AHSEC/CBSE Accountancy Question Bank: Dissolution of Partnership Firm for Upcoming Exam

AHSEC CLASS 12
ACCOUNTANCY QUESTION BANK

UNIT – 6 Dissolution of Partnership

Q.1. Ram and Shyam share the profits equally. They decided to dissolve their firm. Their liabilities were : Ram’s Capital Rs. 25,000; Shyam’s Capital Rs. 30,000; Creditors Rs. 12,500; Bills payable Rs.7,500; Assets of the firm realized Rs.1,00,000. Prepare a Realization Account.

Q.2. The following is the Balance Sheet of Anju and Manju sharing profits in the ratio of 3:2 as on December 31, 2003 :

Balance Sheet as at December 31, 2003

Liabilities

Amount

Assets

Amount

Creditors

Loan by Anju’s brother

Loan by Manju

General Reserve

Capitals :

Anju

Manju

Profit and Loss

19,000

 5,000

7,500

1,250

 

5,000

4,000

2,500

Plant and Machinery

Furniture and Fixtures

Investment

Stock

Debtors                                                 10,000

Less: provision                                          500

Bank

14,000

2,000

5,000

3,000

 

9,500

5,750

 

41,750

 

41,750

The firm was dissolved on March 31, 2003. As a result,

(a)    Anju took over investments at an agreed value of Rs. 4,000 and agreed to pay loan taken from her brother

(b)   Realization of assets is as follows : Stock Rs. 2,500, Debtors Rs. 9,250, Furniture and Fixture Rs. 2,250, Plant and Machinery Rs. 12,500

(c)    Expenses of realization were Rs. 300

(d)   Creditors allowed 2.5% discount in full settlement. Record necessary journal entries and close the books of the firm.

Q.3. Dinesh, Ramesh and Satish were partners in a firm sharing-profits in the ratio of 5:3:2. They agreed to dissolve their partnership firm on March 31, 2002. Dinesh was asked to realize the assets and pay off liabilities. He had to bear the realization expenses for which he was promised a lump sum amount of Rs. 2,000. Their financial position on that date was as follows :

Balance Sheet as at March 31, 2002

Liabilities

Amount

Assets

Amount

Creditors

Investment fluctuation fund

Capitals :

Dinesh

Ramesh

Suresh

27,500

9,000

 

75,000

30,000

16,000

Plant and Machinery

Investment

Stock

Debtors                                               14,200

Less: provision                                        900

Bank

Profit and losses account

60,000

30,000

11,000

 

13,300

11,200

32,000

 

1,57,500

 

1,57,500

Dinesh agreed to purchase investments at Rs. 25,000. Ramesh took over stock at Rs. 10,500 and Debtors at Rs. 11,800. Plant and Equipment was sold for Rs. 45,000. Unrecorded assets realized cash of Rs. 3,000. Actual realization expenses amounted to Rs. 1,800. Prepare necessary ledger accounts on the dissolution of firm.

Q.4. Lata, Geeta and Neeta were partners sharing profits in the ratio of 5:3:1. They decided to dissolve the partnership on March 31, 2001 and their balance sheet was as under.

Balance Sheet Lata, Geeta and Neeta as at March 31, 2001

Liabilities

Amount

Assets

Amount

Creditors

Bills Payable

Mortgage loan

General Reserve

Capitals :

Lata

Geeta

Neeta

16,600

3,400

15,000

4,500

 

22,000

18,000

10,000

Plant and Machinery

Investment

Stock

Debtors                     25,000

Less: provision          5,000

Bank

Deferred Revenue Expenditure

Suspense

30,000

10,000

10,000

 

20,000

9,500

5,000

5,000

 

89,500

 

89,500

There was a typewriter written off which realised Rs. 500. They had a joint life policy of Rs. 20,000 which was surrendered for Rs. 5,000. Goodwill was sold for Rs. 5,000. Other assets realized – stock Rs. 6,700; debtors 50%; plant and machinery 10% less than its book value. Creditors were paid Rs. 16,000. But an outstanding bill of Rs. 400 for repairs was to be paid off. Expenses on realization amounted to Rs. 620. Give journal entries to record the above transactions and also prepare necessary ledger accounts.

Q.5. Following is the Balance Sheet of Raman and Ramesh on June 30, 2002.

