Question 19 Chapter 7 of +2-A
19. Achal and Vishal were partners in firm sharing profits in the ratio of 3: 5 . On 31st March 2018 their Balance Sheet was as follows:
| Liabilities | Amount | Assets | Amount | |
| Capital A/cs: | Land and Building | 4,00,000 | ||
| Acha | 3,00,000 | Machinery | 3,00,000 | |
| Vichal | 5,00,000 | 8,00,000 | Debtors | 2,22,000 |
| Creditors A/c | 1,79,000 | Cash at Bank | 78,000 | |
| Employees’ Provident Fund A/c | 21,000 | |||
| 10,00,000 | 10,00,000 |
The firm was dissolved on 1st April 2018 and the Assets and Liabilities were settled as follows :
a Land and Building b realised 4,30,000.
b Debtors realised 2,25,000 with interest and 1,000 were recovered for Bad Debts written off last year.
c There was an Unrecorded Investment which was sold for 25,000.
d Vichal took over Machinery at 2,80,000 for cash. e 50% of the Creditors were paid 4,000 less in full settlement and the remaining Creditors were paid the full amount.
Pass necessary journal entries for dissolution of the firm
The solution of Question 19 Chapter 7 of +2-A: –
| Date | Particulars |
L.F. | Debit | Credit | |
| Realization A/c | Dr. | 9,22,000 | |||
| To Land & Building A/c | 4,00,000 | ||||
| To Machinery A/c | 3,00,000 | ||||
| To Debtors A/c | 2,22,000 | ||||
| (Being assets transferred) | |||||
| Creditors A/c | Dr. | 1,79,000 | |||
| Employees’ Provident Fund A/c | Dr. | 21,000 | |||
| To Realization A/c | 2,00,000 | ||||
| (Being liabilities transferred) | |||||
| Bank A/c | Dr. | 4,30,000 | |||
| To Realization A/c | 4,30,000 | ||||
| (Being Land & Building realized) | |||||
| Bank A/c 2, 25, 000 +1, 000 | Dr. | 2,26,000 | |||
| To Realization A/c | 2,26,000 | ||||
| (Being Debtors realized along −with Bad −debts recovered) | |||||
| Bank A/c | Dr. | 25,000 | |||
| To Realization A/c | 25,000 | ||||
| (Being Unrecorded Investments sold) | |||||
| Bank A/c | Dr. | 2,80,000 | |||
| To Realization A/c | 2,80,000 | ||||
| (Being Machinery took over by Vichal for Cash) | |||||
| Realization A/c | Dr. | 1,96,000 | |||
| To Bank A/c 85, 500 +89, 500 +21, 000 | 1,96,000 | ||||
| (Being Remuneration paid) | |||||
| Realization A/c | Dr. | 43,000 | |||
| To Achal’s Capital A/c | 16,125 | ||||
| To Vichal’s Capital A/c | 26,875 | ||||
| (Being profits on realization transferred) | |||||
| Achal’s Capital A/c | Dr. | 3,16,125 | |||
| Vichal’s Capital A/c | Dr. | 5,26,875 | |||
| To Bank A/c | 8,43,000 | ||||
| (Being Partners paid off) | |||||
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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