Balbharati solutions for Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board chapter 6 - Dissolution of Partnership Firm [Latest edition]

In case of dissolution assets and liabilities are transferred to ______ A/c.

Dissolution expenses are credited to ______.

Deficiency of Insolvent partner will be suffered by solvent partners in their ___________ ratio.

If an asset is taken over by partner from firm his capital account will be ___________.

If any unrecorded liability is paid on dissolution of the firm ___________ is debited.

Partnership is completely dissolved when the partners of the firm become _________.

If the number of partners in a firm falls below two, the firm stands_________.

Realisation account is __________ on realisation of assets.

All activities of partnership firm cease on _________ of firm.

Give the word/term/phrase which can substitute the following statement.

Debit balance of Realisation account.

Give the word/term/phrase which can substitute the following statement.

Winding up of partnership business.

Give the word/term/phrase which can substitute the following statement.

An account opened to find out the Profit or Loss on realisation of Assets and settlement of Liabilities.

Write the word / term / phrase, which can substitute the following statement.
Debit balance of an insolvent Partner’s Capital Account.

Give the word/term/phrase which can substitute the following statement.

Credit balance of realisation Account.

Write the word / term / phrase, which can substitute the following statement.
Conversion of assets into cash on dissolution of firm.

Write the word / term / phrase, which can substitute the following statement.
Liability likely to arise in future on happening of certain events.

Give the word/term/phrase which can substitute the following statement.

Assets which are not recorded in the books of account.

Give the word/term/phrase which can substitute the following statement.

The account which shows realisation of assets and discharge of liabilities.

Write the word/phrase/term/ which can substitute the following statement.

Expenses incurred on dissolution of firm.

State whether the following statement is True or False with reason.

The firm must be dissolved on the retirement of a partner.

State whether the following statement is True or False.

On dissolution Cash or Bank Account is closed automatically.

State whether the following statement is True or False.

On dissolution Bank Overdraft is transferred to Realisation Account.

State whether the following statement is True or False with reason.

A solvent partner having debit balance to his Capital Account does not share the deficiency of insolvent partner Capital Account.

State whether the following statement is True or False with reason.

At the time of the dissolution of partnership, all assets should be transferred to Realisation Account.

State whether the following statement is True or False with reason.

The debit balance of insolvent partner’s Capital Account is known as a capital deficiency.

State whether the following statement is True or False with reason.

At the time of dissolution, a loan from the partner will be transferred to Realisation Account.

State whether the following statement is True or False with reason.

Dissolution takes place when the relation among the partners comes to an end.

State whether the following statement is True or False with reason.

The insolvency loss at the time of dissolution of the firm is shared by the solvent partners in their profit sharing ratio.

State whether the following statement is True or False with reason.

Realisation Loss is not transferred to the insolvent partner’s capital account.

Vinod, Vijay, and Vishal are partners in a firm, sharing profit & Losses in the ratio 3:2:1. Vishal becomes insolvent and his capital deficiency is ₹ 6,000. Distribute the capital deficiency among the solvent partners.

Creditors ₹ 30,000, Bills Payable ₹ 20,000 and Bank Loan ₹ 10,000. Available Bank Balance ₹ 40,000 what will be the amount that creditors will get in case of all partner's insolvency.

Insolvent Partner Capital A/c debit side total is ₹ 10,000 and the credit side total is  ₹ 6,000. Calculate deficiency.

Insolvent partners capital A/c Debit side is ₹ 15,000 & insolvent partner brought cash ₹ 6,000. Calculate the amount of Insolvency Loss to be distributed among the solvent partners.

Realisation profit of a firm is ₹ 6,000, partners share Profit & Loss in the ratio of 3: 2: 1. Calculate the amount of Realisation Profit to be credited to Partners Capital A/c.

Answer in one sentence only.

What is dissolution of partnership firm?

Answer in one sentence only.

When is Realisation Account opened?

Answer in one sentence only.

Which accounts are not transferred to Realisation account?

Answer in one sentence only.

Who is called Insolvent person?

Answer in one sentence only.

What is a capital deficiency?

Answer in one sentence only.

In what proportion is the balance on Realisation Account transferred to Partners’ Capital / Current Accounts?

Answer in one sentence only.

Who should bear the capital deficiency of an insolvent partner?

Answer in one sentence only.

Which account is debited on repayment of Partner’s Loan?

Answer in one sentence only.

Which account is debited on payment of dissolution expenses?

Complete the table.

Ganesh and Kartik are partners sharing Profits and Losses equally. They decided to dissolve the firm on 31^st March 2018. Their Balance Sheets was as under :

Assets were realised as under :

Building ₹82,000, Debtors ₹ 22,000, Stock ₹ 20,000. Bills Receivable ₹ 3,200 and Ganesh agreed to take over Furniture for ₹10,000. Realisation Expenses amounted to ₹ 2,000.

Show Realisation A/c, Partners’ Capital A/c and Cash A/c.

Leela, Manda, and Kunda are partners in the firm ‘Janki Stores’ sharing Profits and Losses in the ratio of 3:2:1 respectively. On 31st March 2018, they decided to dissolve the firm when their Balance Sheet was as under.

Leela agreed to take over the Building at ₹ 1,23,600. Manda took over Goodwill, Stock, and Debtors at Book values and agreed to pay Creditors and Bills payable. Motor Car and Machinery realised ₹ 1,51,080 and ₹ 31,680 respectively. Investments were taken by Kunda at an agreed value of ₹ 55,440. Realisation expenses amounted to ₹ 6,800.

