T.S. Grewal Class 12 Chapter 7 Q.42 - Dissolution of a Partnership Firm

Question 42

Ramu, Laxman and Bharat started business on 1st April, 2024 with capitals of ₹1,00,000, ₹80,000 and ₹60,000 respectively, sharing profits and losses in the ratio of 4 : 3 : 3. For the year ending 31st March, 2025, the firm incurred a loss of ₹50,000. Each partner withdrew ₹10,000 during the year. On 1st April, 2025, the firm was dissolved. Creditors stood at ₹24,000, and cash in hand was ₹4,000. Assets realised ₹3,00,000, and Creditors were paid ₹23,500 in settlement of their claims. Prepare the Realisation Account, showing your workings clearly.

Solution

PARTNERS’ CAPITAL ACCOUNTS (before dissolution)

Particulars	Ramu	Laxman	Bharat
To Profit & Loss A/c (Loss)	20,000	15,000	15,000
To Drawings A/c	10,000	10,000	10,000
To Balance c/d	70,000	55,000	35,000
Total (= Balance b/d)	1,00,000	80,000	60,000

Memorandum Balance Sheet as at 1st April, 2025: Capitals (70,000 + 55,000 + 35,000 = 1,60,000) + Creditors (24,000) = ₹1,84,000, less Cash in Hand ₹4,000 = Sundry Assets ₹1,80,000 (balancing figure).

REALISATION ACCOUNT

Particulars	₹	Particulars	₹
To Sundry Assets A/c	1,80,000	By Creditors A/c	24,000
To Bank A/c (Creditors paid)	23,500	By Bank A/c (Assets realised)	3,00,000
To Profit transferred to:
Ramu’s Capital A/c 48,200
Laxman’s Capital A/c 36,150
Bharat’s Capital A/c 36,150	1,20,500
Total	3,24,000	Total	3,24,000