True/False [| Mark

) Realisation
(ii) account iscash
All assets including a Nominal
and bankAccount.
balance aretransferredto the Realisation Account.
(ii) An unrecorded Computer system was sold for 20,000. Realisation Account will be Credited hy

liabilitiesis credited Realisation Account.

20,000. to
unrecorded
(iv) Any amount paid for the
means the dissolution of the partnership also.
(V) Dissolution of the frm
True. (iv) False, (v) True]
(Ans. () True, (ii) False. Gi)

Fill in the Blanks [I Mark

is dissolved, General Reserve is
transferred to in the profit-staring
() When the firm
(ii) Goodwill Account appearing in the books on the dissolution date is closed by translerring i
ratio.
account.
side ofthere
(iii) toAt the time ofdissolution, the were Debtors1,32,000, Provisionfor )Doubtful Debts?1 12000 and
realised from the
R24,000 of the book debts
proved bad. The
Realisation Account.
debtors
in the to Realisation AcCount.
Expenses of realisation are 8.000
(iv)
dissolution, Suhana, a partner agreed to pay creditors
(v) At the time of credited by 78,000.
Account will be
[Ans. (i) Partners' Capital
Accounts, (iü) debit, realisation, (iii) credited, debited,
1,08,000, (iv)
(v) Suhana's Capital])

Match the Following Columns [I Mark

mode of realisation of assets wilh A:
1. In case of dissolution of a partnership firm, match the
treatment:

(i) When assets are sold for cash

(a) No entry is passed
(ü) When an asset is taken by a partner (b) Cash A/c is debited
(i) When an asset is given to creditors for (c) Concerned Partners' Capital Ac
settlement of dues is debited

2. At the time of dissolution of a partnership firm,

(i) For closing the Assets Accounts (a) They are credited to Realisation Alc
(i) For cdosing the Liabilities Accounts (b) They are credited to the Partners
Capital A/s
(iü) For transferring accumulated profits (c) They are debited to Realisation Alc
and General Reserve
[Ans. 1. (i-(b),(ü-Hc), (m)-a), 2. (i)Ho), (ü)-(a), (ii)-6)]
[1Mark
Very Short Answer Questions
[CBSE (F)2011202
Q. 1. Give one distinction between reconstitution of afirm and dissolution ofa firm. whieinas
Ans. In case of reconstitution ofa firm, i.e., dissolution of a partnership, the firm continues,,
of dissolution of a firm, the firm's business is discontinued. a
date

Q. 2. Varun and Arun are partners in a firm sharing profits and losses equally. 0n Ari the
whereas
dissolution of the partnership firm, Varun's wife's loan was 45.000, [CBSE2019(673
loan was 65,000. Which loan will be paid first and why? liability)
Ans. Varun's wife's loan will be paid first as it is an party
outside liability (third

idea Accountancy-Xl
 Distinguishbetween Reconstitution of Partnership' and'Dissolution of Partnership Firm on the
ofb0oks [CBSE 2019 (67/4/1)]
closure
basisof
Reconstitution of Partnership Dissolution of Partnership Firm
Basis
Closure of books is not required since the All the books of accounts are closed since
Closureof
Books
business is not terminated. the business is terminated.

Distinguish
between dissolution of partnership and partnership firm on the basis of Settlement
ofassets
andliabilities: [CBSE (F) 2014, 2018]

Dissolution of Partnership Dissolution of Partnership Firm

An5. Basis

Settlementofassets
Assets are revalued, liabilities are reassessed Allbooks of accounts are closed. All the
andliabilities
anda new balance sheet is drawn. assets (except cash) are realised and all the
liabilities are paid off.

which is not shown in the Balance Sheet, but paid at the time of dissolution of
Namethe liability [CBSE Delhi 2014(C)1
0.5.
thefirm.
Unrecorded liability.
Ans which court may order for the dissolution of the firm.
grounds on the basis of
State any two [CBSE 2019 (67/4/1)]
peSon of unsound mind.
Ans, (0)Apartner becomes a misconduct.
o) Apartner is found to be guilty of
settlement of accounts under dissolution is made?
Under which section,
Act, 1932.
Ine Section 48 of the Indian Partnership
discharge the firm's liability?
0.8. What Journal Entry would be passed ifa partner agreed to
Ans. Realisation A/c Dr.

To Partner's Capital Ac
realised on dissolution.
0.9. Show Journal entry, if 60% of debtors of full value 70,000
Ans. Cash/Bank A/c Dr. 742,000
To Realisation Alc 742,000
these
Q. 10. Name some specific liabilities which are transferable to realisation account but payment of
is not made on dissolution of firm.
Ans. () Provision for Depreciation Ac
(ü) Investment Fluctuation Reserve A/c
I1. Differentiate between Dissolution of Partnership and Dissolution of aPartnership Firm on the
basis of"Court's Intervention. [CBSE 2019 (67/1/1)]
Ans.

Basis Dissolution of Partnership Dissolution of Partnership Firm

Court's intervention The court does not intervene because The firm can be dissolved by court's
partnership is dissolved by mutual order.
agreement.
0. 12. At the time of dissolution of a partnership firm, the book value of sundry assets transferred to

Realisation Account was? 4,00,000. 50% of these sundry assets were taken by partner Mat 20%
discount. 40% of the assets were sold at a profit of 30% on cost.
5% of the balance was
remaining
found obsolete and Irealised a creditor in full
nothing. The remaining assets were taken over by
settlement of his claim. Give necessary journal entries.

Dissolution of A Partnership
 Ans. Journal
L.F.
Date Particulars Dr. (3)
D

M's Capital Alc 1,60,000

Bank Alc
Dr.
1.04,000
To Realisation Alc over
Z2.00.000 were taken
(Being the assets whose book values werebook values were 80,000
and the assets whose
oy M for ?1,60,000
were sold for 1,04,000)
Q. 13. Sundry Debtors are appearing at 2,16,000 and Provision for Doubtful Debts at ? 12,000 in th.
transferred at which
The Sundry Debtors will be
Balance Sheet before dissolution, figure in
Realisation Account?
transferred to Realisation Account at ?2,16,000.
2 14. Sundry
Ans. debtors
Profit and willbe
Loss Account shows a debit balance of R15,000. Give journal entry for traansterring itin
Partners' Capital Accounts at thetime of dissolution of apartnership firm if Anuj and Bulbul were two
partners in a firm.
Dr 7,500
Ans. Anuj's Capital Ac
Dr. 7,500
Bulbul's Capital Ac
15,000
To Profit &Loss Ac

loss transferred to partners)

