DISSOLUTION OF PARTNERSHIP

1. Identify a situation when court may order for dissolution of a partnership firm.
[AI 2014 C]
2. A and B are partners in a firm sharing profits in the ratio of 3:2. Mrs. A has given a loan
of ₹20,000 to the firm and the firm has obtained a loan of ₹10,000 from B. The firm was
dissolved and it’s were realised for ₹25,000. State the order of payment of Mrs. A’s loan
and B’s Loan with reason, if there were no creditors of the firm. [Delhi 2010 C]

3. Name the asset that is not transferred to the debit side of Realisation Account, but
brings certain amount of cash against its disposal at the time of dissolution of firm.
[Delhi 2014 C]
4. Name the liability which is not shown in Balance sheet, but paid at the time of
dissolution of the firm. [Delhi 2014 C]
5. Pass journal entries for following transactions on dissolution of firm:
(a) Loan of ₹10,000 advanced by a partner to the firm.
(b) X, a partner, takes over unrecorded assets at ₹300.
(c) Undistributed balance of profit and loss account (debit) ₹30,000. The firm had three
partners X, Y and Z.
(d) Assets of the firm realised ₹1,25,000.
(e) Y who undertakes to carry out the dissolution proceedings is paid ₹2,000 for the same.
(f) Creditors paid ₹28,000 in full settlement of their account of ₹30,000. [CBSE 2004]

6. Pass necessary journal entries for the following transactions in the books of the firm of
P and Q after various assets and outside liabilities have been transferred to Realisation
Account:
(a) Bank Loan ₹12,000 was paid.
(b) Stock worth ₹16,000 were taken over by a partner Q.
(c) Partner P paid a creditor ₹4,000.
(d) An asset not appearing in the books of accounts realised ₹1,200.
(e) Expenses on realization ₹2,000 were paid by partner Q.
(f) Profits on realization ₹36,000 was distributed between P and Q in the ratio of 5:4.
[Delhi 2011]
7. Pass necessary journal entries for the following transactions on the dissolution of the
firm of K and L after various assets and outside liabilities have been transferred to
Realisation Account:
(a) Bank loan ₹15,000 was paid.
(b) Stock worth of ₹20,000 was taken over by L.
(c) K paid ₹9,000 to a creditor.
(d) A liability not appearing in the books was settled at ₹3,700.
(e) Expense on Realisation ₹900 were paid by L.
(f) Loss on Realisation ₹7,100 was divided among the partners K and L in the ratio of 7:3.
[CBSE 2011]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 1
8. X, Y and Z are partners in a firm sharing profits and losses in the ratio of 3:2:1. The firm
was dissolved on 1st March 2013. After transferring assets and third party liabilities to
the realization account you are provided following information:
(a) There was a balance of ₹18,000 in firm’s profit & loss account.
(b) There was an unrecorded bike of ₹50,000 which was taken over by X.
(c) Creditors of ₹5,000 were paid ₹4,000 in full settlement of accounts.
Pass necessary journal entries for the above at the time of dissolution of firm.[CBSE 2013 C]
9. Rohit, Kunal and Sarthak are partners in a firm. They decided to dissolve their firm. Pass
necessary journal entries for the following after various assets and third party liability
have been transferred to Realisation Account:
(a) Kunal agreed to pay off his wife’s loan of ₹6,000.
(b) Rohit had given a loan to the firm of ₹70,000 to the firm which was duly paid.
(c) A machine which was not recorded in the books was taken over by Kunal at ₹3,000
whereas its expected value was ₹5,000.
(d) The firm had a debit balance of ₹15,000 in profit & loss account on the date of
dissolution.
(e) Sarthak paid the realization expense of ₹16,000 out of his private funds who was to get
a remuneration of ₹15,000 for completing the dissolution process and was responsible for
all the realization expenses. [CBSE 2012 C]

10. Hema and Garima were partners in a firm sharing profits and losses in the ratio of 3:2.
On 31st March 2015 their Balance Sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 36,000 Bank 40,000
Garima’s Husband loan 60,000 Debtors 76,000
Hema’s loan 40,000 Stock 2,00,000
Capitals: Furniture 20,000
Hema 2,00,000 Leasehold premises 1,00,000
Garima 1,00,000
4,36,000 4,36,000
On the above date the firm was dissolved. The various assets were realized and liabilities
were settled as follows:
(a) Garima agreed to pay her husband’s loan.
(b) Leasehold premises realized ₹1,50,000 and debtors ₹2,000 less.
(c) Half of the creditors agreed to accept furniture of the firm as full settlement of their
claim and remaining half agreed to accept 5% less.
(d) 50% stock was taken over by Hema on cash payments of ₹90,000 and remaining stock
was sold for ₹94,000.
(e) Realization expense of ₹10,000 were paid by Garima on behalf of firm
Pass necessary journal entries for dissolution of firm. [CBSE Sample paper 2016]
[Ans. Profit on Realisation ₹20,900]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 2
11. Lal and Pal were partners in a firm sharing profits in the ratio of 3:7. On 1 st April 2015
their firm dissolved. After transferring assets and outside liabilities to realization
account, you are given following information:
(a) A creditor of ₹3,60,000 accepted machinery valued at ₹5,00,000 and paid to the firm
₹1,40,000.
(b) A second creditor for ₹50,000 accepted stock at ₹45,000 in full settlement of his claim.
(c) A third creditor amounting to ₹90,000 accepted ₹45,000 in cash and investments worth
₹43,000 in full settlement of his claim.
(d) Loss on dissolution was ₹15,000.
Pass necessary journal entries for the above transactions in the books of the firm assuming
that all payments are made by cheque. [CBSE 2016]

