T.S. Grewal Class 12 Chapter 7 Q.40 - Dissolution of a Partnership Firm

Question 40

A, B and C were partners sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2025, A’s Capital and B’s Capital were ₹30,000 and ₹20,000 respectively, but C owed ₹5,000 to the firm. The liabilities were ₹20,000. The assets of the firm realised ₹50,000. Prepare the Realisation Account, Partners’ Capital Accounts and Cash Account.

Solution

Memorandum Balance Sheet: Capitals (A 30,000 + B 20,000) + Other liabilities (20,000) = ₹70,000, less C’s (debit) Capital ₹5,000 = Sundry Assets ₹65,000 (balancing figure).

REALISATION ACCOUNT

Particulars	₹	Particulars	₹
To Sundry Assets A/c	65,000	By Creditors A/c	20,000
To Cash A/c (Creditors paid)	20,000	By Cash A/c (Assets realised)	50,000
		By Loss transferred to:
		A’s Capital A/c 7,500
		B’s Capital A/c 4,500
		C’s Capital A/c 3,000	15,000
Total	85,000	Total	85,000

PARTNERS’ CAPITAL ACCOUNTS

Particulars	A	B	C	Particulars	A	B	C
To Balance b/d	–	–	5,000	By Balance b/d	30,000	20,000	–
To Realisation A/c (Loss)	7,500	4,500	3,000	By Cash A/c	–	–	8,000
To Cash A/c	22,500	15,500	–
Total	30,000	20,000	8,000	Total	30,000	20,000	8,000

CASH ACCOUNT

Particulars	₹	Particulars	₹
To Realisation A/c (Assets)	50,000	By Realisation A/c (Creditors)	20,000
To C’s Capital A/c	8,000	By A’s Capital A/c	22,500
		By B’s Capital A/c	15,500
Total	58,000	Total	58,000