Q. 15. (Being
The amount of Sundry Assets transferred to Realisation Account is 80,000. Assets realised 96F
be credited to Realisation Account)
of their book value. What amount should
Ans. 76.800
Realisation Account?
0. 16. At which value the various assets are transferred to
Ans. Book value
0. 17. Which account is to be credited if realisation expenses are paid by a partner?
Ans. Partner's Capital Account
0. 18. Siyaram, apartner was to receive 3% of the value of assets realised and 15% of the amount final,
paid to partners. He has to bear realisation expenses of ?10,000. The assets realised 4,2000
(including cash at Bank 20,000). Cash payment made to Sundry creditors 1,00,000. Ps
necessary journal entry.
Ans. Realisation A/c Dr 58,200
ToSiyaram's Capital Alc 58,200
(Being rermuneration for dissolution due to Siyaram)
Working Note:
(i)) Total cash in hand 4,20,000
Less: Payment made to creditors 1,00,000
Siyaram's Commission on 1,12,000
12,000
Assets realised
100
x (4,20,000
-20009 3,08,000
Cash available for payment to partners
Siyaram's share on final payment to partners = 3,08,000 x 15 = 46.200
100
Total amount to be paid to Siyaram = 12,000 + hisprizt
(ü) Noentry will be for realisation 46,200= 58,200 Samefrom
funds. expenses assuming Siyaram has paid the bal
from
Q. 19. If creditors of the firm Loan
50,000, X's Capital 20,000, Y°s Capital 730,000,
750,000. Find out total assets = Liabilities+Capiu
of the firm.
Ans. Assets=1,50,000 [Hint: AssetsS=

idea Accountancy-XIl
 journalentry for accounting treatment in case of dissolution for transferring debtors along
Ge
provisionfor doubtful debts.
with Dr

ul va ue)
ToDebtos A
Debts A.
DryS0 for Doubiut
Dr.

saton Ac
To Rea
objectives for preparing the Realisation Account at the time of dissolution of the
irm.
Toserde close the assets and liabilities accounts.
Totind out net profit or net loss on realisation of sundrv assets and after sertlement ofsundr
iabilities.
When an asset is taken over by a partner, why is his capital account debited?
Whenan aset is taken over bv a partner. his capital account is debited as the amount of that asset
usthe claim of capital account of the partner against the firm.

ShortAnswer Questions |3,4 Marks]

Pass necessary journall entries on the dissolution ofa partnership firm inthefollowing cases:
Expenses of dissolution were 79,000.
i Expenses of dissolution *3,400 were paid by a partner, Vishal.
Shiy,a partner, agreed to do the work of dissolution for a commission of 4,500. He also
agreed to bear the dissolution expenses. Actual dissolution expenses R3,900 were paid from
the firm's bank account.
É) Naveen, a partner, agreed to look after the dissolution work for which he was allowed a
remuneration of3,000. Naveen als0 agreed to bear the dissolution expenses. Actual
expenses on dissolution 2,700 were paid by Naveen.
() Vivek, a partner, was appointed to look after the dissolution work for a remuneration of
7.000. He agreed to bear the dissolution expenses. Actual dissolution expenses 76,500
were paid by Rishi, another partner,on behalf of Vivek.
(e) Gaurav, a partner, was appointed to look after the work of dissolution for a commission of
12.500. He agreed to bear the dissolution expenses. Gaurav took over furniture of 12,500
as his commission. The furniture had already been transferred to realisation account.
[CBSE (4I) 2017]
Books of the firm
Journal
Bate
Particulars LF. Dr. () Cr.)
Realisation Alc Dr 9,000
To CashBank Alc
9,000
(Being dissolution expenses paid)
Realisation Ac Dr 3,400
To Vishals Capital Alc
3,400
(Being dissolution expenses paid by Vishal)
(a) Realisation Alc
Dr 4,500
To Shiv's
Capital Alc 4,500
(Seng remuneration given to Shiv for
) (b)
Shivs Capital Alc dissolution work)
Dr 3,900
To Bank Alc
3.900
Being dissoiution
expenses paid by fim on behalf ofthe partner)
 Dr.
Realisation A/c
(iv)
To
Naveen's
CapitalA/c
expenses paid by
Naveen and Compensated by firm) 3,000
dissolution Dr.
(Being
Realisation A/c
(v)(a)
To Vivek's
Capital A/c
remunerated for dissolution expenses)
7,000
partner Vivek
(Being Dr.
A/c
Vivek's Capital
(v) (b)
To Rishi's
Capital Alc
paid by Rishi on behalf of Vivek)
6,500
dissolution expenses
(Being Dr.
Realisation A/c
(v) (a)|
ToGaurav's
Capital A/c
Gaurav)
12,500
remuneration given to
(Being
(v) (b)
Gaurav's Capital A/c
Dr. 125%
To Realisation Ac 12,500
as remuneration)
(Being furniture taken over by Gaurav
Or 1255
(v) No Entry
(a) + (b)
partners in a firm sharing profits and losses in
0.2. Adiraj and Karan were the ratio 3:2. On 3l
March, 2018the firm was dissolved. After the transfer of assets (other than cash in hand anda
bank) and third party liabilities to the Realisation Account, the following information w
provided:
() Furniture of 70,000 was sold for 68,000 by auction and auctioneer's
amounted to 2,000. commissim
(i) Adiraj's loan amounting to 35,000 was paid.
(ii) Out of the stock of T80,000, Karan took over 50% of the stock at a discount of 20'% whiebh.
remaining stock was sold off at a profit of 30% on cost.
(ie) A billreceivable of 3,000 under discount was dishonoured as the acceptor had bee:
insolvent and hence the bill had to be met by the firm.
() Profit and Loss Account showed a debit balance of t56,000.
(vi) Realization expenses amounted to 2,000 which were paid by Adiraj.
Pass the necessary journal entries for the above transactions on the dissolution of the fim.
[CBSE2019(6731
Ans.
Journal
Date Particulars L.F. Dr. ()
2018 (i)
Mar. 31

(i) 66,.000
Bank Alc Dr.
To Realisation A/c

(Being furniture realised)

35,000
(ii)
Adiraj's Loan A/c Dr.
To Bank A/c

(Being partner's loan settled) 32,000

(ii)
Karan's Capital Alc Dr.
To Realisation A/c

(Being half of the stock taken over byKaran at 20%

disCOunt)
199 Xam idea
 Bank AVc
Dr
ToRealisation A/c 52,000

(Being remaining stock sold at 30% profit) 52,000

Realisation Alc
Dr
(iv) 3,000
To Bank A/c
3,000
(Beingdishonoured bill met)
Adiraj's Capital A/c Dr.
33.600
Karan's Capital A/c
Dr. 22,400
To Profit and Loss A/c
56.000
(Beingdebit balance of profit and loss account transferred)
Realisation A/c Dr.
(vi) 2,000
To Adiraj's Capital Alc
2,000
(Being realisation expenses paid by Adiraj)
03.Passthe necessary journal entries for the following transactions on the dissolution of the firm of
Sudha and Shiva after the various assets (other than cash) and outside liabilities have been
transferred to Realisation Account:
à Sudha agreed to pay off her husband's loan 19,000.
c Adohtor whose debt of 9,000 was written off in the books, paid 7,500 in full settlement.
i) Shiva took over all investments at 13,300.
li) Sundry creditors 10,000 were paid at 9% discount.
o) Realisation expenses 3,400were paid by Sudha for which she was allowed 3.000.
tui) Loss onrealisation 9,400 was divided between Sudha and Shiva in 3 :2 ratio.
[CBSE (AI) 2011]
Ans. Journal
Date Particulars L.F. Dr. () Cr. (3)
Realisation A/c Dr. 19,000
To Sudha's Capital A/c 19,000
(Being Sudha's husband's loan taken over by Sudha)
Bank Alc Dr. 7,500
To Realisation Alc 7.500