12. Prem and Suresh were partners in a firm sharing profits in the ratio of 7:8. On 1 st April
2015 their firm was dissolved. After transferring assets and outside liabilities to
realization account, you are given following information:
(a) Raman, a creditor of ₹4,00,000 accepted land valued at ₹7,00,000 and paid ₹3,00,000 to
the firm.
(b) Gopal, a second creditor for ₹1,05,000 accepted ₹90,000 in cash and investments of
₹14,000 in full settlement of his account.
(c) Hari, a third creditor amounting to ₹75,000 accepted stock of the book value ₹60,000 for
₹45,000 and the balance was paid to him by cheque.
(d) Loss on dissolution was ₹45,000.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE 2016]

13. Stock ₹1,60,000 , X took over 50% of the stock at a discount of 20%. Remaining stock
was sold off at a profit of 30% on cost. Realisation account is to be credited with:
(a) ₹64,000 (b) ₹1,04,000 (c) ₹1,68,000 (d) ₹ 1,70,000
14. Bills payable of ₹40,000 falling due after 1 month were discharged at a discount of 18%
p.a. Realisation a/c is to be debited with:
(a) ₹32,800 (b) ₹39,400 (c) ₹39,600 (d) None of these

15. Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals.
On 31st March 2013 the firm dissolved.
(a) Ramesh took over 50% of stock at ₹10,000 less than book value. The remaining stock
was sold at a loss of ₹15,000. Debtors were realised at a discount of 5%.
(b) Furniture was taken over by Umesh for ₹50,000 and machinery was sold for ₹4,50,000.
(c) Creditors were paid in full.
(d) There was an unrecorded bill for repairs for ₹1,60,000 which was settled at ₹1,40,000.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 3
 Their Balance sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 1,70,000 Bank 1,10,000
Workmen compensation reserve 2,10,000 Debtors 2,40,000
General Reserve 2,00,000 Stock 1,30,000
Ramesh’s Current account 80,000 Furniture 2,00,000
Capital a/c: Machinery 9,30,000
Ramesh 7,00,000 Umesh’s current account 50,000
Umesh 3,00,000
16,60,000 16,60,000
Prepare Realisation Account. [CBSE 2014]
[Ans. Loss on Realisation ₹8,07,000]
16. Sanjay and Sameer were partners in a firm sharing profits in the ratio of 2:3. On 31 st
March 2011, their Balance Sheet was as follows:
Liabilities ₹ Assets ₹
Capital a/c’s: Land & Building 3,00,000
Sanjay 2,00,000 Stock 1,00,000
Sameer 3,00,000 5,00,000 Debtors 1,50,000
Creditors 1,05,000 Bank 1,55,000
Workmen Compensation fund 1,00,000

7,05,000 7,05,000
The firm was dissolved on 1stApril, 2011 and the Assets and Liabilities were settled as
follows:
(a) Sanjay agreed to take over Land and Building at ₹3,50,000 by paying cash.
(b) Stock was sold for ₹90,000.
(c) Creditors accepted Debtors in full settlement of their claim.
Pass necessary journal entries for dissolution of the firm. [CBSE 2012]

17. P and Q were partners in a firm sharing profits in the ratio of 3:2. On 31 st March 2011,
their Balance Sheet was as follows:
Liabilities ₹ Assets ₹
Capital a/c’s: Goodwill 80,000
P 80,000 Land and Building 80,000
Q 70,000 1,50,000 Stock 60,000
Creditors 50,000 Debtors 40,000
Workmen Compensation Fund 80,000 Bank 20,000

2,80,000 2,80,000

The firm was dissolved on 1st April, 2011 and the assets and Liabilities were settled as
follows:
(a) Creditors agreed to take over Land and Building at a valuation of their claim.
(b) Stock was taken over by Q at ₹50,000 for cash.
(c) Bad debts proved ₹5,000.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 4
 (d) Goodwill was found valueless.
(e) Workmen Compensation Claim was ₹80,000.
Pass necessary journal entries for dissolution for the firm. [CBSE 2012]
[Ans. Loss on Realisation ₹125000 and Payment to P and Q ₹5000 and ₹20000]

18. C and D were partners in a firm sharing profits in the ratio of 3:2. On 28th February, 2016
the firm was dissolved. After Transferring assets and outside liabilities to Realisation
Account, you are given the following information:
(a) A creditor for ₹2,00,000 accepted building of ₹2,80,000 at ₹2,20,000 and paid the firm
₹20,000.
(b) A second creditor for ₹75,000 accepted furniture at ₹60,000 in full settlement of his
claim.
(c) A third creditor amounting to ₹80,000 accepted ₹20,000 in cash and investments of
book value of ₹65,000 in full settlement of his claim.
(d) Loss on dissolution was ₹7,500.
Pass necessary journal entries in the books of the firm assuming that all payments are
made by cheque. [CBSE 2016]

19. Pass necessary journal entries for the following transactions on the dissolution of the
firm of James and Haider were sharing profits and losses in the ratio of 2:1. The various
assets and outside liabilities have been transferred to Realisation account.
(a) James agreed to pay off his brother’s loan ₹10,000.
(b) Debtors realised ₹12,000.
(c) Haider took over all Investments at ₹12,000.
(d) Sundry creditors ₹20,000 were paid at 5% discount.
(e) Realisation expenses amounted to ₹2,000.
(f) Loss on Dissolution was ₹10,200. [CBSE 2011]

