[6] Dissolution of Partnership Firm - Practical problem - (Balbharati Book Keeping and Accountancy 12th Board Exam)
Practical problem | Q 4 | Page 245
Asha, Usha, and Nisha were partners sharing Profits and Losses in the ratio of 2:2:1. The following is the Balance Sheet as on 31st March 2019.
Balance Sheets as on 31st March 2019
Liabilities | Amount ₹ | Assets | Amount ₹ | |
Capital Accounts : | Machinery | 1,00,000 | ||
Asha | 1,20,000 | Investment | 48,000 | |
Usha | 40,000 | Debtors | 1,10,000 | |
Nisha | 40,000 | Less: R. D. D. | 6,000 | 1,04,000 |
General Reserve | 12,000 | Stock | 40,000 | |
Creditors | 80,000 | Profit and Loss A/c | 36,000 | |
Asha’s Loan A/c | 16,000 | Bank | 8,000 | |
Bills payable | 28,000 | |||
3,36,000 | 3,36,000 |
On the above date, the partners decided to dissolve the firm.
1. Assets were realised as under Machinery ₹ 90,000, Stock ₹ 36,000, Investment ₹ 42,000 and Debtors ₹ 90,000.
2. Dissolution expenses were ₹ 6,000.
3. Goodwill of the firm realised ₹ 48,000
Pass Journal Entries to close the books of firm. :
SOLUTION: In the books of Asha, Usha and Nisha
Journal Entries
Date | Particulars | Amount (₹) | Amount (₹) |
1 | Realisation A/c Dr | 2,98,000 | |
To Machinery A/c | 1,00,000 | ||
To Investments A/c | 48,000 | ||
To Debtors A/c | 1,10,000 | ||
To Stock A/c | 40,000 | ||
(Being sundry assets transferred to realisation A/c) | |||
2 | Creditors A/c Dr | 80,000 | |
Bills Payable A/c | 28,000 | ||
R.D.D. A/c Dr | 6,000 | ||
To realisation A/c | 1,14,000 | ||
( Being sundry liabilities transferred to realisation A/c) | |||
3 | General reserve A/c Dr | 12,000 | |
To Asha’s Capital A/c | 4,800 | ||
To Usha’s Capital A/c | 4,800 | ||
To Nisha’s Capital A/c | 2,400 | ||
(Being General reserve transferred to Partners’ Capital A/c) | |||
4 | Bank A/c Dr | 3,06,000 | |
To Realisation A/c | 3,06,000 | ||
(Being assets realised) | |||
5 | Realisation A/c Dr | 1,14,000 | |
To Bank A/c | 1,14,000 | ||
(Being Liabilities paid off) | |||
6 | Realisation A/c Dr. | 8000 | |
To Asha’s Capital A/c | 3200 | ||
To Usha’s Capital A/c | 3200 | ||
To Nisha’s Capital A/c | 1600 | ||
( Being realisation profit transferred to Partner’s Capital A/c) | |||
7 | Asha’s Capital A/c Dr | 113600 | |
Usha’s Capital A/c Dr | 33600 | ||
Nisha’s Capital A/c Dr | 36800 | ||
To Bank A/c | 184000 | ||
(Being final settlement made) | |||
1036000 | 1036000 |
Working Notes :
In the books of Asha, Usha and Nisha
Realisation Account
Particulars | Amount (₹) | Amount (₹) | Particulars | Amount (₹) | Amount (₹) |
To Sundry Assets A/c | By Sundry Liabilities A/c | ||||
Machinery | 1,00,000 | Creditors | 80,000 | ||
Investments | 48,000 | Bills Payable | 28,000 | ||
Debtors | 1,10,000 | R.D.D | 6,000 | 1,14,000 | |
Stock | 40,000 | 2,98,000 | By Bank A/c | ||
To Bank A/c | Machinery | 90,000 | |||
Dissolution Expense | 6,000 | Stock | 36,000 | ||
Creditors | 80,000 | Investments | 42,000 | ||
Bills Payable | 28,000 | 1,14,000 | Debtors | 90,000 | |
To Partners’ Capital A/c (Profit on realisation transferred) | Goodwill | 48,000 | 3,06,000 | ||
Asha | 3,200 | ||||
Usha | 3,200 | ||||
Nisha | 1,600 | 8000 | |||
420000 | 420000 |
Partners’ Capital Accounts
Particulars | Asha (₹) | Usha (₹) | Nisha (₹) | Particulars | Asha (₹) | Usha (₹) | Nisha (₹) |
To Profit and Loss A/c | 14,400 | 14,400 | 7,200 | By Balance b/d | 1,20,000 | 40,000 | 40,000 |
To Balance c/d | 1,13,600 | 33,600 | 36,800 | By Realisation A/c – Profit | 3,200 | 3,200 | 1,600 |
By General reserve A/c | 4,800 | 4,800 | 2,400 | ||||
128000 | 48,000 | 44,000 | 128000 | 48,000 | 44,000 |
Bank Account
Particulars | Amount (₹) | Particulars | Amount (₹) |
To Balance b/d | 8000 | By Realisation A/c (Liabilities | 1,14,000 |
To Realisation A/c (Assets) | 3,06,000 | By Asha’s Loan A/c | 16,000 |
By Asha’s Capital A/c | 1,13,600 | ||
By Usha’s Capital A/c | 33,600 | ||
By Nisha’s Capital A/c | 36,800 | ||
3,14,000 | 3,14,000 |