(Being bad debts recovered from a debtors)

(iin) Shiva's Capital Alc Dr. 13,300
To Realisation A/c 13.300
(Being investments taken over by Shiva)
(iv) Realisation A/c Dr. 9,100
To Bank Alc 9,100
(Being creditors settled at 9% discount)
(v) Realisation Alc Dr. 3,000
To Sudha's Capital Alc 3,000

(Being realisation expenses borne by Sudha)

(v) Sudha's Capital Alc Dr. 5,640
3,760
Shiva's Capital Alc Dr.
9,400
To Realisation A/c

).4. Ankit, , BobbyToeing loss on realisation transferred to partners' capital profits

accounts)
in the ratio 4:3:3.The firmwas
and Kartik were partners in a firm sharing
dissolved on131st
? March, 2018.Pass the necessary Journal entries for the following transactions

Dissolution of A Partnership
 bank) arand third partv habslties
iothet than ash and
aftet varos assets
Rcalhsaton Accomunt
(r) The firm had stock of zR0.000, Ankit took over 50% of the stock at a discount of 3
30 on cost.
stock was sold off at a profit of
the remaining includedin creditors was settled at
for damages
liabilits under a suit Total creditors of the
frm were ?
(1) A
13.000 provided in the books. along with interest 50,000,.
onls ? paid off of
Bobbr's sisters loan of ? 20.000 was 12,500. 2,000.
(ii) at
12.000 was settled
fit) Kartik's ILoan
of ? Journal [CBSE 2019(6% 11
Ans. L.F.
Particulars
Dr
Dr. (")
Date

2018
Ankt's Capita A/c
Dr
32.000
March 3
Bank Cash A/c 52,000
To Realisation Ac
(0) sold at a profit)
by Ankit. remaining
Being stock taken over
Dr
32.000)
Realisaton A/c (37,000 + 69.000
()
Ac
To Bank/ Cash
to creditors)
(Being payment made
Dr
Realisation Ac 22,000
(i)
To Bank Cash A/c
paid along with interest)
(Being Bobby's sister's loan
Dr 12,000
Kartik's Loan Wc
(v) Ans.
Dr 500
Realisation A/c

To Bank/ Cash A/c 1250:

(Being Kartik's ioan setied)

in a firm sharing profits in the ratio

of7:8. On lst Aoril. 29:
0.5. Prem and Suresh were partnerstransferring assets (other than cash) and outsider's liabjiliüs
their firm was dissolved. After
following information:
realisation account, you are given the 3,00,000D
valued at 7,00,000 and paid
(a) Raman, a creditor of ?4,00,000 accepted land
firm.
accepted 90,000 in cash and investmentsof l4N
(b) Gopal, a second creditor for ?1,05,000
in full settlement of his account.
accepted stock of the book value of to
(c) Hari,a third creditor amounting to 75,000
45,000 and the balance was paid to him by cheque.
(d) Loss on dissolution was ?45,000. (CBSEAI.Y:
the books ofthefirm.
Pass necessary journal entries for the above transactionsin
Ans. In the books of Prem and Suresh
Journal Dr.()
L.F.
Date Particulars 3,0000

2015 (a) Cash/Bank Ac Dr

Apr 1 To Realisation A/c

(Being payrnernt received frorn creditor)

I92/xa idea Accountancy-XlI

 RealisationA/c Dr 90,000
To Cash/Bank A/c 90.000

made to creditor)
Being partial payment
RealisationAlc Dr 30,000
(C) ToBank Alc 30,000

Being partial payment made to creditor)

Prem's CapitalAlc Dr. 21,000
Suresh's Capital Alc Dr. 24,000
To Realisation A/c 45,000

transferred | to partners'
(Beingloss on reeaalisation capital accounts)

Xand Yare partners sharing profits and losses equally. They decided to dissolve their firm.
06 journal entries for settlement of creditors through assets in the following alternative
Give
cases:

A, a
()already
crreditor (already transferred to Realisation Account) for 725,000 accepted furniture
transferred to Realisation Account) at 36,000, in full settlement of his claim.
(already transferred to Realisation Account) for 25,000 accepted furniture
B, a creditor
(i) lalready transferred to Realisation Account) at 20,000 in settlement of his claim.
A C. a creditor (already transferred to Realisation Account) for 30,000 agreed to take
Machinery (already transferred to Realisation Account) at 48,000 (book value 750,000) in
settlement of his claim.
() D.a creditor of 20,000(unrecorded in the books) agreed to accept computer (unrecorded in
the books) at 15,000 plus2,000 in full settlement of his claim. (Competency Based Question]
Books of X and Y
Ans.
Journal
Date Particulars L.F. Dr. () Cr. ()

(No entry)
( Realisation Alc Dr 5,000
5,000
To Cash Alc
(Being creditor of 25,000 accepted furniture at 20,000 in settlement of
his claim and balance paid in cash)
Cash A/c Dr 18,000
To Realisation A/c
18,000
(Being creditor of 730,000 accepted machinery at 48,000 and balance
amount received from him)
(iv) Realisation Alc Dr 2,000
2,000
To Cash Ac
(Being unrecorded creditor accepted unrecorded computer at 15,000
and balance of T2,000 paid in cash in full settlement of his claim)
Q.7. Give necessary journal entries in each of the following cases at the time of dissolution of firm:
Expenses of realisation amounted 7,400.
) Expenses of realisation 7400 were paid by Ravi, a partner.
(ii) Realisation allowed a
expenses were to be borne by Deepak, a partner, for which he was
of 2% on net cash realised from dissolution. The net cash realised from
commission was 1,00,000 and actual realisation expenses were ?7,400.
dissolution
") Expenses of realisation ?7,400 were to be borne by Khan, apartner. Khan used firm's cash
Tor paying these
expenses.
Dissolution of A Partnership
 Journal Entries
Ans.
L.F.
Date Particulars Dr. Dr. (?)
(i) Realisation A/c
To Cash Alc
7,400 C.()
(Being payment of
realisation expenses
made)
Dr.
7AS
Realisation A/c 7,400
To Ravi's Capital Alc
by Ravi)
(Being realisation expenses paid Dr.

