Page 208 - DEBKVOL-1

Chapter 8 Dissolution of a Partnership Firm 8.33
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Unsolved Questions

1. B, C and D are partners in a firm sharing profits in the ratio of 2 : 1 : 2 respectively. On 1st March, 2013 the
firm was dissolved. After transferring assets (other than cash) and third party liabilities to the ‘Realisation
Account’ you are provided with the following information:
(a) There was a debit balance of ` 24,000 in the firm’s Profit and Loss Account.
(b) A piece of machinery not recorded in the books was sold for ` 4,000.
(c) Creditors of ` 50,000 were paid ` 45,000 in full settlement of accounts.
Pass necessary Journal entries for the above transactions in the books of the firm at the time of
dissolution. (AI 2013 C)
[Hints: (a) Dr. B’s Capital A/c ` 9,600; C’s Capital A/c ` 4,800 and D’s Capital A/c ` 9,600.
Cr. Profit and Loss A/c ` 24,000.
(b) Dr. Bank A/c and Cr. Realisation A/c by ` 4,000.
(c) Dr. Realisation A/c and Cr. Bank A/c by ` 45,000.]
2. X, Y and Z are partners in a firm. Their profit-sharing ratio is 5 : 3 : 2. Pass necessary Journal entries for the
following transactions at the time of dissolution of the firm:
(a) Realisation expenses ` 5,000 paid.
(b) Realisation expenses amounted to ` 3,000. Mr. X, one of the partners, has to bear these expenses.
(c) Y, one of the partners, took over a machine for ` 10,000.
(d) Z, one of the partners, agreed to take over the Creditor of ` 30,000 for ` 20,000.
(e) Y, one of the partners, had given loan to the firm of ` 20,000. It was paid back to him at the time of
dissolution.
(f) Profit and Loss Account balance of ` 50,000 appeared on the assets side of the Balance Sheet.
(g) Bank loan ` 50,000 was paid.
(h) An unrecorded asset realised ` 17,000.
(i) Stock worth ` 20,000 was taken over by Z for ` 14,000.
(j) Gain (Profit) on Realisation of ` 30,000 is to be distributed between partners X, Y and Z.
3. Dipali and Rajashri are partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to
dissolve their firm on 31st March, 2018, when their Balance Sheet was:
Liabilities ` Assets `
Capital A/cs: Freehold Property 16,000
Dipali 17,500 Investments 4,000
Rajashri 10,000 27,500 Sundry Debtors 2,000
Sundry Creditors 2,000 Stock 3,000
Profit and Loss A/c 1,500 Bank 2,000
Cash 4,000
31,000 31,000
The partners decided to dissolve the firm on the above date. Dipali took over the Investments at an agreed
value of ` 3,800. Other assets were realised as follows:
Freehold Property: ` 18,000; Sundry Debtors: ` 1,800; Stock: ` 2,800.
Creditors of the firm agreed to accept 5% less. Expenses of realisation of assets amounted to
` 400. There was a computer printer in the firm, which was bought out of the firm’s money, was not shown
in the above Balance Sheet. It is now sold for ` 1,000.