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Accountancy · 2022 · 5 marks
Dissolution of Partnership FirmAccounting Treatment on Dissolution of a Partnership Firm5 markslong answer
CBSE 2022 · Region 5 · Set 1 · Q7
Give the necessary journal entries for the following transactions on dissolution of the firm of Sonu and Monu on 31st March, 2021, after transfer of…
Give the necessary journal entries for the following transactions on dissolution of the firm of Sonu and Monu on 31st March, $\displaystyle 2021$, after transfer of various assets (other than cash and bank balance) and the third party liabilities to Realisation Account. They shared profits and losses in the ratio of $\displaystyle 2$: l . (i) Sonu agreed to take over the firm's goodwill (not recorded in the books of the firm) at a valuation of $\displaystyle 40$,000. (ii) Bills payable of ₹ $\displaystyle 30,000$ falling due on 30th April, $\displaystyle 2021$ were discharged at ₹ $\displaystyle 29$,550. (iii) Stock worth ₹ $\displaystyle 8,00,000$ was taken over by partner, Sonu at $\displaystyle 10$% discount. (iv) Creditors of?$\displaystyle 2,00,000$, accepted machinery valued at $\displaystyle 32,20,000$ in full settlement of their claim. (v) Expenses of realisation ₹ $\displaystyle 10,000$ were paid by partner, Sonu.
Anu, Bhanu and Charu were partners in a firm sharing profits in the ratio of $\displaystyle 2$:$\displaystyle 2$:1. Anu decided to retire from the firm on 31st March, 2021. The balance sheet of the firm on that date was as follows : Balance Sheet ofAnu, Bhanu and Charu as on 31st March, $\displaystyle 2021$ :
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 24,000$ | Bank | $\displaystyle 10,000$ |
| Profit & Loss A/c | $\displaystyle 5,000$ | Debtors $\displaystyle 20,000$ | |
| Less Provision for Doubtful Debts $\displaystyle 400$ | $\displaystyle 19,600$ | ||
| Capitals : | Stock | $\displaystyle 27,000$ | |
| Anu $\displaystyle 31,000$ | Investments | $\displaystyle 10,000$ | |
| Bhanu $\displaystyle 30,000$ | Patents | $\displaystyle 2,400$ | |
| Charu $\displaystyle 22,000$ | $\displaystyle 83,000$ | Premises | $\displaystyle 43,000$ |
| $\displaystyle 1,12,000$ | $\displaystyle 1,12,000$ |
On retirement of Anu, following terms were agreed upon : (i) Anu sold her share of premium for goodwill to Bhanu for $\displaystyle 6,000$ and to Charu for ₹ $\displaystyle 3$,000. (ii) Provision for doubtful debts was to be raised to $\displaystyle 5$% on debtors. (iii) Patents were considered as valueless. (iv) Anu was paid ₹ $\displaystyle 9,600$ through a cheque and balance was transferred to her loan A/c. Prepare Revaluation Account and Anu's Capital Account on her retirement.
Marking-scheme solution
Journal
Date Particulars L.F Debit Credit
Amount Amount
(₹) (₹)
(i) Sonu’s Capital A/c Dr. $\displaystyle 40,000$
To Realization A/c $\displaystyle 40,000$
(Goodwill taken over by Sonu)
(ii)
Realization A/c Dr. $\displaystyle 29,550$
To Bank A/c $\displaystyle 29,550$
(Bills Payable discharged)
(iii)
Sonu’s Capital A/c Dr. $\displaystyle 7,20,000$
To Realization A/c $\displaystyle 7,20,000$
(Stock taken over by partner Sonu)
(iv)
No Entry
(v)
Realization A/c Dr. $\displaystyle 10,000$
To Sonu’s Capital A/c $\displaystyle 10,000$
(Expenses paid by partner Sonu)
Q. Anu, Bhanu and Charu……..
Ans.
Dr. Revaluation A/c Cr.
Particulars Amount Particulars Amount
(₹) (₹)
To Provision for doubtful By Loss on Revaluation
$\displaystyle 600$
debts transferred to:
$\displaystyle 2,400$
To Patents Anu’s Capital A/c $\displaystyle 1,200$
Bhanu’s Capital A/c $\displaystyle 1,200$
Charu’s Capital A/c $\displaystyle 600$
$\displaystyle 3,000$
$\displaystyle 3,000$ $\displaystyle 3,000$
Dr. Anu’s Capital A/c Cr.
Particulars Amount Particulars Amount
(₹) (₹)
To Revaluation A/c $\displaystyle 1,200$ By Balance b/d $\displaystyle 31,000$
To Bank A/c $\displaystyle 9,600$ By Bhanu’s Capital $\displaystyle 6,000$
To Anu’s Loan A/c $\displaystyle 31,200$ By Charu’s Capital $\displaystyle 3,000$
By Profit & Loss A/c $\displaystyle 2,000$
$\displaystyle 42,000$ $\displaystyle 42,000$
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