor for 4,20,000 accepted building valued at 8,00,000 and paid the balance to the firm
by a cheque.
(b) Rajeev, a second creditor for 1,70,000 accepted machinery valued at 1,65,000 in full settlement of his
claim.
(c) Ranjan, a third creditor for 90,000 accepted investments of 45,000 and a bank draft of 43,000 in his
favour in full settlement of his claim.
(d) P was appointed to do the work of dissolution for which he was allowed 2,000. Actual expenses of
dissolution 2,400 were paid by P.

NARESH BHARDWAJ 8860095745