(i) Cash A/c 1,00,000

To Realisation A/c

(Being the net amount

realised from assets)
Dr. 1,00.000
Realisation A/c 2,000 Lon
Alc
To Deepak's Capital
(Being commission allowed @2% on 1,00,000)
Dr.
2,000 0.1.

(iv) (a)
Realisation Alc 7,400
To Khan's Capital A/c 7400
remunerated to the partner Khan)
(Beingrealisation expenses
Dr.
(b)
Khan's Capital A/c 7,400
To Cash A/c
expenses made by the firm on behalf 7,40
(Being the payment of realisation
of the partner)
0.8. L.Kand Lwere partners in a firm sharing prohts in the ratio of 4:5: l. On 31st March 90103.
frm was dissolved. On this date, the Balance Sheet showed a balance of 1.34.000 i n
Account and abalance of 14,000 in Provision for Bad Debts Account. Both the accounts wer
closed by transferringtheir balances to Realisation Account. 4,000 of the debtors became bi
and nothing could be realisedfrom them on dissolution. K agreed to look after the dissoluit
work for which he was allowed a remuneration of 16,000. K also agreed to bear dissoluton
expenses for which he was allowed a lumpsum payment of 4,000. Actual dissolution expens
were T6.500 and the same were paid from the firm's cash. Loss on dissolution amounted o
737,000.
Pass necessary journal entries for the above transactions in the books of the firm on is
dissolution. [CBSE 2019(67/43])
Ans. In the Books of J, K and L
Journal Ans.
Date Particulars Dr.) Cr.
L.F.
2018

Mar. 31

Bank A/c Dr.

1,30,000
1.3001
To Realisation Ac

(Being amount realised from debtors)

(i) 16,000
Realisation A/c Dr.
To K's Capital A/c
(Being remuneration paid for dissolution work)
4,000
(üi) Realisation A/c Dr.
ToK's Capital Alc
(Being amount credited for
dissolution expenses)
idea Accountancy-X|
 K's Capital A/c Dr 6,500
ToBank Alc 6,500
expenses paid by firm on behalf of partner, K)
(Being realisation
J'sCapital A/c Dr 14.800
()
K's Capital A/c Dr 18,500
L's Capital A/c Dr. 3,700
ToRealisation Ac 37,000

loss transferred to Partners' Capital A/cs)

(Beingrealisation

Long.Answer Questions [6,8 Marks]

Shantiand Satya were partners
in afirm sharing profits in the ratio of 4: 1. On 31st March, 2019
e . Balance Sheetwas asfollows:
their
Balance Sheet of Shanti and Satya
as at 31st March, 2019
) Assets ()
Liabilities 55,000
45,000 Bank
Creditors 60,000
Workmen Compensation Fund 40,000 Debtors
65,000 Stock 85.000
Satya's Current Account
1,00,000
Furniture
Capitals: 1,30,000
2,00,000 Machinery
Shanti 1,00,000 Shanti's Current AccOunt 20,000
Satya 4,50,000
4,50,000

was dissolved:
On the above date the firm remaining stock was
Shanti took over 40% of thestock at 10% less than its book value and the
() 80,000.
sold for 40,000.Furniture realised Machinery was sold at a loss of
was sold for 20,000.
(ii) An unrecorded investment
Z60,000.
(ii) Debtors realised 55,000.
repairs for which ?19,000 were paid.
(in) There was an outstanding bill for [CBSE 2014]
Prepare Realisation Account Realisation Account
Cr.
Ans. Dr.
()Particulars )
Particulars 45,000
To Debtors Alc
60,000 By Creditors Ac 30,600
Current/Captial Alc
To Stock Alc 85,000 By Shanti's
1,00,000 (34,000 -3,400)
To Furniture A/c Realised
To Machinery Alc 1,30,000 By Bank Ac- Assets 40,000
Stock
To Bank A/c: 80,000
Furniture
Outstanding Bill 19.000
64.000
Investment 20,000

Creditors 45,000 Machinery

70,000
55,000 2,65,000
Debtors
to:
By Loss transferred
Shanti's Current/Capital A/c 78,720
Satya's Current/Capital A/c 19,680 98,400
4,39,000
4,39,000

Dissolution of APartnership Fim/195

0! Srijnn,RamanandMananwerepartnerein afirm sharing profits and \osses in the ratin nf 2:21
BalanceSheet was as follows:
2017their
March, BalanceShectof Srijan, Raman and Manan
3/st
Isal Bl Manh, 2017
On

() Assets

Liabilltles
Capital: Manan
Plant
2,00,000
Canilals
1,50,000 3.50,000 Investments
Srijan
75,000 Stock
Raman

Credilors
40,000 Debtors
BillsPayable 35,000 Bank
OutstandingSalary Profit and Loss Account
5,00,000

Onthe.above
date, they decidedto dissolve the firm: 500,0
realise the assets and discharge the
wasappointedto
() Srijan
commission on sale of assets (except cash) and was to
5%
follows:
liabilitiexpenses
bear all es. Srijanofwas to receive
(ü) Assets were realised as
)
realisation.
Q.3.
85,000
Plant
Stock 33,000
Debtors 47,000
95%of the book value
(iii) Investments were realised at
for an outstanding repair
(iv) The firm had to pay 7,500 bill not provided for
bills receivable, earlier.
(u) Acontingent liability in respect of discounted with the bank
had also
materialised and had to be discharged for 15,000.
(r) Expenses of realisation amounting to 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account
Realisation Account
[CBSE 2018|
Ans. Dr. Cr.
Particulars ()Particulars
To Sundry Assets: By Sundry Liabilities:
Plant 2,20,000 Creditors 75,000 Ans.
Investments 70,000 Bills Payable 40,000
Stock 50,000 Outstanding salary 35,000 1,50,00

Debtors 60,000 4,00,000 2

To Bank Alc: By Bank Alc:
Plant 85.000
Creditors 75,000
Stock 33.000
Bills Payable 40,000
Debtors 47,000
Outstanding repair bill 7,500 2.3151
Investments 66.500
Contingent liability for bill Partners'
discounted 15,000 By Loss transferred to

Outstanding salary 35,000 1,72,500

Capital A/cs:
Srijan
,81.030
81,030
(i)
Raman
To Srijan's Capital Alc 40,515 20283
11,575 Manan
(Commission -2,31,500×5%)

5,84,075

idea Accountancy-XI
 Partners' Capital Accounts Cr.
Srijan Raman Manan Particulars
Particulars Srijan Raman Manan
8) ) ()
ToBalanceb/d 10,000 By Balance bld 2,00,000 1,50,000
A/c 32.000 32,000 16,000 By Realisation Alc 11,575
andLoss
ToProfit 81,030 40,515 By Bank Alc
ToRealisationAlc 81,030 66,515
98.545 36,970
ToBankAC
2,11,575 1,50,000 66,515 2,11,575 1,50,000 66,515

Bank Account Cr.

