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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Simar, Raja and Rita were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. The firm was dissolved on 31st March, 2019. After the transfer of assets (other than cash) and external liabilities to the Realisation Account, the following transactions took place: (a) A debtor whose debt of ₹90,000 had been written off as bad paid ₹88,000 in full settlement. (b) Creditors of ₹1,21,000 accepted stock at ₹71,000 and the balance was paid to them by cheque. (c) Raja had given a loan to the firm of ₹18,000; he was paid ₹17,000 in full settlement. (d) Investments were ₹53,000, out of which investments worth ₹43,000 were taken over by Simar at ₹52,000, and the balance were sold for ₹12,000. (e) Expenses on dissolution amounted to ₹19,000 and were paid by the firm. (f) Profit on dissolution amounted to ₹30,000. Pass the necessary Journal entries. (CBSE 2020)
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| (a) | ||||
| Bank A/c Dr. | 88,000 | |||
| To Realisation A/c | 88,000 | |||
| (Bad debts previously written off now recovered) | ||||
| (b) | ||||
| Realisation A/c Dr. | 50,000 | |||
| To Bank A/c | 50,000 | |||
| (Balance of Creditors’ claim, 1,21,000 – 71,000, paid by cheque) | ||||
| (c) | ||||
| Raja’s Loan A/c Dr. | 18,000 | |||
| To Bank A/c | 17,000 | |||
| To Realisation A/c | 1,000 | |||
| (Raja’s loan of ₹18,000 settled at ₹17,000) | ||||
| (d) | ||||
| Simar’s Capital A/c Dr. | 52,000 | |||
| To Realisation A/c | 52,000 | |||
| (Investments of ₹43,000 taken over by Simar at the agreed value of ₹52,000) | ||||
| Bank A/c Dr. | 12,000 | |||
| To Realisation A/c | 12,000 | |||
| (Remaining investments sold) | ||||
| (e) | ||||
| Realisation A/c Dr. | 19,000 | |||
| To Bank A/c | 19,000 | |||
| (Realisation expenses paid) | ||||
| (f) | ||||
| Realisation A/c Dr. | 30,000 | |||
| To Simar’s Capital A/c | 12,000 | |||
| To Raja’s Capital A/c | 12,000 | |||
| To Rita’s Capital A/c | 6,000 | |||
| (Profit on dissolution distributed in the ratio 2 : 2 : 1) | ||||
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 7 Q.12 - Dissolution of a Partnership Firm", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 7 - Dissolution of a Partnership Firm.
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