1) Sunny and Bobby were partners in a firm sharing profits and losses in the ratio of 3:2, their

balance sheet as at 31st March, 2012:

Liabilities Amount Assets Amount
Creditors 1,90,000 Bank 5,000
Bills Payable 1,10,000 Fixed Deposits 70,000
Employees provident fund 50,000 Stock 86,000
Mrs. Sunny’s Loan 55,000 Investments 1,04,000
Bobby’s Loan 85,000 Debtors 1,77,000
(-) Provision for D/D (12,000) 1,65,000
Investment Fluctuation Fund 30,000
Capitals: Other Fixed Assets 3,80,000
Sunny 2,20,000 Deferred Revenue Expenditure 35,000
Bobby 1,20,000 3,40,000 Sunny’s Loan 15,000
8,60,000 8,60,000

The firm was dissolved on 31st March, 2012. The assets were realized and the liabilities were paid as
under:
a) Sunny promised to pay off Mrs. Sunny’s Loan.
b) Bobby took away stock at 20% discount and 80% of the investments at 10% discount.
c) Dharam, a debtor of Rs. 60,000 had to pay the amount due 2 months after the date of dissolution.
He was allowed a discount of 9% p.a. for making immediate payment.
d) Creditors were paid Rs.1,75,000 in full settlement of their claim.
e) 90% of Other fixed assets realised Rs. 1,98,000 and remaining were realised at discount of 15%.
f) Balance of investments were sold at 75% value and Fixed Deposits were realised at 110%.
g) There was an old furniture which has been written off completely from the books, Bobby took away
the same for Rs. 41,000 against his loan and balance was given in cash.
h) Realisation expenses Rs. 20,000 were paid by Sunny and Bobby equally on behalf of the firm.
You are required to prepare Realisation A/c
2) Carol and Lacy were partners. They decided to dissolve their firm. Pass the journal entries
for the following after various assets and external liabilities have been transferred to
Realisation A/c:
a) Carol took over half of the investments worth Rs. 30,000 at 2% discount and the remaining
investments were sold at a profit of 18% of the book value.
b) Lacy is allowed a remuneration of Rs. 13,000 for dissolution work and is to bear all the expenses of
realisation which amounted to Rs. 5,000 were paid by the firm.
c) Carol had given a loan of Rs. 89,000 to the firm which was duly paid.
d) Lacy agreed to pay off her brother’s loan of Rs. 13,000 at a discount of 5%.
3) Akum and Bakum are partners sharing profits and losses in the ratio 3:2. The Balance Sheet
of the firm on 31st March 2023 was as follows:
Liabilities Amount (₹) Assets Amount (₹)
Creditors 60,000 Cash in Hand 10,000
Bills Payable 20,000 Debtors 70,000
Employees Provident Fund 50,000 Stock 70,000
Reserve Fund 20,000 Plant & machinery 40,000
Capital Building 80,000
Akum 90,000 Profit and Loss 20,000
Bakum 70,000 1,60,000 Loan to Rajan 20,000
3,10,000 3,10,000