20. Hanif and Jubed were partners in a firm sharing profits in the ratio of their capitals. On
31st March 2013 their Balance sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 1,50,000 Bank 2,00,000
Workmen Compensation Reserve 3,00,000 Debtors 3,40,000
General Reserve 75,000 Stock 1,50,000
Hanif’s Current Account 25,000 Furniture 4,60,000
Capital A/c’s: Machinery 8,20,000
Hanif 10,00,000 Jubed’s Current Account 80,000
Jubed 5,00,000

20,50,000 20,50,000
On the above date the firm was dissolved:
(a) Debtors were realised at a discount of 5%. 50% of stock was taken over by Hanif at 10%
less than the book value. Remaining Stock was sold for ₹65,000.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 5
(b) Furniture was taken over by Jubed for ₹1,35,000. Machinery was sold as scrap for
₹74,000.
(c) Creditors were paid in full.
(d) Expense on realization ₹8,000 were paid by Hanif.
Prepare Realisation Account. [Ans. Loss on Realisation ₹11,13,500] [CBSE 2014]

21. Pass the necessary journal entries for the following transactions on the dissolution of
the firm of T and P after various assets and liabilities have been transferred to
Realisation Account.
(a) Bank Loan ₹34,000 was paid.
(b) Furniture worth of ₹70,000 was taken over by partner T at ₹43,000.
(c) Partner P agreed to pay a creditor ₹7500.
(d) A computer previously written off, realised ₹3900.
(e) Expenses of realization ₹3200 were paid by partner T.
(f) Profit on realization ₹4800 was distributed between T and P in the ratio of 5:3.
[CBSE 2011]
22. Raman and Richa were partners in a firm sharing profits in the ratio of 7:3. On 31 st
March 2011 their Balance sheet was as follows:
Liabilities ₹ Assets ₹
Capital a/c’s: Land and building 7,50,000
Raman 7,00,000 Furniture 1,20,000
Richa 3,00,000 Debtors 1,32,000
Sundry creditors 1,75,000 Stock 1,03,000
cash 70,000

11,75,000 11,75,000

The firm was dissolved on 1st April 2011 and the assets and liabilities were settled as
follows:
(a) *Land and Building was taken over by Raman at a depreciation of 10% for cash.
(b) Creditors of ₹1,25,000 took over stock and debtors in full settlement of their claim.
(c) Remaining creditors were paid by Richa.
(d) Furniture realised ₹5,000 less than the book value.
(e) Expense of realization were ₹400.
Pass necessary journal entries for dissolution of the firm. [Delhi 2012]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 6
 23. Parth and Shivika were partners in a firm sharing profits and losses in the ratio of 3:2.
Their balance sheet was as follows:
Liabilities ₹ Assets ₹
Creditors 80,000 Bank 1,72,000
Shivika’s sister’s loan 20,000 Debtors 27,000
Capital a/c’s: Stock 50,000
Parth 1,75,000 Furniture 2,20,000
Shivika 1,94,000
4,69,000 4,69,000
On the above date the firm was dissolved. The assets were realised and the liabilities
were paid off as follows:
(a) 50% of furniture was taken over by Parth at 20% less than book value. The remaining
furniture was sold for ₹1,05,000.
(b) Debtors realised ₹26,000.
(c) Stock was taken over by shivika for ₹29,000.
(d) *Shivika’s sister’s loan was paid off along with interest of ₹2,000.
(e) Expense on realization amounted to ₹5,000.
Prepare Realisation Account, Partner’s Capital Account and Bank Account.[CBSE 2015 C]
[Ans. Loss On Realisation ₹56,000; Final Payment Parth ₹53,400 and Shivika ₹1,42,600 ;
Total of Bank Account ₹3,03,000]

24. Bhuvan, Suraj and Ibrahim were partners in a firm sharing profits in the ratio of 3:2:1.
On 30th June 2014 they decided to dissolve the firm. Following was the balance sheet of
the firm on that date:
Liabilities ₹ Assets ₹
Creditors 50,400 Cash 13,700
Investment fluctuation fund 10,000 Stock 20,100
Reserve fund 12,000 Debtors 62,600
Capital a/c’s: Investments 16,000
Bhuvan 30,000 Furniture 20,000
Suraj 20,000
Ibrahim 10,000

