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प्रश्न
All partners wish to dissolve the firm. Yastin, a partner wants that her loan of Rs 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.
उत्तर
As per section 48 of Partnership Act 1932, at the time of dissolution, loans and advances from the partners must be paid off before the settlement of their capital accounts. Hence, Yastin’s argument is correct that her loan of Rs 2,00,000 must be paid off before the payment of partners' capital.
APPEARS IN
संबंधित प्रश्न
Hitesh sold goods for Rs 4,500 to Ashok on 1.1.2010 and drew upon him a bill of exchange payable 2 months after sight. Ashok accepted the bill and returned the same to Hitesh. On the due date the bill was met by Ashok.
Record the necessary Journal entries in the books of Hitesh and also prepare Ashok account in his books.
1. When the bill was retained by Hitesh till the date of its maturity.
2. When Hitesh immediately discounted the bill @ 15% p.a. with his bank.
3. When three days before its maturity, the bill was sent by Hitesh to his bank for collection.
4. When the bill was endorsed immediately by Hitesh in favour of his creditor Venkat.
Journalise the following bill transactions in the books of Gopal as on 14th August, 2010.
1. Shruti’s acceptance to Gopal Rs 4,500 retired one month before due date at rebate 10% p.a.
2. Discounted 3 months acceptance of Chandrakant for Rs 3,500 with bank @ 12% p.a.
3. Received cheque Rs 2,000 and 2 months acceptance drawn on Sushama for Rs 10,000 for the balance due on her account.
4. Endorsed Shantaram’s acceptance at 2 months of Rs 5,000 in favour of Balchandra and paid cash Rs 2,500 in full settlement of this account Rs 7,800.
5. Sold goods of Rs 13,500 on credit to Nanda. Drew 2 months bill on her. Which is duly accepted and returned by her.
Journalise the following transactions regarding Realisation expenses:
[a] Realisation expenses amounted to Rs 2,500.
[b] Realisation expenses amounting to Rs 3,000 were paid by Ashok, one of the partners.
[c] Realisation expenses Rs 2,300 borne by Tarun, personally.
[d] Amit, a partner was appointed to realise the assets, at a cost of Rs 4,000. The actual amount of Realisation amounted to Rs 3,000.
Record necessary journal entries in the following cases:
[a] Creditors worth Rs 85,000 accepted Rs 40,000 as cash and Investment worth Rs 43,000, in full settlement of their claim.
[b] Creditors were Rs 16,000. They accepted Machinery valued at Rs 18,000 in settlement of their claim.
[c] Creditors were Rs 90,000. They accepted Buildings valued Rs 1,20,000 and paid cash to the firm Rs 30,000.
Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs 3,000,
2. Ashish, an old customer whose Account for Rs 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of Rs 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize Rs 400. It was taken away by Priya at an estimated price less 25%,
5. There were 100 shares of Rs 10 each in Star Limited acquired at a cost of Rs 2,000 which had been written-off completely from the books. These shares are valued @ Rs 6 each and divided among the partners in their profit sharing ratio.
Shilpa, Meena and Nanda decided to dissolve their partnership on March 31,2017. Their profit sharing ratio was 3:2:1 and their Balance Sheet was as under:
Balance Sheet of Shilpa, Meena and Nanda as on March 31, 2017
| Liabilities |
Amount |
Assets | Amount (Rs.) |
| Capitals: | Land | 81,000 | |
| Shilpa | 80,000 |
Stock |
56,760 |
| Meena | 40,000 | Debtors | 18,600 |
| Bank loan | 20,000 | Nanda’s Capital Account | 23,000 |
| Creditors | 37,000 |
Cash |
10,840 |
| Provision for doubtful debt | 1,200 | ||
| General Reserve | 12,000 | ||
| 190,200 | 190,200 |
The stock of value of Rs 41,660 are taken over by Shilpa for Rs 35,000 and she agreed to discharge bank loan. The remaining stock was sold at Rs 14,000 and debtors amounting to Rs 10,000 realised Rs 8,000. land is sold for Rs 1,10,000. The remaining debtors realised 50% at their book value. Cost of Realisation amounted to Rs 1,200. There was a typewriter not recorded in the books worth Rs 6,000 which were taken over by one of the Creditors at this value. Prepare Realisation Account.
Record necessary Journal entries in the following cases:
(a) Creditors worth ₹ 85,000 accepted ₹ 40,000 as cash and Investment worth ₹ 43,000, in full settlement of their claim.
(b) Creditors were ₹ 16,000. They accepted Machinery valued at ₹ 18,000 in settlement of their claim.
