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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Prashant and Rajesh are partners sharing profits and losses in the ratio of 2 : 1. On 31st March, 2025, their Balance Sheet showed Bank Overdraft ₹30,000, General Reserve ₹56,000, Investments Fluctuation Reserve ₹20,000, Prashant’s Loan ₹34,000, Prashant’s Capital ₹50,000; Cash in Hand ₹6,000, Bank Balance ₹10,000, Sundry Debtors ₹26,000 less Provision ₹2,000, Investments ₹40,000, Stock ₹10,000, Furniture ₹10,000, Building ₹60,000, Rajesh’s Capital (Dr., i.e. he owed the firm) ₹30,000. The partners decided to dissolve the firm. Prashant took over Investments at an agreed valuation of ₹35,000. Other assets were realised: Sundry Debtors in full; Stock at 15% less and Furniture at 20% less than book value; Building at ₹1,00,000. Compensation to employees, not provided for, of ₹10,000 was paid by the firm. Prepare the Realisation Account, Partners’ Capital Accounts and Bank Account.
REALISATION ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Sundry Debtors A/c | 26,000 | By Provision for Doubtful Debts A/c | 2,000 |
| To Investments A/c | 40,000 | By Bank Overdraft A/c | 30,000 |
| To Stock A/c | 10,000 | By Investments Fluctuation Reserve A/c | 20,000 |
| To Furniture A/c | 10,000 | By Prashant’s Capital A/c (Investments taken over) | 35,000 |
| To Building A/c | 60,000 | By Bank A/c: | |
| To Bank A/c: | Sundry Debtors 26,000 | ||
| Compensation to Employees 10,000 | Stock 8,500 | ||
| Bank Overdraft 30,000 | 40,000 | Furniture 8,000 | |
| To Profit transferred to: | Building 1,00,000 | 1,42,500 | |
| Prashant’s Capital A/c 29,000 | |||
| Rajesh’s Capital A/c 14,500 | 43,500 | ||
| Total | 2,29,500 | Total | 2,29,500 |
PARTNERS’ CAPITAL ACCOUNTS
| Particulars | Prashant | Rajesh | Particulars | Prashant | Rajesh |
|---|---|---|---|---|---|
| To Realisation A/c (Investments) | 35,000 | – | By Balance b/d | 50,000 | – |
| To Balance b/d | – | 30,000 | By General Reserve A/c | 37,333 | 18,667 |
| To Bank A/c | 81,333 | 3,167 | By Realisation A/c (Profit) | 29,000 | 14,500 |
| Total | 1,16,333 | 33,167 | Total | 1,16,333 | 33,167 |
PRASHANT’S LOAN ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Bank A/c | 34,000 | By Balance b/d | 34,000 |
BANK ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Balance b/d | 10,000 | By Realisation A/c | 40,000 |
| To Cash A/c | 6,000 | By Prashant’s Capital A/c | 81,333 |
| To Realisation A/c | 1,42,500 | By Rajesh’s Capital A/c | 3,167 |
| By Prashant’s Loan A/c | 34,000 | ||
| Total | 1,58,500 | Total | 1,58,500 |
Note: Rajesh’s Capital of ₹30,000 was a debit balance (he owed the firm), which is why it appears in the Balance Sheet total alongside the assets rather than as a normal credit-balance liability.
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.33 - 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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