1,32,400 1,32,400
The assets were realised and liabilities were paid off as follows:
(a) Investments were taken over by Bhuwan for ₹18,000.
(b) Stock was taken over by Suraj for ₹17,500 and furniture was taken over by Ibrahim at
book value.
(c) ₹60,500 were realised from debtors,
(d) Creditors were settled in full and realization expense were ₹4,500.
Prepare Realisation Account, Cash Account and Partner’s Capital Accounts. [CBSE 2015 C]
[Ans. Gain on Realisation ₹2,800; Final Payments Bhuvan ₹19,400; Suraj ₹7,433; Cash
brought in by Ibrahim ₹7,533. Total of Cash Account ₹81,733]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 7
 25. Following is the balance sheet of A and B as at March 31 st 2016:
Liabilities ₹ Assets ₹
Sundry creditors 30,000 Cash in hand 500
Bills Payable 8,000 Cash at bank 8000
Mrs. A’s Loan 5,000 Stock in trade 5,000
Mrs. B’s Loan 10,000 Investments 10,000
General Reserve 10,000 Debtors 20,000
Investment fluctuation Reserve 1,000 Less: provision (2,000) 18,000
A’s Capital 10,000 Plant and machinery 20,000
B’s Capital 10,000 Building 15,000
Goodwill 4,000
Profit & loss account 3,500
84,000 84,000
The firm was dissolved on March 31st 2016 and the following was agreed:
(a) A promised to pay Mrs. A’s loan and took stock in trade at ₹4,000.
(b) B took half the investments at 10% discount.
(c) Debtors realised ₹19,000.
(d) Creditors and Bills payable were due on an average basis of one month after 31 st march
but they were paid immediately on March 31st @6% discount p.a.
(e) Plant realised ₹25,000; Buidling ₹40,000; Goodwill ₹6,000 and remaining investments at
₹4,500.
(f) There was an old typewriter in the firm which had been written off completely from the
books. It is now estimated to realize ₹300. It was taken by B at its estimated price.
(g) Realisation expense were ₹1,000.
Prepare Realisation account, Bank account and Partner’s capital account in the books of
the firm. [CBSE 2001, 2003]
[Ans. Gain on Realisation ₹31,490 ; Final Payment to A: ₹29,995 and B:₹24,195]

26. G and H were partners in a firm sharing profits in the ratio of 9:7. On 1 st April 2015 their
firm was dissolved. After transferring assets (other than cash) and outsider’s liabilities
to realization account you are given the following information:
(a) Mohan, a creditor for ₹2,30,000 accepted debtors of ₹2,00,000 at a discount of 10%
and the balance was paid to him by cheque.
(b) Sohan, a second creditor for ₹7,00,000 accepted land of value of ₹10,00,000 at
₹15,00,000 and paid the balance to firm by cheque.
(c) Ram, a third creditor for ₹80,000 took over stock of book value of ₹40,000 at ₹30,000
and investments of ₹48,000 in full settlement of his cliam.
(d) Loss on Dissolution was ₹48,000.
Pass necessary journal entries for the above transactions in books of G and H. [CBSE 2016]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 8
27. A and B sharing profits and losses in the ratio of 3:2 agreed upon dissolution of the firm
on March 31st 2016 at which date their balance sheet was as follows:
Liabilities ₹ Assets ₹
Trade creditors 80,000 Cash 6,000
Bills payable 25,000 Bank 30,000
Loan from Mrs. B 15,000 Stock 80,000
Reserve 24,000 Debtors 66,000
Profit & Loss a/c 11,000 Less: Provision (6,000) 60,000
Capital A/c’s: Plant and Machinery 30,000
A 90,000 Land and Building 33,000
B 30,000 Furniture 10,000
Goodwill 15,000
Prepaid Insurance 1,000
Deferred Revenue expenditure 10,000

2,75,000 2,75,000
The firm was dissolved on the given date and the following transactions took place:
(a) B undertook to pay Mrs. B’s Loan
(b) A took 50% stock at a discount of 20%.
(c) Remaining stock was sold at a profit of 30% on cost.
(d) ₹12,000 of the book debts proved bad.
(e) Land and Building realised ₹1,40,000.
(f) Half of the trade creditors accepted plant and machinery at 10% less than book value
and cash of ₹5000 in full settlement of their claims.
(g) Remaining trade creditors were paid out at a discount of 10%.
(h) Bills payable were paid in full.
(i) Realisation expenses were ₹5,000.
(j) Z, an old customer, whose account was written off as bad in previous year, paid ₹500
which is not included in the above stated book debts.
(k) A contingent liability (not provided for) of ₹1,000 was also discharged.
(l) Furniture was sold for ₹10,000.
Prepare Realisation Account, Partner’s Capital Account and Bank Account.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 9
 28. Following is the balance sheet of A and B at March 31 st 2016 who share profits and
losses in the ratio of 3:2.
Liabilities ₹ Assets ₹
Sundry creditors 75,000 Cash at Bank 4,500
Bills Payable 30,000 Stock 25,000
Mrs. A’s Loan 25,000 Debtors 40,500
Workmen Compensation Reserve 8,000 Less: Provision (1,000) 39,500
Bank Loan 50,000 Bills Receivable 15,000
General Reserve 27,000 Investments 60,000
Capital a/c’s: Plant & Machinery 80,000
A 30,000 Building 61,000
B 40,000

2,85,000 2,85,000
On the above date, the firm was dissolved and the following arrangements were made:
(a) A promised to pay Mrs. A’s Loan and took half of the investments @10% discount.
(b) Stock and remaining Investments were sold at 10% discount.
(c) Goodwill was taken by B for ₹40,000. He also agreed to pay Bills Payable at a discount
of 10%.
(d) Debtors realised ₹35,000; Bills Receivable ₹13,500 ; Plant and Machinery ₹38,900 and
Building ₹1,20,000.
(e) There was a car in the firm which was completely written off from the books. It was
taken over by A for ₹23,400.
(f) Creditors were paid at 90% in full and final settlement of their dues.
(g) Expense of dissolution amounted to ₹1,700.
Prepare Realisation Account; Partner’s Capital Account and Bank Account in books of
the firm. [CBSE 2002 C]
[Ans. Gain on Realisation ₹75,600; Final Payment to Partners A: ₹70,960 and B : ₹71,240 and
Bank Account total ₹2,61,400]
29. Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3:1:1. On 31 st
March, 2015 they decided to dissolve their firm. On that date their Balance Sheet was
as under:
Liabilities ₹ Assets ₹
Creditors 60,000 Bank 50,000
Arnab’s Brother’s Loan 95,000 Debtors 1,70,000
Dhrupad’s Loan 1,00,000 Less: Provision (20,000) 1,50,000
Investment fluctuation Fund 50,000 Stock 1,50,000
Capital a/c’s: Investments 2,50,000
Arnab 2,75,000 Building 3,00,000
Ragini 2,00,000 Profit & Loss a/c 50,000
Druphad 1,70,000

