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Dissolution Format

The document outlines a balance sheet detailing liabilities and assets, along with a realisation account for transferring assets and liabilities during a partnership dissolution. It includes accounts for partners' loans and capital, as well as a cash/bank account. Precautions for preparing the realisation account are also provided, emphasizing the treatment of tangible and intangible assets.

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Syeda RFathima
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0 views2 pages

Dissolution Format

The document outlines a balance sheet detailing liabilities and assets, along with a realisation account for transferring assets and liabilities during a partnership dissolution. It includes accounts for partners' loans and capital, as well as a cash/bank account. Precautions for preparing the realisation account are also provided, emphasizing the treatment of tangible and intangible assets.

Uploaded by

Syeda RFathima
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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BALANCE SHEET

Liabilities ₹ Assets ₹
Creditors Cash
Reserves Debtors
Loan by Mrs A Less: Provision
Bills Payable Stock
Profit and Loss (cr) Prepaid Insurance
Capital Accounts: Land and Building
A Profit and Loss (Dr)
B Machinery

Dr. REALISATION ACCOUNT Cr.


PARTICULARS ₹ PARTICULARS ₹

Transfer of Assets at XXX Transfer of Liabilities at XXX


Book Value Book Value

✓ All Assets XXX ✓ All Liabilities XXX


✓ Debtors full Amount XXX ✓ Provision full Amount XXX

Except X Cash / Bank Except X Partners’ Capitals


X Profit and Loss (Dr) X Profit and Loss (Cr)
X Advertisement X Reserves
Suspense A/c X Bank Overdraft
X Deferred Revenue X Partners’ Current
Expenditure X Drawings

Realisation of Liabilities Realisation of Assets


To Bank A/c XXX By Bank A/c XXX
(Amount paid on discharging (Assets Sold and amount
of Liabilities) received on Realisation of
Assets)

To Bank A/c XXX By Bank A/c XXX


(Liability taken over by a (Assets taken over by a partner)
partner or any expenses paid
by him or remuneration/ By Bank A/c XXX
commission payable to him) (Amount received from
unrecorded Assets)

To Profit transferred to XXX By Loss transferred to XXX


(all partners in their profit- (all partners in their profit-
sharing ratio) sharing ratio)

Dr. PARTNER’S LOAN ACCOUNT Cr.


Particulars Particulars
To Bank A/c (Payment) XXX By Balance b/d XXX

XXX XXX
Dr. PARTNERS' CAPITAL ACCOUNT Cr.
Particular A B Particular A B

To Balance b/d XXX XXX By Balance b/d XXX XXX


(Assets side) (Liability side)
To Current, Drawings, XXX XXX By Current, Drawings, XXX XXX
Loans A/c (Assets side) (Liabilities side)

To P/L A/c (debit balance) XXX XXX By Reserves XXX XXX

To Deferred Revenue XXX XXX By P/L A/c (Credit XXX XXX


Expenses A/c balance)
To Realisation A/c XXX XXX By Realisation A/c XXX XXX
(Assets taken) (Liabilities taken)
To Realisation A/c (Loss) XXX XXX By Realisation A/c XXX XXX
(Profit)
To Cash/Bank A/c XXX XXX
(Bal. fig.) By Cash/Bank A/c
(Final payment) XXX XXX (Bal. fig.)
XXX XXX (Final payment) XXX XXX

Dr. CASH/BANK ACCOUNT Cr.


Particulars Particulars

To Balance b/d XXX By Balance b/d XXX


(Assets side) (Liabilities side)
To Realisation A/c XXX By Realisation A/c XXX
(Assets realized) (Liabilities paid)
To Partner's Capital A/c XXX By Partner's Loan A/c XXX
(Cash brought) (Payment)
By Partner's Capital A/c XXX
(Final payment)
XXX XXX

Precautions while Preparing Realisation Account


(a) If question is silent about realised value of Tangible Assets, it should be
considered to be realised at book value itself.

(b) If question is silent about realised value of Intangible Assets, accrued income
and prepaid expenses, it should be considered as nil (zero value)

• Tangible Assets are the assets which have physical existence, i.e., assets
which can be seen and touched. Examples: Land, Building, Furniture, Computers, etc.
Investments are also tangible asset as they have physical existence.
Investment may be in land, building and shares in companies etc.

• Intangible Assets are the assets which do not have physical existence, i.e., assets which
cannot be seen and touched. Examples: Software, Trade Mark, Goodwill, Patents, Copy
Rights etc. These assets including accrued income and prepaid expenses are not shown
as realised unless realised value of such assets is not given.

• Investment fluctuation fund, Provisions for doubtful debts, Provision or reserve for
depreciation are not liabilities. These are not liabilities. Then these are not paid as
liabilities. Other liabilities are paid at their book values if there is no information given.

• If partners have taken over any Liability and Asset for full settlement then it is not
needed to be recorded.

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