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Accountancy · 2026 · 6 marks
Dissolution of Partnership FirmAccounting Treatment on Dissolution of a Partnership Firm6 markslong answer
CBSE 2026 · Region 4 · Set 1 · Q26
Arhan and Kanak were partners in a firm sharing profits and losses in the ratio of 3: 2. Their Balance Sheet as at 31st March, 2025 was as follows:…
Arhan and Kanak were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. Their Balance Sheet as at 31st March, $\displaystyle 2025$ was as follows :
Balance Sheet of Arhan and Kanak as at 31st March, $\displaystyle 2025$
The firm was dissolved on the above date and the following transactions took place : (i) $\displaystyle 50$% of the creditors were given stock in full settlement of their dues. Remaining creditors were settled at $\displaystyle 20$% discount. (ii) Investments were taken over by Kanak at ₹ $\displaystyle 8,40$,000. (iii) Debtors realized ₹ $\displaystyle 8,50,000$ and machinery was sold at $\displaystyle 70$% of book value. (iv) Realisation expenses amounted to ₹ $\displaystyle 1,20,000$ which were paid by Arhan. Prepare Realisation Account.
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Machinery | $\displaystyle 12,00,000$ | |
| Arhan $\displaystyle 6,00,000$ | Investments | $\displaystyle 7,00,000$ | |
| Kanak $\displaystyle 8,00,000$ | Debtors | $\displaystyle 10,00,000$ | |
| $\displaystyle 14,00,000$ | Stock | $\displaystyle 4,00,000$ | |
| Bank Loan | $\displaystyle 7,00,000$ | Cash | $\displaystyle 1,00,000$ |
| Creditors | $\displaystyle 13,00,000$ | ||
| $\displaystyle 34,00,000$ | $\displaystyle 34,00,000$ |
Marking-scheme solution
Books of Arhan and Kanak
Dr. Realisation A/c Cr.
Particulars Amount Particulars Amount
(₹) (₹)
To Sundry Assets: By Sundry Liabilities:
Machinery $\displaystyle 12,00,000$ Bank loan $\displaystyle 7,00,000$
Investments $\displaystyle 7,00,000$ Creditors $\displaystyle 13,00,000$ $\displaystyle 20,00,000$
Debtors $\displaystyle 10,00,000$ By Bank/Cash A/c $\displaystyle 8,50,000$
Stock $\displaystyle 4,00,000$ $\displaystyle 33,00,000$ (Debtors)
To Bank/Cash A/c $\displaystyle 5,20,000$ By Bank/Cash A/c $\displaystyle 8,40,000$
(Creditors) (Machinery)
To Bank/ Cash A/c $\displaystyle 7,00,000$ By Kanak’s Capital A/c $\displaystyle 8,40,000$
(Bank loan) (Investments)
To Arhan’s Capital A/c $\displaystyle 1,20,000$ By Loss transferred to capital
(Expenses) A/c:
Arhan $\displaystyle 66,000$
Kanak $\displaystyle 44,000$ $\displaystyle 1,10,000$
$\displaystyle 46,40,000$ $\displaystyle 46,40,000$
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CBSE Class 12 Accountancy past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.