D
() Particulars
Particulars )
To Balance b/d 10,000 By Realisation A/c 1,72,500
To Realisation Alc 2,31,500 By Srijan's Capital A/c 98,545

Manan's Capital A/c 66,515 By Raman's Capital Ac 36,970

To
3,08,015 3,08,015

3. Simar, Raja
and Rita were partners in afirm sharing profitsand losses in the ratio of 2:2:1. The
Em was dissolved on 31st March, 2019. After the transfer of assets(other than cash) and external
tabilities to the Realisation Account, the following transactions took place:
à Adebtor whose debt of 790,000 had been written off as bad, paid 88,000 in full settlement.
Gi) Creditors to whom 1,21,000 were due to be paid, accepted stock at 71,000 and the
balance was paid to them by a cheque.
Gi) Raja had given a loan to the firm of 18,000. He was paid 17,000 in full settlement of his
loan.
(tu) Investments were 53,000 out of which investments worth 43,000 were taken over by
Simar at 52,000 and the balance of the investments were sold for ? 12,000.
(o) Expenses ondissolution amounted to 19,000 and the same were paid by the firm.
(i) Profit on dissolution amounted to 30,000.
Pass the necessary journalentries for the above transactions in the books of the firm.
[CBSE 2020 (67/2/1)]
Ans.
In the books of Simar, Raja and Rita
Journal
Date Particulars L.F. Dr. (3) Cr. (?)
2019
Mar. 31
Bank/Cash Alc Dr. 88,000
ToRealisation Alc 88,000
(Being debts written off bad, earlier, now
recovered)
Realisation Ac Dr. 50,000
ToBank Alc 50,000
(Being the remaining creditors paid)
Raja's Loan Alc Dr. 18,000
To Cash/Bank Alc
17,000
To Realisation Alc
1,000
(Being Raja's Loan paid in full
settlement)

Dissolution of A Partnership
 Dr.
Simar's Capital A/c Dr. 52,000
Bank/Cash Alc 12,000
To Realisation Alc balance was sold for
and the
by Simar
(Being investment taken Over
cash) Dr.

Realisation Ac
19.000
To CashBank Ac

(5eing the
realisation exDenses
paid by the firm)
Dr.
1909
30,000
(vi) Realisation A/c
To Simar's Capital Alc
To Raja's Capital Ac
accounts in ratio of
12,00,
To Rita's Capital A/c
Realisation profit to
partners capital 600
Being transfer of
e.. Parth and Shivika were partners in afirm sharing profits in the ratio of 3:2. The Balance Sheet
2:2:1)

March. 2014 was as follows:(3) Assets

the firm on 31st
Liabilities 80.000 Bank
Sundry Creditors 20,000 Debtors 11209.
Shivika's Sister's Loan Stock
Capital A s Furniture 50,093)
Parth
1.75.000
3.69,000 2.20030
1,94,000
Shivika 4.69,000
469,0
On the above date. the firm was dissolved. The assets were realisedI and the liabilities s were paid

off as follows: ..
value. The
(à 505 of the furniture was taken
over by Parth at 20% less than book
furniture was sold for 1,05,000.
(ii) Debtors realised 26,000.
Shivika for 29,000.
(iii) Stock was taken over by
along with interest of 2,000.
(iv) Shivika's sister's loan was paid off
amounted to 5,000.
() Expenses on realisation [CBSE Delhi 2013 C1
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
Realisation Account
Ans. Dr.
Particulars
() Particulars
8000
To Debtors A/c
27,000 By Sundry Creditors Alc
2002
To Stock Ac 50,000 By Shivika's Sister's Loan Alc

To Furniture Alc 2,20,000 By Parth's Capital Alc (Furniture)

(1,10,000 - 22,000)
To Bank Ac (Sundry Creditors) 80,000
To Bank Ac ( 20,000 + 2,000) 22,000 By Bank Ac (Assets Realised):
1,05,000
(Shivika's Sister's Loan) Furniture
26.000
To Bank Ac (Expenses) 5,000 Debtors

By Shivika's Capital Alc (Stock)

By Loss transferred to: 33,600
Parth's CapitalAlc
22,400
Shivika's Capital Alc 4

4,04.000

idea Accountancy-XII
 P'artners' Capital Accounts Cr

Parth (?) Shivika (?) Particulars Parth (?) Shivika ()

Particulars
ToRealisationAc
88.000 29,000 By Balance b/d 1,75,000 1,94.000

(Loss) 33.600 22,400

RealisationA/c
To Payment) 53.400 1.42.600
(Final
1oRank Alc 1.75.000 1,94.000 1,75,000 1,94,000

Bank Account Cr.

Dr.
Particulars (?) Particulars (?)

ToBalanceb/d 1,72,000 By Realisation Alc-Sundry Creditors 80.000

Alc-Assets Realised 1,31,000 By Realisation A/c-Shivika's Sister's Loan 22,000

To Realisation
By Realisation A/c-Expenses 5,000

|By Parth's Capital Alc Final Payment 53,400

By Shivika's Capital AWc Final Payment 1,42,600

3,03,000 3,03,000

A.B and C were partners sharing profits and)losses in the ratio of 2 : 2 : 1. Their Balance Sheet as
follows:
at 31st March, 2018 was as
Balance Sheet of A, B and C
as at 3Ist March, 2018
() Assets (?)
Liabilities
Cash at Bank 3,00,000
Capitals:
7,50,000 Sundry Debtors 1,95,000
Less: Provision for Doubtful Debts 5,000 1,90,000
B 3,00,000
13,00,000 Stock 3,00,000
C 2,50,000
Fixed Assets 7,10,000
Creditors 2,00,000
15,00,000 15,00,000

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 1,85,000 in
full settlement of their claim. Expenses on Realisation amounted to ?19,000.
[CBSE 2019(67/4/1))
Pass the necessary journal entries on the dissolution of the firm.
Ans. Journal
Date Particulars L.F, Dr. () Cr. ()
Dr. 12,05,000
Realisation A/c
7,10,000
To Fixed Assets A/c
3,00,000
ToStock Alc
1,95,000
To Debtors Alc

(Being assets transferred to Realisation Alc)

Dr 2,00,000
Sundry Creditors A/c
Dr. 5,000
Provision for Doubtful Debts Alc
2,05,000
ToRealisation A/c
(Being liabilities transferred to Realisation Alc)
(i) Dr. 11,49,000
Bank Alc
11,49,000
To Realisation Alc
(Being asSsets realised)

Dissolution of A Partnership
 (iv) Realisaton A/c
ToBank A/c
settlement)
(Being creditors paid in full Dr
Realisation A/c 19 000
To Bank A/c
paid)
(Being realisation expenses Dr
(v) A's Capital A/c Dr 22.000
B's Capital A/c Dr 22,000
C's Capital A/c
To Realisation A/c
11.000
Partners' Capital A/cs)
realisation debited to S5 00S
(Being loss on Dr.
(vi)
A's Capital A/c
Dr. 7,28,000
B's Capital A/c

C's Capital A/c

Dr. 2,78,000
To Bank A/c
2,39,000
dissolution)
(Being Partners' Capital accounts settled on 12 45 00r
Yogesh as on 31st Marek o
0.6. Following is the Balance Sheet of Vinut and
Balance Sheet
as on 3lst March, 2015
(?) Assets
Liabilities
3.60,000 Bank
Creditors
60,000 Stock 80 00
Mrs. Vinit's Loan
1,00,000 Investments 70 00
Yogesh's Loan
Investment Fluctuation Fund 30,000 Debtors 100 00C
2,00,000
Capitals: Vinit 2,00,000 Less: Provision for Doubtful Debts
20,000
Yogesh 1,00,000 3,00,000 Fixed Assets 180,000
3,30 0
Profit and Loss A/c
8,50,000

The frm was dissolved on 31st March, 2015.The assets were realised and the liabilities were nus
as unde.

