T.S. Grewal Class 12 Chapter 7 Q.30 - Dissolution of a Partnership Firm

Question 30

Ashu and Harish are partners sharing profits and losses as 3 : 2. They decided to dissolve the firm on 31st March, 2025. Their Balance Sheet showed Capitals – Ashu ₹1,08,000, Harish ₹54,000; Creditors ₹88,000, Bank Overdraft ₹50,000; Building ₹80,000, Machinery ₹70,000, Furniture ₹14,000, Stock ₹20,000, Investments ₹60,000, Debtors ₹48,000, Cash in Hand ₹8,000. Ashu is to take over the Building at ₹95,000, and Machinery and Furniture are taken over by Harish at a value of ₹80,000. Ashu agreed to pay Creditors, and Harish agreed to meet the Bank Overdraft. Stock and Investments are taken over by both partners in their profit-sharing ratio. Debtors realised ₹46,000; expenses of realisation amounted to ₹3,000. Prepare the necessary Ledger Accounts.

Solution

REALISATION ACCOUNT

Particulars	₹	Particulars	₹
To Building A/c	80,000	By Creditors A/c	88,000
To Machinery A/c	70,000	By Bank Overdraft A/c	50,000
To Furniture A/c	14,000	By Ashu’s Capital A/c (assets taken over, see WN)	1,43,000
To Stock A/c	20,000	By Harish’s Capital A/c (assets taken over, see WN)	1,12,000
To Investments A/c	60,000	By Cash A/c (Debtors)	46,000
To Debtors A/c	48,000
To Ashu’s Capital A/c (Creditors taken over)	88,000
To Harish’s Capital A/c (Bank Overdraft taken over)	50,000
To Cash A/c (Expenses)	3,000
To Profit transferred to:
Ashu’s Capital A/c 3,600
Harish’s Capital A/c 2,400	6,000
Total	4,39,000	Total	4,39,000

PARTNERS’ CAPITAL ACCOUNTS

Particulars	Ashu	Harish	Particulars	Ashu	Harish
To Realisation A/c (Assets taken)	1,43,000	1,12,000	By Balance b/d	1,08,000	54,000
			By Realisation A/c (Liabilities taken over)	88,000	50,000
			By Realisation A/c (Profit)	3,600	2,400
To Cash A/c	56,600	–	By Cash A/c	–	5,600
Total	1,99,600	1,12,000	Total	1,99,600	1,12,000

CASH ACCOUNT

Particulars	₹	Particulars	₹
To Balance b/d	8,000	By Realisation A/c (Expenses)	3,000
To Realisation A/c (Debtors)	46,000	By Ashu’s Capital A/c	56,600
To Harish’s Capital A/c	5,600
Total	59,600	Total	59,600

Working Notes: Ashu’s Capital A/c (assets taken over) = Building 95,000 + Stock (3:2 share) 12,000 + Investments (3:2 share) 36,000 = ₹1,43,000. Harish’s Capital A/c (assets taken over) = Machinery & Furniture 80,000 + Stock (3:2 share) 8,000 + Investments (3:2 share) 24,000 = ₹1,12,000.