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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Rohit, Kunal and Sarthak (equal partners) decided to dissolve their firm. Pass the necessary Journal entries for the following after various assets (other than Cash and Bank) and third-party liabilities have been transferred to the Realisation Account: (a) Kunal agreed to pay off his wife’s loan of ₹6,000. (b) Total Creditors of the firm were ₹40,000. Creditors worth ₹10,000 were given a piece of furniture costing ₹8,000 in full and final settlement. Remaining Creditors were allowed a discount of 10%. (c) Rohit had given a loan of ₹70,000 to the firm, which was duly paid. (d) A machine not recorded in the books was taken over by Kunal at ₹3,000, whereas its expected value was ₹5,000. (e) The firm had a debit balance of ₹15,000 in the Profit and Loss Account on the date of dissolution. (f) Sarthak paid realisation expenses of ₹16,000 out of his private funds; he was to receive a remuneration of ₹15,000 for completing the dissolution process and was responsible for bearing all realisation expenses.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| (a) | ||||
| Realisation A/c Dr. | 6,000 | |||
| To Kunal’s Capital A/c | 6,000 | |||
| (Kunal agreed to pay off his wife’s loan, a firm liability, on its behalf) | ||||
| (b) | ||||
| Realisation A/c Dr. | 27,000 | |||
| To Cash A/c | 27,000 | |||
| (Remaining Creditors of ₹30,000 paid off at a 10% discount) | ||||
| (c) | ||||
| Rohit’s Loan A/c Dr. | 70,000 | |||
| To Cash A/c | 70,000 | |||
| (Rohit’s loan to the firm repaid) | ||||
| (d) | ||||
| Kunal’s Capital A/c Dr. | 3,000 | |||
| To Realisation A/c | 3,000 | |||
| (Unrecorded machine taken over by Kunal at the agreed value of ₹3,000) | ||||
| (e) | ||||
| Rohit’s Capital A/c Dr. | 5,000 | |||
| Kunal’s Capital A/c Dr. | 5,000 | |||
| Sarthak’s Capital A/c Dr. | 5,000 | |||
| To Profit and Loss A/c | 15,000 | |||
| (Debit balance of Profit and Loss A/c written off equally) | ||||
| (f) | ||||
| Realisation A/c Dr. | 15,000 | |||
| To Sarthak’s Capital A/c | 15,000 | |||
| (Fixed remuneration paid to Sarthak for completing the dissolution process; the ₹16,000 he paid personally is his own cost, per the agreement, and does not enter the firm’s books) | ||||
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.15 - 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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