(c) Creditors were ₹ 90,000. They accepted Building valued at ₹ 1,20,000 and paid cash to the firm ₹ 30,000.
- Pass Journal entries for the following at the time of dissolution of a firm:
Sale of Assets − ₹ 50,000. - Payment of Liabilities − ₹ 10,000.
- A commission of 5% allowed to Mr. X, a partner, on sale of assets.
- Realisation expenses amounted to ₹ 15,000. The firm had agreed with Amrit, a partner, to reimburse him up to ₹ 10,000.
- Z, an old customer, whose account for ₹ 6,000 was written off as bad in the previous year, paid 60% of the amount written off.
- Investment (Book Value ₹ 10,000) realised at 150%.
Pass Journal entries for the following transactions at the time of dissolution of the firm:
(a) Loan of ₹ 10,000 advanced by a partner to the firm was refunded.
(b) X, a partner, takes over an unrecorded asset (Typewriter) at ₹ 300.
(c) Undistributed balance (Debit) of Profit and Loss Account ₹ 30,000. The firm has three partners X,Y and Z.
(d) Assets of the firm realised ₹ 1,25,000.
(e) Y who undertakes to carry out the dissolution proceedings is paid ₹ 2,000 for the same.
(f) Creditors are paid ₹ 28,000 in full settlement of their account of ₹ 30,000.
Pass necessary Journal entries on the dissolution of a firm in the following cases:
(a) Dharam, a partner, was appointed to look after the process of dissolution at a remuneration of ₹ 12,000 and he had to bear the dissolution expenses. Dissolution expenses ₹ 11,000 were paid by Dharam.
(b) Jay, a partner, was appointed to look after the process of dissolution and was allowed a remuneration of ₹ 15,000. Jay agreed to bear dissolution expenses. Actual dissolution expenses ₹ 16,000 were paid by Vijay, another partner on behalf of Jay.
(c) Deepa, a partner, was to look after the process of dissolution and for this work she was allowed a remuneration of ₹ 7,000. Deepa agreed to bear dissolution expenses. Actual dissolution expenses ₹ 6,000 were paid from the firm's bank account.
(d) Dev, a partner, agreed to do the work of dissolution for ₹ 7,500. He took away stock of the same amount as his commission. The stock had already been transferred to Realisation Account.
(e) Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of ₹ 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were ₹ 12,000. These expenses were paid by Jeev by drawing cash from the firm.
(f) A debtor of ₹ 8,000 already transferred to Realisation Account agreed to pay the realisation expenses of ₹ 7,800 in full settlement of his account.
Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3 : 2. They decided to dissolve their partnership firm on 31st March, 2018. Pradeep was deputed to realise the assets and to pay off the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm on 31st March, 2018 was as follows:
BALANCE SHEET as at 31st March, 2018
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
80,000 |
Building | 1,20,000 | ||
| Mrs. Pradeep's Loan | 40,000 | Investment | 30,600 | ||
| Rajesh's Loan |
24,000 |
Debtors |
34,000 |
|
|
| Investment Fluctuation Fund |
8,000 |
Less: Provision for Doubtful Debts |
4,000 |
30,000 |
|
| Capital A/cs: | Bills Receivable | 37,400 | |||
| Pradeep |
42,000 |
|
Bank | 6,000 | |
| Rajesh |
42,000 |
84,000 |
Profit and Loss A/c | 8,000 | |
|
|
|
Goodwill |
4,000 |
||
|
2,36,000 |
2,36,000 |
||||
Following terms and conditions were agreed upon:
(a) Pradeep agreed to pay off his wife's loan.
(b) Half of the debtors realised ₹ 12,000 and remaining debtors were used to pay off 25% of the creditors.
(c) Investment sold to Rajesh for ₹ 27,000.
(d) Building realised ₹ 1,52,000.
(e) Remaining creditors were to be paid after two months, they were paid immediately at 10% p.a. discount.
(f) Bill receivables were settled at a loss of ₹ 1,400.
(g) Realisation expenses amounted to ₹ 2,500.
Prepare Realisation Account.
Balance Sheet of a firm as at 31st March, 2019, when it was decided to dissolve the same, was:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|||||
| Sundry Creditors | 14,000 | Cash at Bank | 640 | |||||
| General Reserve | 500 | Stock | 4,740 | |||||
| Capital A/cs: | Debtors | 5,540 | ||||||
| X | 4,000 | Machinery | 10,580 | |||||
| Y | 3,000 | 7,000 | ||||||
| 21,500 | 21,500 | |||||||
₹19,500 were realised from all assets except Cash at Bank. The cost of winding up came to ₹ 440. X and Y shared profits in the ratio of 2 : 1 respectively.