The partners decided to dissolve their firm. Assets are realised as follows: Prepare Realisation Account.
a) Debtors realised ₹ 50,000; stock realised ₹ 80,000.
b) Akum took away the machinery at an agreed value of ₹ 30,000.
c) Bakum takes over the building at a valuation of ₹ 1,00,000 and agrees to pay off creditors at a
discount of ₹ 5,000.
 d) An unrecorded liability of ₹20,000 was discharged by unrecorded asset of ₹ 35,000 in full
settlement.
e) The expenses of realisation came to ₹ 5,000 and were paid by Bakum, however as per agreement
they were to be borne by Akum.
4) Sun and Kiran are partners sharing profits and losses equally. They decided to dissolve their
firm. Assets and Liabilities have been transferred to Realisation Account. Pass necessary
Journal entries for the following:
a) All partners are agreed that the process of realisation at the time dissolution will be accomplished
by Sun for which he will be paid ₹ 10,000 along with the amount of expense which amounted to
2% of total value realised from the Assets on dissolution. Some assets were sold for Cash at a
cumulative Value of ₹ 12,00,000 and the remaining were taken over by creditors at a valuation of
₹3,00,000.
b) Deferred Advertisement Expenditure A/c appeared in the books at ₹ 28,000.
c) Out of the Stock of ₹1,20,000; Kiran (a partner) took over 1/3 of the stock at a discount of 25% and
50% of remaining stock was took over by a Creditor of ₹30,000 in full settlement of his claim.
Balance amount of stock realized at ₹ 25,000.
d) An outstanding bill for repairs and renewal of₹ 3,000 was settled through an unrecorded asset
which was valued at ₹10,000. Balance being settled in Cash.
5) Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into
partnership firm last year only, through a verbal agreement. They contributed Capitals in the
firm and to meet other financial requirements, few partners also provided loan to the firm.
Within a year, their conflicts arisen due to certain disagreements and they decided to
dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal
consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had
transferred various assets and external liabilities to Realisation A/c. Due to her busy
schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On the
date of dissolution, you have observed the following transactions:
a) Dhwani’s Loan of ₹ 50,000 to the firm was settled by paying ₹ 42,000.
b) Paavni’s Loan of ₹ 40,000 was settled by giving an unrecorded asset of ₹ 45,000.
c) Loan to Charu of ₹ 60,000 was settled by payment to Charu’s brother loan of the same amount.
d) Iknoor’s Loan of ₹ 80,000 to the firm and she took over Machinery of ₹ 60,000 as part payment.
You are required to pass necessary entries for all the above mentioned transactions.
6) Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to
dissolve the firm on 31st March 2021. Pass necessary journal entries for the following
transactions after various assets (other than cash) and third-party liabilities have been
transferred to realization account:
a) Old machine fully written off was sold for ₹ 42,000 while a payment of ₹ 6,000 is made to bank for
a bill discounted being dishonoured.
b) Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque,
against the payment of his loan to the firm of ₹1,00,000.
c) Stock of book value of ₹30,000 was taken by Madhav, Madhusudan and Mukund in their profit
sharing ratio.
d) The firm had paid realization expenses amounting to ₹5,000 on behalf of Mukund.
e) There was a vehicle loan of ₹ 2,00,000 which was paid by surrender of asset to the bank at an agreed
value of ₹ 1,40,000 and the shortfall was met from firm’s bank account.
7) Pass necessary journal entries in the following cases on the dissolution of a partnership firm
of partners X, Y, A and B:
a) Realization expenses of Rs. 5,000 were to borne by X, a partner. However, it was paid by Y.
b) Investments costing Rs. 25,000 (comprising 1000 shares), had been written off from the books
completely. These shares are valued at Rs. 20 each and were divided amongst the partners.
c) Y’s loan of Rs.50,000 settled at Rs. 48,000.
d) Machinery (book value Rs. 6,00,000) was given to creditor at a discount of 20%.
8) Harish and Gopal were partners in a firm sharing profits in the ratio of 3:2. On 31st March,
2018, their Balance Sheet was as follows:
Balance Sheet of Harish and Gopal as at March 31, 2018

Liabilities Amount Assets Amount

(Rs.) (Rs.)
Creditors 36,000 Cash 47,000
Outstanding expenses 10,000 Bank 93,000
Gopal’s wife’s loan 50,000 Debtors 76,000
Capitals:
Harish 2,80,000
Gopal 1,60,000 4,40,000 Stock 2,00,000
Furniture 20,000
Leasehold premises 1,00,000
5,36,000 5,36,000

On the above date the firm was dissolved. The various assets were realized and liabilities were settled
as under:
a) Gopal agreed to pay his wife’s loan.
b) Leasehold premises realised Rs. 1,50,000 and Debtors Rs. 12,000 less.
c) Half of the creditors agreed to accept furniture of the firm as full settlement of their claim and
remaining half agreed to accept 10% less.
d) 50% stock was taken over by Harish on payment by cheque of Rs. 90,000 and remaining stock was
sold for Rs. 94,000.
e) Realization expenses of Rs. 10,000 were paid by Gopal on behalf of the firm.
Prepare Realization Account.

9) Give the necessary journal entries for the following transactions in case of dissolution of a
partnership firm after various assets (other than cash and bank) and third party liabilities
have been transferred to Realisation Account:
a) Dissolution expenses Rs. 5,000 were paid by the firm.
b) An unrecorded computer not appearing in the books of accounts realised Rs. 2,200.
c) A creditor for Rs. 1,40,000 accepted building valued at < 1,80,000 and paid to the firm Rs. 40,000.
d) Loss on realisation Rs. 10,000 was divided between the partners Subhi and Sudha in the ratio of
4:1.

10) Nandu, Bandu and Chandu were partners in a firm. On 31st March, 2023 they decided to
dissolve the firm. Pass necessary journal entries for the following transactions after the
various assets (other than cash and bank) and outside liabilities have been transferred to
Realisation Account:
a) Stock of Rs. 1,40,000 was taken by Nandu at a discount of 30%.
b) Creditors to whom the firm owed Rs. 40,000 accepted stock at Rs. 4,000 and the balance amount
was paid to them by a cheque.
c) An old computer which had been written off completely from the books was sold for Rs. 4,000,
whereas its estimated market value was Rs. 10,000.
d) Chandu had given a loan of Rs. 1,00,000 to the firm, which was paid to him through a cheque.
e) Rs. 24,000 were recovered from a debtor which was written off as bad debt in the previous year.
f) Bandu was appointed to look after the dissolution work for which he was allowed a remuneration
of Rs. 26,000. Bandu agreed to bear the dissolution expenses. Actual dissolution expenses of <
36,000 were paid by Bandhu.