Pass necessary entries in the books of ‘Janki Stores.’

Shailesh and Shashank were partners sharing Profits and Losses in the ratio of 3:2. Their Balance Sheet as on 31^st March 2019 was as follows.

The firm was dissolved on the above date and the assets realised as under.

1. Plant ₹ 8,000, Building ₹ 6,000, Stock ₹ 4,000 and Debtors ₹ 12,000.

2. Shailesh agreed to pay of the Bills Payable.

3. Creditors were paid in full.

4. Dissolution expenses were ₹ 1,400

Prepare Realisation A/c, Partners Current A/c, Partners Capital A/c, and Bank A/c

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 31^st March 2019.

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.

Seeta and Geeta are partners in the firm sharing Profits and Losses in the ratio of 4:1. They decided to dissolve the partnership on 31^st March 2020 on which date their Balance Sheet stood as follows.

Additional Information :

1. Plant and Stock taken over by Seeta ₹ 78,000, and ₹ 22,000 respectively

2. Debtors Realised 90% of the Book Value and Trademark at ₹ 5,000. and Goodwill was realised for ₹ 7,000.

3. Unrecorded assets estimated ₹4,500 was sold for ₹1,500.

4. ₹ 1,000 Discount were allowed by creditors while paying their claim.

5. The Realisation Expenses amounted to ₹ 3,500

You are required to prepare Realisation A/c, Cash A/c, and Partners Capital A/c

Sangeeta, Anita, and Smita were in partnership sharing Profits and Losses in the ratio 2: 2: 1. Their Balance Sheet as on 31^st March 2019 was as under:

They decided to dissolve the firm as follows:

1. Assets realised as; Land recovered ₹ 1,80,000; Goodwill for ₹ 75,000; Loans and Advances realised ₹ 12,000; 10% of the Debts proved bad;

2. Sangeeta took Plant at book value.

3. Creditors and Bills payable paid at 5% discount.

4. Sangeeta’s Loan was discharged along with ₹ 6,000 as Interest.

5. There was a contingent liability in respect of bills of ₹ 1,00,000 which was under discount. Out of them, a holder of one bill of ₹ 20,000 became insolvent

Show Realisation Account, Partners Capital Account, and Bank Account.

Saiesh, Sumit, and Hemant were in partnership sharing Profits and Losses in the ratio 2:2:1. They decided to dissolve their partnership firm on 31st March 2019 and their Balance Sheet on that date stood as;

It was agreed that;

1. Saiesh to discharge Loan and to take Debtors at book value.
2. Plant realised ₹ 1,35,000.
3. Stock realised ₹ 72,000.
4. Creditors were paid off at a discount of ₹ 45.

Show Realisation A/c, Partners’ Capital A/c and Bank A/c

Sitaram, Gangaram, and Rajaram are partners sharing Profits and Losses in the ratio of 4:2:3. On. 1^st April 2019 they agreed to dissolve the partnership, their Balance Sheet was as follows :

The assets realised: Building ₹ 46,750 Machinery ₹ 18,550 Furniture ₹ 9,600; Investment ₹ 10,650 Bill Receivable and Debtors ₹ 20,750; All the liabilities were paid off. The cost of realisation was ₹ 800. Rajaram becomes bankrupt and ₹ 1,100 only was recovered from his estate.

Show Realisation Account, Bank Account, and Capital Account of the partners.

Following is the Balance Sheet of Vaibhav, Sanjay, and Santosh.

Santosh is declared insolvent so firm is dissolved and assets realised as follows:

1. Stock and Debtors ₹ 54,000, Goodwill - NIL, Machinery at Book value.

2. Creditors allowed discount at 10%.

3. Santosh could pay only 25 paise in rupee of the balance due.

4. Profit-sharing ratio was 8:4:3.

5. A contingent liability against the firm ₹ 9,000 is cleared.

Give Ledger Account to close the books of the firm.

Shweta, Nupur, and Sanika are partners sharing Profits and Losses in the ratio of 3:2:1. Their Balance Sheet as on 31^st March 2019 was as follows :

The firm is dissolved as on 31^st March 2019. Sundry Assets realised @ 60% of its book value. Realisation expenses ₹ 2000 paid by Shweta, Nupur, and Sanika both are insolvent. Nupur’s private estate has got a surplus of ₹3,000 and that of Sanika ₹ 8,000.

Show necessary ledger accounts to close the books of the firm.

Following is the Balance Sheet as on 31st March 2019 of a firm having three equal partners Priti, Priya, and Prachi.

The firm was dissolved due to insolvency of all the partners. Machinery was sold for ₹ 18,000, while Furniture fetched ₹ 14,000, Stock realised ₹ 35,000. Realisation expenses amounted to ₹ 2,000. Nothing could be recovered from Priya and Prachi, but ₹ 3,400 could be collected from Priti’s private estate.

Close the books of accounts of the firm.

Shashwat and Shiv are equal partners. Their Balance Sheet stood as under :

Due to weak financial position, all partners were declared bankrupt

The Assets were realised as follows :

Stock ₹3,500, Furniture ₹ 2,000, Debtors ₹ 5,000 and Machinery ₹ 7,000 The cost of collection and distributing the estate amounted to ₹ 1,500. Shashwat’s private estate in not sufficient even to pay his private debts, whereas in Shiv’s private estate there is a surplus of ₹ 500.

Prepare necessary ledger accounts to close the books of the firm.