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Dissolution

The document outlines the dissolution of various partnership firms, detailing their balance sheets, asset realizations, and necessary journal entries for each case. It includes specific financial figures for liabilities and assets, as well as the distribution of profits and losses among partners. The document emphasizes the steps required to settle accounts and realize assets during the dissolution process.

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54 views3 pages

Dissolution

The document outlines the dissolution of various partnership firms, detailing their balance sheets, asset realizations, and necessary journal entries for each case. It includes specific financial figures for liabilities and assets, as well as the distribution of profits and losses among partners. The document emphasizes the steps required to settle accounts and realize assets during the dissolution process.

Uploaded by

prateek
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.Uday and Prabhakar are partners sharing profit and losses in the proportion of 3/5 and 2/5 respectively.

They
dissolved their partnership firm on 31st March, 2012 when their financial position was as under.
Balance Sheet as on 31st March, 2012
Liabilities Amount Assets Amount
Sundry creditors 15000 Cash at bank 3000
Uday’s wife’s loan 30000 Debtors 67500
Capital A/c (-) R.D.D. -7500 60000
Uday 138000 Stock 135000
Prabhakar 90000 Machinery 45000
Furniture 30000
273000 273000

The assets were realised as under:


Goodwill Rs. 15,000, Stock Rs. 1,20000 and Debtors Rs. 54,000.
Machinery was taken over by Prabhakar at Rs. 40000 and furniture by Uday at book value.
Uday agreed to discharge his wife’s loan.
The creditors were paid at a rebate of Rs. 3,000
The expenses of dissolution amounted to Rs. 6000
Pass necessary Journal Entries in the books of the firm.

2. X and Y are equal partners. The firm was dissolved on 31st March, 2012.
The following is their Balance Sheet as on 31st March, 2012.
Liabilities Rs. Rs. Assets Rs. Rs.

X’s Capital 40000 Building 30000


Y’s Capital 30000 Machinery 10000
Reserve Fund 8000 Furniture 12000
X’s Loan 2000 Debtors 8800
Creditors 15000 Less: R.D.D. - 800 8000
Stock 20000
Investments 4000
Commission Receivable 1000
Bank 10000

95000 95000
The firm was dissolved on 31st March, 2012.
(i) The Assets realised as follows:
Stock Rs. 19,000, Debtors Rs. 7,500, Machinery Rs. 11,000, Building Rs. 14,000
ii. Y took over the investments Rs. 5000 and Furniture at Book Value.
iii. X agreed to accept Rs. 1500 in full settlement of his Loan Account.
iv. Dissolution expenses amounted to Rs. 2000.
v. Commission Receivable could not be recovered.
Prepare Realisation Account, X’s Loan Account, Capital Accounts and Bank Account.
3. Devendra and Ganesh were partners sharing profits and losses in the ratio of 3:2. They dissolved the
partnership firm on 31st March, 2013 when their position was as follows.:
Balance Sheet as on 31. 03. 2013

Liabilities Rs. Rs. Assets Rs. Rs.

Sundry Creditors 12,500 Debtors 56250

Bank overdraft 10,000 (-) R.D.D. ( - ) 6250 50,000

Reserve Fund 15,000 Stock 1,12,500

Capital Accounts Furniture 25,000

Devendra 1,15,000 Motor Car 37,500

Ganesh 75000 190000 Cash in hand 2500

227500 227500

The assets realised as follows:


(1) Debtors Rs. 45,000, stock Rs. 1,00,000 and goodwill Rs. 12,500
(2) Motor car was taken over by Devendra for Rs. 35,000 and furniture by Ganesh for Rs. 30,000.
(3) The creditors were paid Rs. 11,250 in full settlement.
(4) The realisation expenses were Rs. 5,000.
Pass necessary journal entries in the books of the firm.
4. Ganesh and Chandan were partners sharing profits and losses in the proportion of 3:2. They dissolve partnership
firm on 31st March, 2011 when their position was as follows:

Balance Sheet as on 31st March, 2011

Liabilities Amount Amount Assets Amount Amount

Sundry Creditors 25000 Debtors 112500

Bank Overdraft 20000 Less: R.D.D. -12500 100000

Reserve Fund 30000 Stock 225000

Capital A/c Furniture 50000

Ganesh 230000 Motor Car 75000

Chandan 150000 Cash in 5000


Hand

455000 455000

The Assets realised as follows: Debtors Rs. 90,000, Stock Rs. 2,00,000, and Goodwill Rs. 25000,, Motor Car was taken
over by Ganesh for Rs. 70,000 and Furniture by Chandan for Rs. 60,000. The Creditors were paid Rs. 22500 in full
settlement. The expenses of realisation amounted to Rs. 10,000. Pass necessary journal entries in the books of the firm.
4. Pannalal, Babulal and Hiralal were partners sharing profits and losses in the proportion of 2: 2: 1. Following is their
Balance Sheet as on 31st March, 2008: (Textbook Problem No. 6)

Balance Sheet as on 31st March, 2008

Liabilities Amount Amount Assets Amount Amount

Capital A/c Machinery 25000

Pannalal 30000 Stock 10000

Babulal 10000 Debtors 27500

Hiralal 10000 (-) R.D.D. -1500 26000

General Reserve 3000 Investments 12000

Creditors 20000 Profit & Loss A/c 9000

Pannalal’s Loan A/c 4000 Bank 2000

Bills Payable 7000

84000 84000

On the above date the partners decided to dissolve the firm:

1. Assets were realised: Machinery Rs. 22500, Stock Rs. 9000, Investments Rs. 10,500, Debtors Rs. 22500.

2. Dissolution expenses were Rs. 1,500.

3. Goodwill of the firm realised Rs. 12000.

Pass the necessary Journal Entries in the Books of the firm.

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