Liabilities

Amount

Assets

Amount

Creditors

Bills Payable

Bank overdraft

Mrs. Raman’s loan

Ramesh’s loan

Investment fluctuation fund

Employees provident fund

Ramesh’s loan

General Reserve

Raman’s Capital

Ramesh’ Capital

20,000

20,000

10,000

5,000

5,000

2,800

1,200

10,000

2,000

20,000

20,000

Goodwill

Building

Plant and fitting

Investment

Stock

Debtors                                                  17,000

Less: provision                                        2,000

Bills Receivable

Deferred Revenue Expenditure

Suspense

10,000

25,000

25,000

15,300

8,700

 

15,000

10,000

2,000

5,000

 

1,16,000

 

89,500

The firm was dissolved on June 30, 2002 and following was the position:

a)      Raman agreed to pay off his wife’s loan.

b)      Debtors realized Rs. 12,000.

c)       Ramesh’s loan transferred to his capital account.

d)      Ramesh took away all the investments at Rs. 12,000.

e)      Other assets realized as follows : Plant and Fittings 20,000, Building 50,000, Goodwill 6,000

f)       Sundry creditors and Bills payable were settled at 5% discount.

g)      Raman accepted stock at Rs 8,000 and Ramesh took over bills receivable at 20% discount.

h)      Realization expenses amounted to Rs. 2,000.

Record journal entries and also prepare various ledger accounts.

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ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)

5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

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Q.6. R, M and H were in partnership sharing profits and losses in the ratio of 8: 5: 3 respectively. The firm’s balance sheet as on 31st March, 2015 was as under:

Balance Sheet

Liabilities

(Rs.)

Assets

(Rs.)

Capitals :

    R          =      5,000/-

    M         =     2,000/-

    H          =     1,000/-

Sundry Creditors

Bank Loan

 

 

 

8,000

2,953

5,500

Current Account :

R        =       2,195/-

M       =       1,733/-

H        =       1,520/-

Machinery

Stock

Sundry Debtors

Cash

 

 

 

5,448

1,050

6,059

3,572

324

 

TOTAL

16,453

TOTAL

16,453

It was resolved to dissolve the partnership as on that date. The assets were realised as follows:

Machinery

Stock

Sundry Debtors

600/-

5,230/-

3,555/-

Pass Journal Entries and necessary ledger Accounts.

Q.7. Kumar and Gaurav are partners sharing profit and losses as three-fourth and one-fourth. They agreed to dissolve their firm. On the date of dissolution, they have following Balance sheet:             (8)   2012

Liabilities

Amount

Assets

Amount

Capital Account:

Kumar 40,000

Gaurav 35,000

Creditor

Loan From Mrs.Gaurav

 

 

75,000

16,000

13,000

Land and Building

Plant and machinery

Sundry Debtors 22,000

Less reserve          2000

Bills receivable

Cash in hand     

50,000

18,000

 

20,000

7,500

8,500

1,04,000

1,04,000

 

 

The Assets Realised as follows:

(i) Land and Building Rs.48, 000

(ii) Sundry Debtors Rs.18, 000

(iii) Goodwill Rs.16, 500

Kumar took over plant and machinery at 5% more than the book value. Gaurav agreed to discharge his wife’s loan. Creditors are paid Rs.12, 000 in full settlement of their claim and expenses on realisation amounted to Rs.700. You are required to show Realisation Account, Cash Account and Capital Accounts of the Partners on dissolution.

Q.8. Amal and Bimal are two partners in a firm. They share profits in the ratio of 3:2. Following is their Balance Sheet as on 31.12.2012 on which date they dissolved their partnership firm:  2014

Balance Sheet

Liabilities

Amount

Assets

Amount

Capital:

Amal  - 20000

Bimal – 15000

Reserve Fund

Creditors

 

 

35000

5000

20000

Fixed Assets

Stock

Debtors

Cash

Profit and Loss Account

30000

10000

15000

3000

2000

 

60,000

 

60,000

Assets are realised as: Fixed Assets Rs.28000, Stock Rs.8000 and Debtors Rs.13000. Creditors were paid at a discount of 10%. Expenses of realisation were Rs.1500. Pass Journal Entries in the books of the firm.

Q.9. A and B are partners sharing profits in the ratio of 3:2. Their Balance Sheet as on 31.03.14 was as follows:        2015

Balance Sheet

Liabilities

Rs.

Assets

Rs.