9,50,000 9,50,000

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 10
The assets were realised and liabilities were paid as under:
(a) Arnab agreed to pay his brother’s loan.
(b) Investments realised 20% less.
(c) Creditors were paid 10% less.
(d) Building was auctioned for ₹3,55,000. Commission on auction was ₹5,000.
(e) 50% stock was taken over by Ragini at market price which was 20% less than book value
and the remaining was sold at market value.
(f) Dissolution expense were ₹8,000. ₹3,000 were to be borne by firm and balance by
Dhrupad. The expense were paid by him.
Prepare Realisation Account; Partner’s Capital Account and Bank Account. [CBSE 2016 C]
[Ans. Loss on Realisation ₹1,27,000; Final Payment: Arnab ₹2,63,800; Ragini ₹1,04,600 and
Dhrupad ₹1,37,600 and Total of Bank account ₹6,60,000]

30. A, B and C were partners in a firm sharing profits in the ratio of 3:1:1. The firm was
dissolved on March 31st 2009. It was agreed that:
(a) A to take over bills receivable at ₹800; Debtors amounting to ₹20,000 at ₹17,200 and
the Creditors of ₹6000 were to be paid by him at this figure.
(b) B is to take over all stock for ₹7000 and some sundry assets at ₹7,200 (Being 10%
less than the book value).
(c) C to take over remaining sundry assets at 90% of book value and assume the
responsibility of discharge of loan together with accrued interest of ₹300.
(d) The expense of Realisation were ₹270.The remaining debtors were sold to a debt
collection agency at 50% book value.
Their Balance Sheet was as follows:
Liabilities ₹ Assets ₹
Capital a/c’s: Sundry Assets 17,000
A 27,500 Stock 7,800
B 10,000 Debtors 24,200
C 7,000 44,500 Less: Provision (1,200) 23,000
Loan 1,500 Bills Receivable 1,000
Creditors 6,000 Cash 3,200

52,000 52,000

Prepare Realisation Account; Partner’s Capital Account and Cash Account.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 11
 31. A, B and C were partners sharing profits in the ratio of 2:2:1. They decided to dissolve
the firm on March 31st 2017 when the Balance sheet was:
Liabilities ₹ Assets ₹
Creditors 40,000 Cash 40,000
Bills Payable 46,000 Debtors 70,000
Employees provident fund 32,000 Less: Provision (6,000) 64,000
Mrs. A’s Loan 38,000 Stock 50,000
C’s Loan 30,000 Investments 60,000
Investment fluctuation Reserve 16,000 Furniture 42,000
Capital a/c’s: Machinery 1,36,000
A 1,20,000 Land 1,00,000
B 1,00,000 Goodwill 30,000
C 1,00,000

5,22,000 5,22,000
Following transactions took place:
(a) A took over stock at ₹36,000. He also took over his wife’s loan.
(b) B took over half of debtors at ₹28,000.
(c) C took over Investments at ₹54,000 and half of the creditors at their book value.
(d) Remaining debtors realised 60% of their book value. Furniture sold for ₹30,000;
Machinery ₹82,000 and Land ₹1,20,000.
(e) An unrecorded asset was sold for ₹22,000.
(f) Realisation expense amounted to ₹4,000.
Prepare necessary ledger accounts to close the books of the firm.
[Ans. Loss on Realisation ₹77,000; Final Payments: A-₹91,200; B ₹41,200 and C ₹50,600;
Total of Cash A/C: ₹3,15,000] [CBSE 2003]

32. Following is the Balance Sheet of Arvind and Balbir as at March 31 st 2017:
Liabilities ₹ Assets ₹
Trade creditors 45,000 Cash 750
Bills Payable 12,000 Bank 12,000
Mrs. Arvind’s Loan 7,500 Stock 7,500
Mrs. Balbir’s Loan 15,000 Investments 15,000
Reserve Fund 15,000 Book Debts 30,000
Investment Fluctuation Reserve 1,500 Less: Provision (3,000) 27,000
Capital a/c’s: Building 22,500
Arvind 15,000 Plant 30,000
Balbir 15,000 Goodwill 6,000
Profit & Loss a/c 5,250

1,26,000 1,26,000

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 12
 The firm was dissolved on the above date under the following arrangements:
(a) Arvind promised to pay off Mrs. Arvind’s loan and took stock at ₹6,000.
(b) Balbir took half the investments @10% discount.
(c) Book debts realised ₹28,500.
(d) Trade ceditors and Bills Payable were due on average basis of one month after 31 st
March, but were paid immediately on 31st March @2% discount p.a.
(e) Plant realised ₹37,500; Building ₹60,000; Goodwill ₹9,000 and remaining investments
₹6750.
(f) An old typewriter, written off completely from the books, now estimated to realize
₹450. It was taken by Balbir at the estimated price.
(g) Realisation expense were ₹1500.
Show realization account; Partner’s Capital account and Bank account.
[Ans. Gain on Realisation ₹47,045 and Total of Bank account ₹1,54,500]

