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Charu, Dhwani, Iknoor and Paavni were partners in a firm. Within a year of starting under a verbal agreement, disagreements arose and they decided to dissolve the firm. The firm appointed Ms. Kavya, a financial advisor and legal consultant, to carry out the dissolution. Assets and external liabilities were first transferred to the Realisation Account. Pass the necessary entries for the following: (i) Dhwani’s Loan of ₹50,000 to the firm was settled by paying ₹42,000. (ii) Paavni’s Loan of ₹40,000 was settled by giving an unrecorded asset. (iii) Loan to Charu of ₹60,000 (an asset of the firm) was settled by the firm paying off Charu’s brother’s loan of the same amount on her behalf. (iv) Iknoor’s Loan of ₹80,000 to the firm was settled by her taking over Machinery of ₹60,000 as part payment, the balance being paid in cash. (CBSE Sample Paper 2023)
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| (i) | ||||
| Dhwani’s Loan A/c Dr. | 50,000 | |||
| To Realisation A/c | 8,000 | |||
| To Bank A/c | 42,000 | |||
| (Dhwani’s loan of ₹50,000 settled by paying ₹42,000) | ||||
| (ii) | ||||
| Paavni’s Loan A/c Dr. | 40,000 | |||
| To Realisation A/c | 40,000 | |||
| (Paavni’s loan settled by giving her an unrecorded asset) | ||||
| (iii) | ||||
| Realisation A/c Dr. | 60,000 | |||
| To Loan to Charu A/c | 60,000 | |||
| (Loan to Charu settled by the firm discharging Charu’s brother’s loan of the same amount on her behalf) | ||||
| (iv) | ||||
| Iknoor’s Loan A/c Dr. | 80,000 | |||
| To Realisation A/c | 60,000 | |||
| To Bank A/c | 20,000 | |||
| (Iknoor’s loan settled by her taking over Machinery worth ₹60,000, balance paid in cash) | ||||
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.9 - 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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