T.S. Grewal Class 12 Chapter 7 Q.29 - Dissolution of a Partnership Firm

Question 29

Balance Sheet of P, Q and R as at 31st March, 2025, sharing profits in the ratio of 5 : 3 : 1, showed Bills Payable ₹40,000, Loan from Bank ₹30,000, General Reserve ₹9,000, Capitals – P ₹44,000, Q ₹36,000, R ₹20,000; Cash at Bank ₹40,000, Stock ₹19,000, Sundry Debtors ₹42,000 less Provision for Doubtful Debts ₹2,000, Building ₹40,000, Plant and Machinery ₹40,000. The partners dissolved the business. Assets realised: Stock ₹23,400; Debtors 50%; Fixed Assets 10% less than book value. Bills Payable were settled for ₹32,000. There was an outstanding bill of electricity ₹800, which was paid off. Realisation expenses ₹1,250 were also paid. Prepare the Realisation Account, Partners’ Capital Accounts and Bank Account.

Solution

REALISATION ACCOUNT

Particulars	₹	Particulars	₹
To Building A/c	40,000	By Provision for Doubtful Debts A/c	2,000
To Plant and Machinery A/c	40,000	By Bills Payable A/c	40,000
To Stock A/c	19,000	By Loan from Bank A/c	30,000
To Sundry Debtors A/c	42,000	By Bank A/c:
To Bank A/c:		Stock 23,400
Bills Payable 32,000		Debtors 21,000
Outstanding Bill 800		Building 36,000
Expenses 1,250		Plant and Machinery 36,000	1,16,400
Loan from Bank 30,000	64,050	By Loss transferred to:
		P’s Capital A/c 9,250
		Q’s Capital A/c 5,550
		R’s Capital A/c 1,850	16,650
Total	2,05,050	Total	2,05,050

PARTNERS’ CAPITAL ACCOUNTS

Particulars	P	Q	R	Particulars	P	Q	R
To Realisation A/c (Loss)	9,250	5,550	1,850	By Balance b/d	44,000	36,000	20,000
To Bank A/c	39,750	33,450	19,150	By General Reserve A/c	5,000	3,000	1,000
Total	49,000	39,000	21,000	Total	49,000	39,000	21,000

BANK ACCOUNT

Particulars	₹	Particulars	₹
To Balance b/d	40,000	By Realisation A/c	64,050
To Realisation A/c	1,16,400	By P’s Capital A/c	39,750
		By Q’s Capital A/c	33,450
		By R’s Capital A/c	19,150
Total	1,56,400	Total	1,56,400