33. Jayant and Ramakant were partners in a firm. On 31st March 2014 their Balance Sheet
was as follows:
Liabilities ₹ Assets ₹
Creditors 75,000 Bank 70,000
Workmen Compensation fund 45,000 Debtors 2,00,000
Jayant’s Current Account 15,000 Stock 20,000
Capital’s: Furniture 20,000
Jayant 3,00,000 Machinery 3,12,000
Ramakant 2,00,000 Ramakant’s Current Account 13,000

6,35,000 6,35,000
On the above date firm was dissolved:
(a) Jayant took over 40% of stock at 20% less than book value and remaining stock was sold
for ₹15,000. Furniture realized ₹20,000.
(b) An unrecorded asset was sold for ₹3,000. Machinery was sold at a loss of ₹75,000.
(c) Debtors were realized at a discount of ₹10,000.
(d) There was an outstanding bill for repairs for which ₹38,000 were paid.
Prepare Realization Account. [CBSE 2014]
[Ans. Loss On Realisation ₹1,18,600]

34. Journalise the following transactions at the time of dissolution of the firm:
(a) ₹10,000 bills payable at settled at ₹8000.
(b) Debtors ₹26,400, provision for doubtful debts ₹2400, ₹4800 of the book debts proved
bad.
(c) Partner Y’s loan paid off ₹20,000

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 13
 35. Pass the necessary journal entries for the following transactions on the dissolution of
the firm of A, B and C who were sharing profits in the ratio of 4:3:3 after the transfer of all
assets other than cash and external liabilities to realisation account.

(a) A one of the partners was to bear all the realisation expenses for which he was given a
commission of 2% of net cash realised from the dissolution.
Cash realised from assets was ₹25,000 and cash paid for liabilities amounted to ₹5000.
Expense of realisation ₹1000 paid by A.
(b) There was a bill for ₹1000 under discount. The bill was received from X who proved
insolvent and a first and final dividend of 25% was received from his estate.
(c) Commission received in advance ₹1000 was returned to customers after deducting ₹200.

36. Krishna and Priyansh are partners sharing profits in the ratio of 1:1. They decided to
dissolve their firm. Pass necessary journal entries for the following transactions:
(a) Workmen compensation reserve stood at ₹6000 and liability in respect of it was
ascertained at ₹7500.
(b) Realisation Expenses amounted to ₹15,000 were paid by firm on behalf of a Partner,
Krishna.
(c) There was an unrecorded furniture of ₹6000 which was taken over by Krishna at ₹5000.

37. Rahul, Chirag and Shreya were partners in a firm. Court has passed order for the
dissolution of the firm. The balance sheet of the firm stood as follows on the date of
dissolution:
Liabilities ₹ Assets ₹
Creditors 48,000 Machinery 90,000
Workmen compensation reserve 54,000 Computer 9600
Investment fluctuation reserve 6000 Furniture 60,000
Mrs. Rahul’s loan 30,000 Investments 72,000
Mrs. Chirag’s loan 24,000 Stock 1,44,000
Rahul’s capital a/c 2,40,000 Shreya’s capital 24,000
Chirag’s capital a/c 1,44,000 Profit and Loss a/c 1,08,000
Cash 12,000
Bank 26,400
The following information is given to you:
(a) Rahul promised to pay Mrs. Rahul’s loan and took stock at ₹1,20,000
(b) Chirag took half of the investments at ₹42,000 and remaining investments realised
120%.
(c) Shreya took over machinery at ₹60,000 for cash.
(d) Creditors amounting to ₹9600 were given furniture of the book value of ₹24,000 in full
settlement. Remaining creditors were paid at a discount of 10%.
(e) Remaining furniture was sold at 30% of the book value.

Prepare Realisation account, Partner’s capital account and Cash account.

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 14
38. Pass necessary Journal entries on the dissolution of a partnership firm in the following
cases:
(i) L, a partner, was appointed to look after the dissolution process for which he was given
remuneration of Rs10,000.
(ii) Dissolution expenses Rs8,000 were paid by the partner, M.
(iii) Dissolution expenses were Rs5,000.
(iv) P, a partner, was appointed to look after the process of dissolution for which he was
allowed a remuneration of Rs7,000. P agreed to bear the dissolution expenses. Actual
dissolution expenses Rs4,000 were paid by P.
(v) N, a partner, was appointed to look after the process of dissolution for which he was
allowed a remuneration of Rs9,000. N agreed to bear the dissolution expenses. Actual
dissolution expenses Rs4,000 were paid by the firm.
(vi) Q, a partner, was appointed to look after the process of dissolution for which he was
allowed a remuneration of Rs18,000. Q agreed to take over stock worth Rs18,000 as his
remuneration. The stock had already been transformed to Realisation Account.
[CBSE 2017]
39. Prateek, Neeraj and Umang were partners in a firm, sharing profits and losses in the
ratio of 7:2:1. The firm was dissolved on 31st March,2019. After transfer of assets (other
than cash) and external liabilities to the Realisation Account, the following transactions
took place:
(i) Furniture of Rs45,000 was sold by auction for Rs66,000 and the auctioneers’ commission
amounted to Rs2,000.
(ii) Office equipment of Rs90,000 was taken by creditors of the book value of Rs 82,000 in
full settlement.
(iii) Umang had given a loan of Rs1,09,000 to the firm. He accepted Rs1,00,000 in full
settlement of his loan.
(iv) Investments were Rs 53,000 out of which Rs23,000 was taken by Neeraj at Rs25,000.
Balance of the investments were sold for Rs35,000.
(v) Expenses incurred on dissolution were Rs21,000 and were paid by Prateek.
(vi) Loss on dissolution was Rs40,000. Pass the necessary Journal entries for the above
transaction in the books of the firm. [CBSE 2020]