(a) Vinit promised to pay off Mrs. Vinit's Loan and took away stock at 20% discount
(6) Yogesh took away 90% of the investments at 10% discount.
(c) Sunil, adebtor of 50,000 had to pay the amount due 3 months after the date of disulon
He was allowed adiscount of 5% for making payment immediately. The remaining deln
were collected in full.
(d) Creditors were paid 3,50,000 in full settlement of their claim.
(e) Fixed Assets realised 2,82,000 and remaining investment realised 7,500.
() There was an old furniture which has been written off completely from the buos l¡n
took away the same for 4,000.
(g)
Realisation expenses 2,000 were paid by Vinit. |CRSEIN
Prepare Realisation A/c, Bank A/c and Partners' Capital
Ans. Dr. A/cs.
Realisation Account
Particulars
To Sundry Assets: () Particulars Debts Ac
Stock By Provision for Doubttul
Fluctuation Fund A
Investments
70,000 By Investments
1,00,000 By Creditors

idea Accountancy-XIl
 2,00,000 By Mrs. Vinit's Loan Alc
Debtors
60,000
FixedAssets
3,80,000 7,50,000 By Vinit's Capital ANc (stock) 56,000
Capital A/c(Mrs. Vinit's Loan) 60,000 By Yogesh's Capital Alc (Investment)
Vinit's (Creditors) 3,50,000 (R90,000-29,000)
To 81,000
Alc
ToBank Capital| A/c(Realisation Expenses) 2,000 By Bank Ac (Assets):
ToVinit's Debtors (R47,500 +1,50,000) 1,97,500
Fixed Assets 2,82,000
Investment 7,500 4,87,000
By Yogesh's Capital A/c 4,000
(Old furniture)
By Loss transferred to:
Vinit's Capital Alc 32,000
Yogesh's Capital Alc 32,000 64,000
11,62,000 11,62,000

Partners' Capital Accounts Cr.

Dr.
Particulars
Vinit Yogesh Particulars Vinit Yogesh
() () ()
ToRealisation A/c 32,000 32,000 By Balance b/d 2,00,000 1,00,000
Loss Alc 20,000 20,000 By Realisation A/c 2,000
ToProfit and
To Realisation Alc 56,000 81,000 By Realisation A/c 60,000
To Realisation A/c 4,000 By Yogesh's Loan Alc 37,000
1,54,000
To Bank A/c (Final Payment)
2,62,000 1,37,000 2,62,000 1,37,000

Bank Account Cr.

Dr

Particulars () Particulars
80,000|By Realisation Alc 3,50,000
To Balance b/d
To Realisation A/c 4,87,000 By Yogesh's Loan Alc 63,000
By Vinit's Capital Alc (Final payment) 1,54,000
5,67,000 5,67,000

Note: Yogesh's Capital Account shows a debit balance of 37,000 after all adjustments. Therefore,
an amount of 37,000, i.e., to the extent of debit balance of his capital account has been
transferred from his Loan Account to his Capital Account.
2 Michael, Jackson and John were partners in a firm sharing profits in the ratio of 3: 1:1. On 31st
March, 201l7, they decided to dissolve their firm. On that date their Balance Sheet was as follows:
Balance Sheet of Michael, Jackson and John
as at 31st March. 2017
Liabilities )Assets
6,000
Creditors 11,500| Bank
48,400
Loan 3.500 Debtors
46,000
Capitals: Less: Provision for Doubtful Debts 2400
Michael 50,000 Stock in Trade 16,000

Jackson 25,000 Furniture

2,000
John 89,000 Sundry Assets
34,000
14,000
1,04,000
1,04,000
It was
)
agreed that:
Mithechael was to take over Furniture at 2,600 and Debtors amounting to 40,000 at 34,400;
Creditors of R10,000 to be paid by him at this figure.
Dissolution of A Partnership
 (ii) Jackson was to take over all the stock in trade at 14.000 and some of the
28,800 (being 10% less than book value).
(ii) John was to take over the remaining Sundry Assets at 90% of the Sundry ssets a
book value and
responsibility for the discharge of the Loan.
(iv) The remaining Debtors were sold to a debt collecting agency for 50% of the
expenses of dissolution 600 were paid by John.
abook s umed ihe
Prepare Realisation.Account, Bank Account and Partners' Capital Accounts. value. The
Ans. Dr.
Particulars
Realisation Account
(*) Particulars
ICBSE 2019 (6752)1
To Debtors 48,400 By Provision for Doubtful Debts A/c
To Stock-in-Trade 16,000 By Creditors
To Furniture
2.000 By Loan 2.400
ToSundry Assets 34,000 By Michael's Capital Alc: 11500
To Michael's Capital A/c (Creditors) 10,000 Furniture
3,500
To John's Capital Alc
Debtors
2,600
Loan 3,500 By Jackson's Capital Alc: 34,400 37 000
Expenses (Realisation) 600 4,100 Stock in trade
To Bank Alc (creditors) 14,000
1,500 Sundry Assets
28,800
By John's Capital Alc: 42,800
Sundry assets
By Bank Alc (Debtors) 1,800
By Partners' Capital A/cs: 4,200
Michael
7,680
Jackson 2,560
John
2.560
1,16,000
12,800
1,16,000
Dr.
Partners' Capital Accounts Cr.
Particulars MichaelJackson John Particulars
Michael Jackson John
)
To Realisation A/c
)
37,000 42,800 1,800 By Balance bld 50,000 25,000 14,000
To Realisation A/c (Loss) 7,680 2,560 2,560 By Realisation A/c 10,000 4,100
To Bank A/c
15,320 13,740 By Bank A/c 20,360
60,000 45,360 18,100 60,000 45,360 18,100
Dr. Bank Account Cr
Particulars
) Particulars
To Balance b/d 1,500
6,000 By Realisation A/c
To Realisation A/c (Debtors) 4,200 By Michael's Capital Ac
15,320