Capital :

    A = 10,000/-

    B =   2,000/-

General Reserve

Sundry Creditors

 

 

12,000/-

2,500/-

7,500/-

Sundry Assets

Profit & Loss A/c

17,000/-

5,000/-

 

22,000/-

 

22,000/-

The firm is dissolved on the above date. Assets are realised at Rs. 13,500/-. Dissolution expenses came to Rs. 250/-. Give journal entries to close the books of the firm.                                                   

Q.10. R, M and H were in partnership sharing profits and losses in the ratio of 8: 5: 3 respectively. The firm’s balance sheet as on 31st March, 2015 was as under:                   2016

Balance Sheet

Liabilities

(Rs.)

Assets

(Rs.)

Capitals :

    R          =      5,000/-

    M         =     2,000/-

    H          =     1,000/-

Sundry Creditors

Bank Loan

 

 

 

8,000

2,953

5,500

Current Account :

R        =       2,195/-

M       =       1,733/-

H        =       1,520/-

Machinery

Stock

Sundry Debtors

Cash

 

 

 

5,448

1,050

6,059

3,572

324

TOTAL

16,453

TOTAL

16,453

It was resolved to dissolve the partnership as on that date. The assets were realised as follows:

Machinery

Stock

Sundry Debtors

600/-

5,230/-

3,555/-

Prepare Realisation Account.

Q.11. Akash and Bikash are partners sharing profits in the ratio of 3:2. Their Balance Sheet as on 31/03/2016 was as follows:              2017

Balance Sheet

Liabilities

(Rs.)

Assets

(Rs.)

Capital:

      Akash =   12,000/-

      Bikash =    8,000/-

 

General Reserve

Sundry Creditors

 

 

20,000

 

10,000

10,000

Sundry Assets

40,000

 

40,000

 

40,000

The firm is dissolved on the above date. Assets are realized at Rs. 60,000/- Dissolution expenses came to Rs. 2,000/- 5. Pass journal entries.

Q.12. SONU and ASHU were partners sharing profits in the ratio of 3 : 1. Their Balance Sheet as on 31st March, 2017 was as follows:                 2018

Balance Sheet

Liabilities

(Rs.)

Assets

(Rs.)

Creditors

Loan

Capital:

SONU:                            50,000/-

ASHU:                            50,000/-

10,000

20,000

 

 

1,00,000

Cash at Bank

Sundry Assets

Profit and Loss Account

20,000

70,000

40,000

 

1,30,000

 

1,30,000

The firm was dissolved on the above date. The assets were realised at Rs. 50,000/-. Creditors were paid at a discount of 20%. SONU agreed to pay off the Loan. Realisation expenses were Rs. 2,000/-. Prepare Realisation Account, Bank Account and Partners Capital Account.      

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ALSO READ (AHSEC ASSAM BOARD CLASS 12):

1. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE NOTES

2. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION (THEORY)

3. AHSEC CLASS 12 ACCOUNTANCY IMPORTANT QUESTION BANK (PRACTICAL)

4. AHSEC CLASS 12 ACCOUNTANCY PAST EXAM PAPERS (FROM 2012 TILL DATE)

5. AHSEC CLASS 12 ACCOUNTANCY SOLVED QUESTION PAPERS (FROM 2012 TILL DATE)

6. AHSEC CLASS 12 ACCOUNTANCY CHAPTERWISE MCQS

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Q.13. A and B are partners sharing profits equally, Balance Sheet on September 2018 was as follows:      5           2019

Balance Sheet

Liabilities

(Rs.)

Assets

(Rs.)

Sundry Creditors

Bills Payable

Reserve Fund 

Capital:

A                         20,000/-

B                         20,000/-

11,200

1,800

6,000

 

 

40,000

Sundry Assets

59,000

 

59,000

 

59,000

The firm is dissolved on the above date. Assets are realized at Rs. 49,600. Creditors allowed a discount of 2% and Dissolution Expenses came to Rs. 544. Give Journal Entries to close the books of the firm.

Q.14. Dipali and Rajshri were partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their firm on 31st December, 2019, when their Balance Sheet was as under:                    5                 2020

Balance Sheet

Liabilities

Rs.

Assets

Rs.

Capital:

Dipali                       18,400

Rajshri                     10,600

Sundry Creditors

 

 

29,000

2,000

Land

Investments

Sundry Debtors

Stock

Cash at Bank

 

16,000

4,000

2,000

3,000

6,000

 

31,000

 

31,000

Investments are sold at Rs. 3,800. Other assets realised as follows:

a)         Land Rs. 28,000, Sundry Debtors Rs. 1,800, Stock Rs. 2,800.

b)         Creditors agreed to accept 5% less. Expenses of realisation amounted to Rs. 400.

Prepare Realisation A/c, Partners’ Capital A/c and Bank A/c. 

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