40. Suman and Rajan were partners in a firm sharing profits and losses in the ratio of 3:1.
The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for the
following transactions after various assets (other than cash in hand and at bank) and the
third party liabilities have been transferred to Realisation Account.
(a) Dissolution expenses Rs10,000 were paid by the firm.
(b) Rajan had given a loan of Rs60,000 to the firm for which he accepted Rs58,000 in full
settlement.
(c) The firm had a debit balance of Rs40,000 in the Profit & Loss Account on the date of
dissolution.
(d) Profit on Realisation was Rs12,000. [CBSE 2020C]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 15
 41. Pradeep and Rajesh were partners in a firm sharing profits and losses in the ratio of 3:2.
The decided to dissolve their partnership firm on 31st March,2018. Pradeep was deputed to
realise the assets and to pay off the liabilities. He was paid Rs1,000 as commission for his
services. The financial position of the firm on 31st March, 2018 was as follows:
BALANCE SHEET as at 31st March,2018
Liabilities Rs Assets Rs
Creditors 80,000 Building 1,20,000
Mrs. Pradeep’s Loan 40,000 Investment 30,600
Rajesh’s Loan 24,000 Debtors 34,000
Investment Fluctuation Fund 8,000 Less: Provision for
Capital A/c’s Doubtful debts (4,000) 30,000
Pradeep 42,000 Bills Receivable 37,400
Rajesh 42,000 84,000 Bank 6,000
Profit & Loss A/c 8,000
Goodwill 4,000

2,36,000 2,36,000
Following terms and conditions were agreed upon:
(a)Pradeep agreed to pay his wife’s loan.
(b) Half of the debtors realized Rs12,000 and remaining debtors were used to pay 25% of
the creditors.
(c) Investments sold to Rajesh for Rs27,000
(d) Building realized Rs1,52,000
(e) Remaining creditors were to be paid after two months, they were paid immediately at
10% p.a. discount.
(f) Bills receivable were settled at a loss of Rs1,400.
(g) Realisation expenses amounted to Rs2,500. Prepare Realisation Account.
[CBSE SAMPLE PAPER 2018]
42. Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3:2.
On 31st March,2018 their Balance Sheet was as follows:
BALANCE SHEET as at 31st March, 2018
Liabilities Rs Assets Rs
Trade Creditors 42,000 Bank 35,000
Employees’ Provident Fund 60,000 Stock 24,000
Mrs. Ashish’s loan 9,000 Debtors 19,000
Kanav’s loan 35,000 Furniture 40,000
Workmen’s Compensation Fund 20,000 Plant 2,10,000
Investment Fluctuation Reserves 4,000 Investments 32,000
Capitals: Profit & Loss A/c 10,000
Ashish 1,20,000
Kanav 80,000 2,00,000

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 16
On the above date they decided to dissolve the firm.
(a)Ashish agreed to take over Furniture at Rs38,000 and pay Mrs. Ashish’s loan.
(b) Debtors realized Rs18,500 and plant realized 10% more.
(c) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was
sold at a gain of 10%.
(d) Trade Creditors took over investments in full settlement.
(e) Kanav agreed to take over the responsibility of completing dissolution at an agreed
remuneration of Rs12,000 and to bear realization expenses. Actual expenses of realization
amounted to Rs8,000. Prepare Realisation Account. [CBSE 2019]

43. Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve
the firm on 31st March,2023. Their Balance Sheet on the above date was:
Liabilities Rs Assets Rs
Capitals A/c: Building 80,000
Ashu 1,08,000 Machinery 70,000
Harish 54,000 1,62,000 Furniture 14,000
Creditors 88,000 Stock 20,000
Bank Overdraft 50,000 Investments 60,000
Debtors 48,000
Cash in hand 8,000

3,00,000 3,00,000
Ashu is to take over the Building at Rs95,000 and Machinery and Furniture is taken over by
Harish at value of Rs80,000. Ashu agreed to pay Creditor and Harish agreed to meet Bank
Overdraft. Stock and Investments are taken by both partner in profit sharing ratio. Debtors
realized for Rs 46,000 expenses of realization amounted to Rs3,000. Prepare necessary
Ledger Accounts. [NCERT]

44. Ashok, Babu and Chetan are in partnership sharing profits in the proportion 1/2 , 1/3,
1/6 respectively. They dissolve the partnership on 31st March, 2023 when the Balance Sheet
of the firm is as under:
Liabilities Rs Assets Rs
Sundry Creditors 20,000 Bank 7,500
Bills Payable 25,500 Sundry Debtors 58,000
Loan by Babu 30,000 Stock 39,500
Capital A/cs: Machinery 48,000
Ashok 70,000 Investments 42,000
Babu 55,000 Freehold Property 50,500
Chetan 27,000 1,52,000
Current A/cs:
Ashok 10,000
Babu 5,000
Chetan 3,000 18,000

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 17
The Machinery was taken by Babu for Rs45,000, Ashok took over the Investments and
Freehold Property was taken by Chetan at Rs55,000. The remaining assets realized as
follows:
Sundry Debtors Rs56,500 and Stock Rs36,500. Sundry Creditors were settled at a discount
of 7%. An Office computer, not shown in the books of accounts realized Rs9,000. Realisation
expenses amounted to Rs3,000.
Prepare Realisation Account, Partner’s Capital Account and Bank Account.