To Jackson's Capital Alc 13,740

20,360 By John's Capital Alc
30,560
30,560

Working Notes:
1. Calculation of the book value of Sundry Assets taken over by Jackson:
728.800 × 100/90 = 32,000
Value of remaining Sundry Assets taken over by John:
*34,000-32,000 = 2,000 and 90% of T2,000 =1,800

202 /xa idea Accountancy-XII

 Debtorsoff740,000 are
. taken over by Michael and the remaining balance is Z8.400
sold for 50% or R4,200.
whichhave been
)
Thereis a deficit in the Capital Account of Jackson and it is assumed that he will bring
neCSsry amount.
" and'Z'are partners in afirm in the ratio of 5:3:2. On 31st December, 2020 the firm was
dissolved. Following are the conclusions on dissolution:
Assets realised
1,70,000 (after aloss of 720,000).
(i)
Liabilities to be paid are T27,000 (including an unrecorded liability of ?1,000).
i)
expenses paid 700.
As2) Realisation
thedate of dissolution partners' capitals were in the ratio of 2:2:1.
l ) On
Realisation Account, Partners' Capital Accounts and Cash Account.
Prepare Cr.
Realisation Account
Dr.
Ans. () Particulars ()
Particulars
1,90,000 By Sundry Liabilities Ac 26,000
Assets Alc
ToSundry 700 By Cash Alc 1,70,000
(Expenses)
To Cash Ac By Capital Alcs (Loss)
ToCashAc:
26.000 X (5/10) 10,850
Sundry Creditors
1,000 27,000 Y (3/10) 6.510
Unrecorded Liability
Z (2/10) 4,340 21,700
2,17,700
2,17,700

Cr.
Partners' Capital Accounts
Dr
Z(3) Particulars X (3) Y (3) Z ()
Particulars X() Y(?)
4,340 By Balance bld 65,600 65,600 32,800
10,850 6,510
To Realisation A/c (loss)
54,750 59,090 28,460
To Cash Ac
65,600 65,600 32,800
65,600 65.600 32,800

Cr.
Cash Account
Dr. (?)
()Particulars
27.000
Particulars
1,70,000By Realisation A/c (Creditors)
To Realisation Alc (Assets Realised)
700
By Realisation A/c (Expenses) 54,750
By X's Capital Alc
59,090
By Y's Capital A/c
28,460
By Z's Capital A/c 1,70,000
1,70,000

Working Note: Memorandum Balance Sheet

()
()Assets
1,90,000
Liabilities (1,70,000 + 20,000)
26.000| Sundry Assets
Sundry Liabilities
Captals: (Balancing figure)
X (2/5) 65,600
Y (2/5) 65,600
1,64,000 1,90,000
2 (1/5) 32,800
1,90,000

Partnership
Dissolution of A
 Ouestions with
lncomplete
firm.
dissolutionofa
Information/Missing Figures
Realisation expenses of 73,000
to fll inthe
timeof
0.1. Atthe of Wilson, a
behalf
partner'. You are required
Journal
blanks: were paid by he
Particulars
L.F. fim
Date Dr.
Dr.(?)
expenses paid by the firm on
(Being the dissolution
behalf of Wilson)

Ans. L.F.
Particulars
Date Wilson's Capital A/c. Dr. Dr. (3)
To Cash/Bank Alc 3,000
by the firm on
(Being the dissolution expenses paid
behalf of Wilson)

Q.2. Atthe time of

dissolution of a partnership firm, a creditor for
valued at 3,00,000 and paid to the
firm 2.40,0required
balance amount. You are 00 accepttoed machinen
following Journal entry:
Journal
complete the
Particulars LF.
Date
Dr
Dr. (3)

(Being the amount received from a creditor after

adjusting the value of machinery)
Ans.
Date Particulars LF. Dr. (?)
Bank Alc Dr 60,000
To Realisation Alc 60,0
(Being the amount received froma creditor after
adjusting the value of machinery)
Q.3. Bora, Singh and Ibrahim were partners in a firm sharing profits in the ratio of 5:3:10
2-3-2019 their firm was dissolved. The assets were realised and the liabilities were paid ott Gn
below are the Realisation Account, Partners' Capital Accounts and Bank Account ofare threquired
e irm.
accountant of the firm left a few amounts unposted in these accounts. You
complete these accounts by posting the correct amounts.
Dr. Realisation Account
Particulars () Particulars
To Stock Ac
10,000 By Provision for doubtful debts AC
To Debtors Alc 25,000 By Sundry Creditors Ac
To Plant and Machinery Alc 40,000 By Bills Payable Ac
To Bank Alc:
By Mortgage Loan A/c
realised:
Sundry Creditors 16,000 By Bank A/c-assets 6,700
Bills Payable 3,400 Stock 12,500 52

Mortgage Loan 15,000 34.400 Debtors 36,000

To Bank Ac Plant & Machinery
To Bank Alc (Outstanding repairs)
400 realised
Alc-unrecordedassets
(Expenses) 620 By Bank
By
1,10,420

Xam idea Accountancy-Xl

 Partners' Capital Accounts Cr.
Bora Singh lbrahim Particulars Bora
Particulars
(?) Singh Ibrahim
() (?)
() (3) (?)
By Balance b/d 22,000 18,000 10,000
To
By General Reserve 2,500
To.....
1,500 500
24,500 19,500 10,500 24,500 19,500 10,500

Bank Account Cr.

Dr.
Particulars () Particulars
(3)
ToBalanceb/d 19,500 By Realisation A/c (liabilities) 34,400
(assets realised) 55,200 By Realisation A/c (unrecorded liabilities)
To Realisation A/c 400

To
By ......sesesseeee.

By
By
By eeeeeeeeeeee.

80,920 80,920

[CBSE Delhi 2015]

Ans. Dr. Realisation Account Cr.
Particulars ) Particulars
()
To Stock A/c 10,000 By Provision for doubtful debts A/c 5,000
To Debtors Alc 25,000 By Sundry Creditors Ac 16,600
ToPlant and Machinery A/c 40,000 By Bills Payable A/c 3,400
To Bank A/c: By Mortgage Loan Alc 15,000
Sundry Creditors 16,000 By Bank Alc - Assets realised:
Bills Payable 3,400 Stock 6,700
Mortgage Loan 15,000 34,400 Debtors 12,500
To Bank Alc (Outstanding repairs) 400 Plant and Machinery 36,000 55,200
To Bank Alc (Expenses) 620 By Bank Alc-unrecorded assets realised 6,220
By Loss transferred to Partners'
Capital Acs:
Bora 5,000
Singh 3,000
Ibrahim 1,000 9,000
1,10,420 1,10,420

Dr Partners Capital Accounts Cr.

