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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Rita and Sobha are partners in Fancy Garments Exports, sharing profits and losses equally. On 1st April, 2025, their Balance Sheet showed Sundry Creditors ₹75,000, Bills Payable ₹30,000, Rita’s Loan ₹25,000, Reserve ₹24,000, Capitals – Rita ₹90,000, Sobha ₹30,000; Cash ₹6,000, Bank ₹30,000, Stock ₹75,000, Book Debts ₹66,000 less Provision ₹6,000, Plant and Machinery ₹45,000, Land and Building ₹48,000, Loan to Sobha ₹10,000. The firm was dissolved: (a) Rita took 25% of the stock at a discount of 20% in settlement of her loan. (b) Book Debts realised ₹54,000; the balance of the stock was sold. (c) Sundry Creditors were paid at a discount of 10%; Bills Payable were paid in full. (d) Land and Building realised ₹1,20,000. (e) Rita took the goodwill of the firm at a value of ₹30,000. (f) An unrecorded asset of ₹6,900 was handed over in settlement of an unrecorded liability of ₹6,000. (g) Realisation expenses were ₹5,250. Show the Realisation Account, Partners’ Capital Accounts and Bank Account.
REALISATION ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Stock A/c | 75,000 | By Provision for Doubtful Debts A/c | 6,000 |
| To Book Debts A/c | 66,000 | By Sundry Creditors A/c | 75,000 |
| To Plant and Machinery A/c | 45,000 | By Bills Payable A/c | 30,000 |
| To Land and Building A/c | 48,000 | By Rita’s Capital A/c (Goodwill taken over) | 30,000 |
| To Bank A/c: | By Rita’s Capital A/c (Stock taken over) | 15,000 | |
| Sundry Creditors 67,500 | By Rita’s Capital A/c (Gain on Loan settlement) | 10,000 | |
| Bills Payable 30,000 | By Bank A/c: | ||
| Expenses 5,250 | 1,02,750 | Stock 56,250 | |
| To Profit transferred to: | Book Debts 54,000 | ||
| Rita’s Capital A/c 52,250 | Plant and Machinery 45,000 | ||
| Sobha’s Capital A/c 52,250 | 1,04,500 | Land and Building 1,20,000 | 2,75,250 |
| Total | 4,41,250 | Total | 4,41,250 |
PARTNERS’ CAPITAL ACCOUNTS
| Particulars | Rita | Sobha | Particulars | Rita | Sobha |
|---|---|---|---|---|---|
| To Realisation A/c (Goodwill) | 30,000 | – | By Balance b/d | 90,000 | 30,000 |
| To Bank A/c | 1,24,250 | 94,250 | By Reserve A/c | 12,000 | 12,000 |
| By Realisation A/c (Profit) | 52,250 | 52,250 | |||
| Total | 1,54,250 | 94,250 | Total | 1,54,250 | 94,250 |
RITA’S LOAN ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Realisation A/c (25% Stock taken over) | 15,000 | By Balance b/d | 25,000 |
| To Realisation A/c (Gain) | 10,000 | ||
| Total | 25,000 | Total | 25,000 |
LOAN TO SOBHA ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Balance b/d | 10,000 | By Bank A/c | 10,000 |
BANK ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Balance b/d | 30,000 | By Realisation A/c | 1,02,750 |
| To Cash A/c | 6,000 | By Rita’s Capital A/c | 1,24,250 |
| To Realisation A/c | 2,75,250 | By Sobha’s Capital A/c | 94,250 |
| To Loan to Sobha A/c | 10,000 | ||
| Total | 3,21,250 | Total | 3,21,250 |
Working Note: Stock taken over by Rita = 75,000 × 25/100 × 80/100 = ₹15,000, applied against her ₹25,000 loan; the remaining ₹10,000 of the loan is treated as forfeited by her, a gain to the firm.
Note on the source: The remaining stock is stated to have been “sold at a profit of 30% on cost,” but the realised figure used throughout the solution (₹56,250) equals its book value with no such margin added; the figures above match the source’s own internally-consistent totals, but this specific term does not appear to be reflected in them.
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.36 - 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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