Class 12 Accountancy

Chapter 4 Solutions — Dissolution of Partnership Firm

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Solutions

Overview

Step-by-step NCERT solutions for Dissolution of Partnership Firm (Chapter 4, CBSE Class 12 Accountancy) — every question and answer worked out in full, not just the final result. You can also read the Dissolution of Partnership Firm textbook chapter.

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What these solutions cover

All 30 questions in Dissolution of Partnership Firm are solved in the PDF. Here's what's inside, exercise by exercise:

Short & Long Answer Questions

State the difference between dissolution of partnership and dissolution of partnership firm.
State the accounting treatment at the time of dissolution of a firm for: i. Unrecorded assets ii. Unrecorded liabilities
3.
On dissolution, how will you deal with partner's loan if it appears on the
- (a) assets side of the balance sheet,
- (b) liabilities side of balance sheet.
Distinguish between firm's debts and partner's private debts.
State the order of settlement of accounts on dissolution.
On what account realisation account differs from revaluation account.
Explain the process of dissolution of a partnership firm.
What is a Realisation Account?
Reproduce the format of Realisation Account.
How deficiency of creditors is paid off at the time of dissolution of firm.

Numerical Questions

Journalise the following transactions regarding realisation expenses: [a] Realisation expenses amounted to Rs.2,500. [b] Realisation expenses amounting to Rs.3,000 were paid by Ashok, one of the partners. [c] Realisation expenses Rs.2,300 borne by Tarun, personally. [d] Amit, a partner was appointed to realise the assets, at a cost of Rs.4,000. The actual amount of realisation expenses amounted…
Record necessary journal entries in the following cases: [a] Creditors worth Rs.85,000 accepted Rs.40,000 as cash and Investment worth Rs.43,000, in full settlement of their claim. [b] Creditors were Rs.16,000. They accepted Machinery valued at Rs.18,000 in settlement of their claim. [c] Creditors were Rs.90,000. They accepted Buildings valued Rs.1,20,000 and paid cash to the firm Rs.30,000.
There was an old computer which was written-off in the books of accounts in the previous year. The same has been taken over by a partner Nitin for Rs.3,000. Journalise the transaction when the firm has been dissolved.
What journal entries will be recorded for the following transactions on the dissolution of a firm: [a] Payment of unrecorded liabilities of Rs.3,200. [b] Stock worth Rs.7,500 is taken over by a partner Rohit. [c] Profit on Realisation amounting to Rs.18,000 is to be distributed between the partners Ashish and Tarun in the ratio of 5:7. [d] An unrecorded asset realised Rs.5,500.
Give journal entries for the following transactions: 1. To record the realisation of various assets and liabilities. 2. A Firm has a Stock of Rs.1,60,000. Aziz, a partner took over 50% of the Stock at a discount of 20%. 3. Remaining Stock was sold at a profit of 30% on cost. 4. Land and Building (book value Rs.1,60,000) sold for Rs.3,00,000 through a broker who charged 2% commission on the deal…
How will you deal with the realisation expenses of the firm of Rashim and Bindiya in the following cases: 1. Realisation expenses amount to Rs.1,00,000. 2. Realisation expenses amounting to Rs.30,000 are paid by Rashim, a partner. 3. Realisation expenses are to be borne by Rashim and he will be paid Rs.70,000 as remuneration for completing the dissolution process. The actual expenses incurred by…
The book value of assets (other than cash and bank) transferred to Realisation Account is Rs.1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a Creditor, in full settlement of his claim. You are required to…
Record necessary journal entries to realise the following unrecorded assets and liabilities in the books of Paras and Priya: 1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs.3,000. 2. Ashish, an old customer whose account for Rs.1,000 was written-off as bad in the previous year, paid 60% of the amount. 3. Paras agreed to takeover…
All partners wish to dissolve the firm. Yastin, a partner wants that her loan of Rs.2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin's loan. You are required to settle the conflict giving reasons.
