Dissolution of a Partnership Firm Accountancy - Dissolution of a Partnership Firm

If total assets are ₹ 12,00,000, total liabilities are ₹ 3,00,000, assets are realised at 70% and expenses on realisation are ₹ 10,000, what will be the profit or loss on realisation?

What is a Realisation Account?

Explain the accounting treatment at the time of dissolution of a partnership firm, of the assets and liabilities not already recorded in the books of the firm.

Mention the order in which the proceeds from the sale of Assets are utilised at the time dissolution of partnership firm.

L and M were partners in a firm sharing profits in the ratio of 4 : 3. The firm was dissolved on 28.2.2018.
Pass necessary journal entries for the following transactions:

1. Debtors, ₹ 20,000 were taken over L by for ₹ 18,000.
2. Creditors ₹ 15,000 were Paid at a discount of 5%
3. Expenses of dissolution ₹ 1,000 were paid by M.
4. Loss on realisation was ₹ 7,000.

Write the circumstances under which a firm is dissolved.

A and B decided to dissolve their firm on 1st January 2018. From the information given below complete the Realisation A/c, Capital A/c and the Bank A/c:

Clarify the difference between dissolution of a firm and dissolution of partnership.

How will you deal with the Realisation expenses at the time of dissolution of a firm?

Ram, Rahim and Rehman were partners in a firm sharing profits in the ratio of 4 : 1 : 5. On 28.2.2018 the firm was dissolved. From the information given below complete Realisation Account, Capital Account and Bankl Account:

P and Q share profits and losses in 5 : 3. What Journal entries would be passed for the following transactions on the dissolution of their firm, after various assets (other than cash) and third party liabilities have been transferred to Realisation Account?

1. Profit and Loss Account (Dr. Balance) appeared in the books at ₹ 30,000.
2. P was asked to look into the dissolution of the firm for which he was allowed a commission of ₹ 2,500.
3. Q took over part of the stock at ₹ 6,400 (being 20% less than the book value).
4. An unrecorded liability amounting to ₹ 10,000 was settles at ₹ 8,000.
5. Motor Car of the book value of ₹ 80,000 taken over by Creditors of the book value of ₹ 60,000 in full settlement.

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to dissolve their firm on 1st Jan. 2018. Complete the Realisation Account, Loan Account, Capital Account and Bank Account from the information given below:

Angad, Raman and Harshit were partners in a firm. They decided to dissolve their firm. Pass necessary journal entries for the following after various assets (other than cash and bank) and the third party. liabilities have been transferred to Realisation Account:

1. There was a stock of ₹ 90,000. Raman took over 50% of the stock at 10% discount and remaining stock was sold at 40% profit on book value.
2. Profit and Loss A/c was showing a debit balance of ₹ 15,000 which was distributed among the partners.
3. A machinery which was not recorded in the books was sold for ₹ 2,000.
4. Angad was paid only ₹ 5,000 (in full settlement) for his loan to the firm which amounted to ₹ 5,500.
5. Realisation expenses amounting to ₹ 5,000 paid by Harshit.
6. There were 100 shares of ₹ 10 each in DCM Ltd. acquired at a cost of ₹ 1,200 which had been written off completely from the books. These shares are valued at ₹ 9 each and divided among the partners in their profit sharing ratio.