Prepare Realisation Account and Capital Accounts of Partners.
Achal and Vichal were partners in a firm sharing profits in the ratio of 3 : 5. On 31st March, 2019, their Balance Sheet was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) | |||||
| Capital A/cs: | Land and Building | 4,00,000 | ||||||
| Achal | 3,00,000 | Machinery | 3,00,000 | |||||
| Vichal | 5,00,000 | 8,00,000 | Debtors | 2,22,000 | ||||
| Creditors | 1,79,000 | Cash at Bank | 78,000 | |||||
| Employees' Provident Fund | 21,000 | |||||||
| 10,00,000 | 10,00,000 | |||||||
The firm was dissolved on 1st April, 2019 and the Assets and Liabilities were settled as follows:
(a) Land and Building realised ₹ 4,30,000.
(b) Debtors realised ₹ 2,25,000 (with interest) and ₹ 1,000 were recovered for Bad Debts written off last year.
(c) There was an Unrecorded Investment which was sold for ₹ 25,000.
(d) Vichal took over Machinery at ₹ 2,80,000 for cash.
(e) 50% of the Creditors were paid ₹ 4,000 less in full settlement and the remaining Creditors were paid full amount.
Pass necessary Journal entries for dissolution of the firm.
Bale and Yale are equal partners of a firm. They decide to dissolve their partnership on 31st March, 2019 at which date their Balance Sheet stood as:
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/cs: | Building | 45,000 | ||
| Bale | 50,000 | Machinery | 15,000 | |
| Yale | 40,000 | 90,000 | Furniture | 12,000 |
| General Reserve | 8,000 | Debtors | 8,000 | |
| Bale's Loan A/c | 3,000 | Stock | 24,000 | |
| Creditors | 14,000 | Bank | 11,000 | |
| 1,15,000 | 1,15,000 | |||
(a) The assets realised were:
Stock ₹ 22,000; Debtors ₹ 7,500; Machinery ₹ 16,000; Building ₹ 35,000.
(b) Yale took over the Furniture at ₹ 9,000.
(c) Bale agreed to accept ₹ 2,500 in full settlement of his Loan Account.
(d) Dissolution Expenses amounted to ₹ 2,500.
Prepare the:
(i) Realisation Account; (ii) Capital Accounts of Partners;
(iii) Bale's Loan Account; (iv) Bank Account.
Vinod, Vijay and Venkat are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve their firm on 31st March, 2019, the date on which their Balance Sheet stood as:
|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
17,000 |
Bank | 3,500 | ||
| Bills Payable | 12,000 | Stock | 19,800 | ||
| Vinod's Loan |
5,300 |
Debtors |
15,000 |
|
|
| General Reserve |
6,000 |
Less: Provision for Doubtful Debts |
1,000 |
14,000 |
|
| Capital A/cs: | Investments | 4,000 | |||
| Vinod | 25,000 | Furniture | 10,000 | ||
| Vijay |
11,000 |
|
Machinery | 33,000 | |
| Venkat |
8,000 |
44,000 |
|||
|
84,300 |
84,300 |
||||
The following additional information is given:
(a) The Investments are taken by Vinod for ₹ 5,000 in settlement of his loan
(b)
| Assets realised as follows: | ₹ |
| Stock | 17,500 |
| Debtors | 14,500 |
| Furniture | 6,800 |
| Machinery | 30,300 |
(c) Expenses on realisation amounted to ₹ 2,000.
Close the books of the firm giving relevant Ledger Accounts.
Yogesh and Naresh were partners sharing profits equally. They dissolved the firm on 1st April, 2019. Naresh was assigned the responsibility to realise the assets and pay the liabilities at a remuneration of ₹10,000 including expenses. Balance Sheet of the firm as on that date was as follows:
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 40,000 | Cash/Bank | 6,000 | ||
| Bills Payable | 40,000 | Investments | 30,000 | ||
| Naresh's Loan | 44,000 | Debtors | 40,000 | 36,000 | |
| Mrs. Yogesh's Loan | 42,000 | Less: Provision for Doubtful Debts | 4,000 | ||
| Investment Fluctuation Reserve | 8,000 | Bills Receivable | 33,400 | ||
| Capital A/cs: | 42,000 | Profit and Loss A/c | 1,10,600 | ||
| Yogesh | 21,000 | ||||
| Naresh | 21,000 | ||||
| 2,16,000 | 2,16,000 |
The firm was dissolved on following terms:
- Yogesh was to pay his wife's loan.
