T.S. Grewal Class 12 Chapter 7 Q.24 - Dissolution of a Partnership Firm

Question 24

Mala, Neela and Kala were in partnership sharing profits in the ratio of 7 : 2 : 1. Their Balance Sheet as at 31st March, 2025 showed Capitals – Mala ₹12,410, Neela ₹8,650, Kala ₹80,620; Creditors ₹11,210, Reserve for Depreciation on Plant ₹20,000; Building ₹20,000, Plant ₹31,220, Goodwill ₹10,000, Software ₹12,400, Stock ₹11,240, Debtors ₹8,740, Bank ₹1,210, Patents ₹38,080. It was agreed to dissolve the partnership on 31st March, 2025: (a) Mala to take over the Building at an agreed value of ₹31,500. (b) Neela, 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; she was also to pay off the Creditors. Show the Ledger Accounts recording the dissolution in the books of the firm.

Solution

REALISATION ACCOUNT

Particulars	₹	Particulars	₹
To Building A/c	20,000	By Creditors A/c	11,210
To Plant A/c	31,220	By Reserve for Depreciation on Plant A/c	20,000
To Goodwill A/c	10,000	By Mala’s Capital A/c (Building taken over)	31,500
To Software A/c	12,400	By Neela’s Capital A/c (Goodwill, Stock, Debtors, Patents, Plant taken over)	64,980
To Stock A/c	11,240	By Loss transferred to:
To Debtors A/c	8,740	Mala’s Capital A/c 10,640
To Patents A/c	38,080	Neela’s Capital A/c 3,040
To Neela’s Capital A/c (Creditors taken over)	11,210	Kala’s Capital A/c 1,520	15,200
Total	1,42,890	Total	1,42,890

PARTNERS’ CAPITAL ACCOUNTS

Particulars	Mala	Neela	Kala	Particulars	Mala	Neela	Kala
To Realisation A/c (Assets taken over)	31,500	64,980	–	By Balance b/d	12,410	8,650	80,620
To Realisation A/c (Loss)	10,640	3,040	1,520	By Realisation A/c (Creditors taken over)	–	11,210	–
				By Bank A/c	29,730	48,160	–
To Bank A/c			79,100
Total	42,140	68,020	80,620	Total	42,140	68,020	80,620

BANK ACCOUNT

Particulars	₹	Particulars	₹
To Balance b/d	1,210	By Kala’s Capital A/c	79,100
To Mala’s Capital A/c	29,730
To Neela’s Capital A/c	48,160
Total	79,100	Total	79,100

Note: Software (₹12,400) was not taken over by any partner and realised nothing; its full value is absorbed into the overall Realisation Loss of ₹15,200, shared 7 : 2 : 1.