Particulars Bora Singh Ibrahim Particulars Bora Singh lbrahim
(?) (?) (3) () (3) (3)
To Realisation A/c
5,000 3,000 1,000 By Balance b/d 22,000 18,000 10,000
To Bank A/c
19,500 16,500 9,500 By General Reserve 2,500 1,500 500

24,500 19,500 10,500 24,500 19,500 10,500

Dr.
Bank Account Cr.
ParTo Balance
ticulars bld () Particulars ()
19,500 By Realisation A/c (liabilities) 34,400
1O
Realisation Alc (assets realised) 55.200 By Realisation A/c (unrecorded liabilities) 400

Dissolution of A Partnership
 6,220 By Realisation A/c (oxponses)
ToRealisation Alc (unrecorded assets) ByBora's Capital Alc
By Singh's Capital Alc
By lbrahim's Capital A/c
19,00
16,500
Q.4.
80,920
Mala, Neela and Kala were partners sharing profits in the ratio of 3:2:1.On 1.3.2019 their firm
9,500
Was dissoived. The assets were realised and liabilities were paid off. The accountant prepared
Kealisation Account, Partners' Capital Accounts and Cash Account, but forgot to post few

these accounts.
amounts and entries in given accounts by posting correct
complete these below
Realisation Account amounts.
Youare required to
Dr. (3) Particulars
Particulars ByProvision for doubtful debts
ToSundry Assets: By Sundry Creditors 1,0
10.000
Machinery 21,000
By Sheela's Loan 15,000
Stock By Repairs and Renewals Reserve 13,000
20,000
Debtors By Cash - Assets sold: 1200
400
Prepaid Insurance
3,000
54.400 Machinery 8,000
Investments
13,000 Stock 14,000
A/c-Sheela's Loan
To Mala's Capital Debtors
15,000 16,000
To Cash - Creditors paid
5,000 By Mala's Capital Investments
38,000
Dishonoured bill paid
To Cash 2,000
800 By
To Cash - Expenses

88,200 88,20

Partners' Capital Accounts Cr

Dr.

Particulars Mala (?) Neela () Kala () Particulars Mala () Neela () Kala )

To By eeeseesue

To By
1,000
To Cash Alc 12,000 9,000 By Cash Alc
15,000 300
23,000 15,000 3,000 23,000

Dr. Cash Account

Particulars () Particulars 1501"

To Balance bld
2,800 By Realisation Alc- Creditors paid
To
Realisation A/c- Sale of assets 38,000 By Dishonoured bill
To Kala's Capital Alc 1200
1,000 By
By Mala's Capital Alc
4180

By Neela's Capital Alc

[CBSE(ADM15
41,800

206 /Xam idea

 Realisation Account Cr.

Dr. (8) Particulars

Particulars
By Provision for doubtful debts 1,000
ToSundryAssets
10,000 By Sundry Creditors 15,000
Machinery
21,000 By Sheela's Loan 13,000
Stock
20,000 By Repairs and Renewals Reserve 1,200
Debtors
PrepaidInsurance
400 By Cash - Assets sold:
3,000 54,400 Machinery 8,000
Investments
Loan 13,000 Stock 14,000
- Sheela's
Mala's Capital AC 38,000
15,000 Debtors 16,000
-Creditorspaid
To Cash 2,000
Dishonoured billpaid 5,000 By Mala's Capital Investments
ToCash- 800 By Loss Transferred to Partners'
Expenses
ToCash- Capital A/cs:
Mala 9.000

Neela 6,000
Kala 3,000 18,000
88,200
88.200

Cr.
Partners' Capital Accounts
Dr.
Kala () Particulars Mala () Neela () Kala ()
Particulars
Mala ) Neela ()
3,000 By Balance b/d 10,000 15,000 2,000
To Realisation Alc 9,000 6,000
By Realisation Alc 13,000
To Realisation A/c 2,000
(Sheela's Loan)
(Investments)
By Cash A/c 1,000
To Cash Alc 12.000 9,000
23,000 15,000 3,000
23,000 15,000 3,000
Cr.
Cash Account
Dr.
(K) Particulars
Particulars
paid 15,000
2,800 By Realisation Alc - Creditors
To Balance b/d 5,000
To Realisation A/c - Sale of assets 38,000 By Dishonoured bill
800
(Expenses)
To Kala's Capital AC
1,000 By Realisation A/c
12,000
By Mala's Capital A/c
9,000
By Neela's Capital Ac
41,800
41.800
related to
the following accounts which are
Q.5. Complete the missing figures and entries in
dissolution of the firm of P. Q and R: Realisation Account Cr.
Dr.
(3)
() Particulars
Particulars
To 7,00,000 By Bank Loan
A/c
4.00,000
Land and Building Alc A/c
1,00,000
By Sundry Creditors
To Sundry 3,00,000 90,000
Debtors A/C
To Stock Ac 1,00,000 By Q's Capital A/c
(Computer)
Capital Alc
1O Bank Ac (Repair of 20,000 By P's
Computer)
Dissolution of A Partnership
 25,000 (Land and Building)
To Bank Alc (Creditors) By Shares in BPL Limited Alc
To P's Capital Alc (Bank Loan) 20,000 (5,000 x 100)
(Loss)
To Shares in BPL Limited A/c
(R5,00,000 4,80,000)

P's Capital A/c (2/5)

Q's Capital A/c (2/5)
R's Capital A/c (1/5) 16,90,000

Partners' Capital Accounts

Dr.
Q() R() Particulars
Particulars P ()
80,000By Balance b/d
P() Q)
4,50,000
2,55,000 RR)
To Balance b/d
By General Reserve
To Realisation Ac 24,000
2,40,000 2,40,000 By Realisation Ac 24,000
To Shares in
(Profit)
12,00
BPL Limited A/c
84,000 By .....
To Bank Alc
(Final Payment) By Bank A/c
9,24.000 3,30,000 80,000 1,000 43,0
9,24,000 3,30,000 80,00)
Dr.
Bank Account
Particulars (3) Particulars
To Balance b/d 85,000By Realisation Ac (Repair of Computer)
To ...... By Realisation Ac (Creditors)
To Q's Capital A/c (Cash Brought in) 1,000 By P's Capital Alc (Final Payment)
1,29,000
1,29,0
Ans. Dr.
Realisation Account
Particulars
(3) Particulars
To Land and Building Alc
7,00,000 By Bank Loan Alc 4,00,0
To Sundry Debtors Alc
3,00,000 By Sundry Creditors Alc 1,0,00
ToStock Alc
To Bank Alc
1,00,000 By Q's Capital A/c (Computer) 90,0
(Repair of Computer) 20,000 By P's Capital Alc (Land and Building) 60000
To Bank Ac (Creditors)
5,0000
To P's Capital Alc 25,000By Shares in BPL Limited Alc (5,000 %*100)
(Bank Loan) 4,00,000
To Shares in BPL
Limited A/c (Loss) 20,000
To (75,00,0004,80,000)
Profit transferred to
P's Capital Alc (2/5)
Partners' Cap. A/cs:
50,000
Q's Capital Alc
(2/5) 50,000
R's Capital Alc
(1/5) 25,000 1,25,000 169003

16,90,000

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