- Debtors realised ₹ 30,000.
- Naresh was to take investments at an agreed value of ₹ 26,000.
- Creditors and Bills Payable were payable after two months but were paid immediately at a discount of 15% p.a.
- Bills Receivable were received allowing 5% rebate.
- A Debtor previously written off as Bad Debt paid ₹ 15,000.
- An unrecorded asset realised ₹10,000.
Prepare Realisation Account, Partners' Capital Accounts, Partners' Loan Account and Cash/Bank Account.
Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 31st March, 2019, their Balance Sheet was:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Creditors | 50,000 | Cash | 60,000 | |
| Bank Loan | 35,000 | Debtors | 75,000 | |
| Employees' Provident Fund | 15,000 | Stock | 40,000 | |
| Investments Fluctuation Reserve | 10,000 | Investments | 20,000 | |
| Commission Received in Advance | 8,000 | Plant | 50,000 | |
| Capital A/cs: | Profit and Loss A/c | 3,000 | ||
| Anju | 50,000 | |||
| Manju | 50,000 | |||
|
Sanju |
30,000 | 1,30,000 | ||
| 2,48,000 | 2,48,000 | |||
On this date, the firm was dissolved. Anju was appointed to realise the assets. Anju was to receive 5% commission on the sale of assets (except cash) and was to bear all expenses of realisation.
Anju realised the assets as follows: Debtors ₹ 60,000; Stock ₹ 35,500; Investments ₹ 16,000; Plant 90% of the book value. Expenses of Realisation amounted to ₹ 7,500. Commission received in advance was returned to customers after deducting ₹ 3,000.
Firm had to pay ₹ 8,500 for Outstanding Salary, not provided for earlier, Compensation paid to employees amounted to ₹ 17,000. This liability was not provided for in the above Balance Sheet. ₹ 20,000 had to be paid for Employees' Provident Fund.
Prepare Realisation Account, Capital Accounts of Partners and Cash Account.
A, B and C were in partnership sharing profits in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm as at 31st March, 2019 was:
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Building | 20,000 | ||
| A | 12,410 | Plant | 31,220 | |
| B | 8,650 | Goodwill | 10,000 | |
| C | 80,620 | 1,01,680 | 100 Shares in X Ltd. (At cost) | 2,400 |
| Creditors | 11,210 | 1,000 Shares in Y Ltd. (At cost) | 10,000 | |
| Reserve for Depreciation on Plant | 20,000 | Stock | 11,240 | |
| Debtors | 8,740 | |||
| Bank | 1,210 | |||
| Patents | 38,080 | |||
| 1,32,890 | 1,32,890 | |||
It was agreed to dissolve the partnership as on 31st March, 2019 and the terms of dissolution were−
(a) A to take over the Building at an agreed amount of ₹ 31,500.
(b) B, who was to carry on the business, to take over the Goodwill, Stock and Debtors at book value, the Patents at ₹ 30,000 and Plant at ₹ 5,000. He was also to pay the Creditors.
(c) C to take over shares in X Ltd. at ₹ 15 each.
(d) The shares in Y Ltd. to be divided in the profit-sharing ratio.
Show Ledger Accounts recording the dissolution in the books of the firm.
Srijan, Raman and Manan were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. On 31st, March, 2017 their Balance Sheet was as follows:
BALANCE SHEET OF SRIJAN, RAMAN AND MANAN as on 31st March, 2017
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capitals: | Capital: Manan | 10,000 | ||
| Srijan | 2,00,000 | Plant | 2,20,000 | |
| Raman | 1,50,000 | 3,50,000 | Investments | 70,000 |
| Creditors | 75,000 | Stock | 50,000 | |
| Bills Payable | 40,000 | Debtors | 60,000 | |
| Outstanding Salary | 35,000 | Bank | 10,000 | |
| Profit and Loss Account | 80,000 | |||
| 5,00,000 | 5,00,000 | |||
On the above date they decided to dissolve the firm.
(a) Srijan was appointed to realise the assets and discharge the liabilities. Srijan was to receive 5% commission on sale of assets (except cash) and was to bear all expenses of realisation.
(b)
| Assets were realised as follows: | ₹ |
| Plant | 85,000 |
| Stock | 33,000 |
| Debtors | 47,000 |
(c) Investments were realised at 95% of the book value.
(d) The firm had to pay ₹ 7,500 for an outstanding repair bill not provided for earlier.
(e) A contingent liabillity in respect of bills receivable, discounted with the bank had also materialised and had to be discharged for ₹ 15,000.
(f) Expenses of realisation amounting to ₹ 3,000 were paid by Srijan.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