What journal entries would be recorded for the following transactions on the dissolution of a firm of Arti and Karim after various assets (other than cash) and the third party liabilities have been transferred to Realisation account. 1. Arti took over the Stock worth Rs.80,000 at Rs.68,000. 2. There was unrecorded Bike of Rs.40,000 which was taken over by Mr. Karim. 3. The firm paid Rs.40,000 as…
Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2017 was as follows: Liabilities: Creditors 40,000 | Lily's Loan 32,000 | Profit and Loss 50,000 | Capital — Lily 1,60,000 | Capital — Rose 2,40,000 | Total 5,22,000 Assets: Cash 16,000 | Debtors 80,000 | Less: Provision for Doubtful Debts 3,600 = Net 76,400 | Inventory 1,09,600 | Bills Receivable 40,000 |…
Shilpa, Meena and Nanda decided to dissolve their partnership on March 31, 2017. Their profit-sharing ratio was 3:2:1 and their Balance Sheet was as under: Liabilities: Capital — Shilpa 80,000 | Capital — Meena 40,000 | Bank Loan 20,000 | Creditors 37,000 | Provision for Doubtful Debts 1,200 | General Reserve 12,000 | Total 1,90,200 Assets: Land 81,000 | Stock 56,760 | Debtors 18,600 | Nanda's…
Surjit and Rahi were sharing profits (losses) in the ratio of 3:2. Their Balance Sheet as on March 31, 2017 is as follows: Liabilities: Creditors 38,000 | Mrs. Surjit's Loan 10,000 | Reserve 15,000 | Rahi's Loan 5,000 | Capital — Surjit 10,000 | Capital — Rahi 8,000 | Total 86,000 Assets: Bank 11,500 | Stock 6,000 | Debtors 19,000 | Furniture 4,000 | Plant 28,000 | Investment 10,000 | Profit and…
Rita, Geeta and Ashish were partners in a firm sharing profits/losses in the ratio of 3:2:1. On March 31, 2017 their Balance Sheet was as follows: Liabilities: Capital — Rita 80,000 | Capital — Geeta 50,000 | Capital — Ashish 30,000 (total 1,60,000) | Creditors 65,000 | Bills Payable 26,000 | General Reserve 20,000 | Total 2,71,000 Assets: Cash 22,500 | Debtors 52,300 | Stock 36,000 |…
Anup and Sumit are equal partners in a firm. They decided to dissolve the partnership on March 31, 2017. The Balance Sheet is as under: Liabilities: Sundry Creditors 27,000 | General Reserve 10,000 | Loan 40,000 | Capital — Anup 60,000 | Capital — Sumit 60,000 | Total 1,97,000 Assets: Cash at Bank 11,000 | Sundry Debtors 12,000 | Plants 47,000 | Stock 42,000 | Lease Hold Land 60,000 | Furniture…
Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on March 31, 2017. Their Balance Sheet on the above date was: Liabilities: Capital — Ashu 1,08,000 | Capital — Harish 54,000 (total 1,62,000) | Creditors 88,000 | Bank Overdraft 50,000 | Total 3,00,000 Assets: Building 80,000 | Machinery 70,000 | Furniture 14,000 | Stock 20,000 | Investments 60,000 |…
Sanjay, Tarun and Vineet shared profit in the ratio of 3:2:1. On March 31, 2017 their Balance Sheet was as follows: Liabilities: Capital — Sanjay 1,00,000 | Capital — Tarun 1,00,000 | Capital — Vineet 70,000 (total 2,70,000) | Creditors 80,000 | Bills Payable 30,000 | Total 3,80,000 Assets: Plant 90,000 | Debtors 60,000 | Furniture 32,000 | Stock 60,000 | Investments 70,000 | Bills Receivable…
The following is the Balance Sheet of Gupta and Sharma as on March 31, 2017: Liabilities: Sundry Creditors 38,000 | Mrs. Gupta's Loan 20,000 | Mrs. Sharma's Loan 30,000 | General Reserve 6,000 | Provision for Doubtful Debts 4,000 | Capital — Gupta 90,000 | Capital — Sharma 60,000 | Total 2,48,000 Assets: Cash at Bank 12,500 | Sundry Debtors 55,000 | Stock 44,000 | Bills Receivable 19,000 |…
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 December 31, 2017, when the Balance Sheet of the firm is as under: Liabilities: Sundry Creditors 20,000 | Bills Payable 25,500 | Chetan's Loan 30,000 | Capital — Ashok 70,000 | Capital — Babu 55,000 | Capital — Chetan 27,000 (total 1,52,000) | Current A/c…
The following is the Balance Sheet of Tanu and Manu, who share profit and losses in the ratio of 5:3, on March 31, 2017: Liabilities: Sundry Creditors 62,000 | Bills Payable 32,000 | Bank Loan 50,000 | General Reserve 16,000 | Capital — Tanu 1,10,000 | Capital — Manu 90,000 | Total 3,60,000 Assets: Cash at Bank 16,000 | Sundry Debtors 55,000 | Stock 75,000 | Motor Car 90,000 | Machinery 45,000 |…

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