45. Rita and Sobha are partners in a firm, Fancy Garments Exports, sharing profits and losses
equally. On 1st April, 2023, the Balance Sheet of the firm was:
Liabilities Rs Assets Rs
Sundry Creditors 75,000 Cash 6,000
Bills Payable 30,000 Bank 30,000
Loan by Rital 25,000 Stock 75,000
General reserve 24,000 Book Debts 66,000
Capital A/cs: Less: Provision
Rita 90,000 For doubtful debts (6,000) 60,000
Sobha 30,000 1,20,000 Plant and Machinery 45,000
Land and Building 48,000
Loan to Sobha 10,000

2,74,000 2,74,000
The firm was dissolved on the date given above. The following transactions took place:
(a)Rita took 25% of the Stock at a discount of 20% in settlement of her loan.
(b) Book Debts realized Rs54,000
(c) Sundry Creditors were paid out at a discount of 10%. Bills Payable were paid in full.
(d) Land and Building realised Rs1,20,000
(e) Rita took the goodwill of the firm at a value of Rs30,000
(f) An unrecorded asset of Rs6,900 was given in settlement of unrecorded liability of Rs6,000
in full settlement.
(g) Realisation expenses were Rs5,250.
Show Realisation Account, Partners’ Capital Accounts and Bank Account in the books of the
firm.
46. Raina and Meena were partners in a firm which they dissolved on 31 st March,2023.
On this date, Balance Sheet of the firm, apart from realizable assets and outside liabilities
showed the following:
Rs
Raina’s Capital 40,000 (Cr.)
Meena’s Capital 20,000 (Dr.)
Profit & Loss A/c 10,000 (Dr.)
Raina’s loan to the firm 15,000
General Reserve 7,000
On the date of dissolution of the firm:
(a)Raina’s loan was repaid by the firm along with interest of Rs500

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 18
(b) Dissolution expenses of Rs1,000 were paid by the firm on behalf of Raina.
(c) An unrecorded asset of Rs2,000 was taken by Meena while Raina paid an unrecorded
liability of Rs3,000.
(d) Dissolution resulted in a loss of Rs60,000 from the realization of assets and settlement
of liabilities. You are required to prepare Partner’s Capital Accounts.

47. Ravi and Mukesh were partners in a firm sharing profits and losses equally. On 31 st
March,2019 their firm was dissolved. On the date of dissolution their Balance Sheet showed
stock of Rs60,000 and creditors of Rs70,000. After transferring stock and creditors to
Realisation Account the following transactions took place:
(a) Ravi took over 40% of total stock at 20% discount.
(b) 30% of total stock was taken over by the creditors of Rs20,000 in full settlement.
(c) Remaining stock was sold for cash at a profit of 25%.
(d) Remaining creditors were paid in cash at a discount of 10%.
Pass necessary Journal entries for the above transactions in the books of the firm.
[CBSE 2019]

48. Ravi, Shankar and Madhur were partners in a firm sharing profits in the ratio of 7:2:1.
On 31st March,2018, the firm was dissolved, after transferring Sundry Assets ( other than
cash in hand and cash at bank) and third party liabilities in the Realisation Account the
following transactions took place:
(i) Debtors amounting to Rs1,40,000 were handed over to a debt collection agency which
charged 5% commission. The remaining debtors were Rs47,000 out of which debtors of
Rs17,000 could not be recovered because the same became insolvent.
(ii) Creditors amounting to Rs5,000 were paid Rs3,500 in full settlement of their claim and
balance creditors were handed over stock of Rs90,000 in full settlement of their claim of
Rs95,000.
(iii) A bill receivable for Rs2,000 discounted with the bank was dishonoured by its acceptor
and the same hand to be met by the firm.
(iv) Profit on realization amounted to Rs6,000.
Pass necessary Journal entries for the above transations in the books of Ravi, Shankar and
Madhur. [CBSE 2019]

49. Give the necessary Journal entries for the following transactions in case of dissolution
of a partnership firm after various assets(other than cash and bank) and third party
Liabilities have been transferred to Realisation Account:
(i)Dissolution expenses Rs5,000 were paid by the firm.
(ii) An unrecorded computer not appearing in the books of accounts realized Rs2,200.
(iii) A creditor for Rs 1,40,000 accepted building valued at Rs1,80,000 and paid to the firm
Rs40,000.
(iv) Loss on Realisation Rs 10,000 was divided between the partners Subhi and Sudha in the
ratio of 4:1. [CBSE 2020C]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 19
50. Ankit, Bobby and Kartik were partners in a firm sharing profits in the ratio 4:3:3. The
firm was dissolved on 31st March,2018. Pass necessary Journal entries for the following
transactions after various assets (other than cash and bank) and third party liabilities had
been transferred to Realisation Account:
(i) The firm had stock of Rs 80,000. Ankit took over 50% of the stock at a discount of 20%
while the remaining stock was sold off at a profit of 30% on cost.
(ii) A liability under a suit for damages included in creditors were settled at Rs32,000 as
against only Rs13,000 provided in the books. Total creditors of the firm were Rs50,000.
(iii) Booby’s sister’s loan of Rs20,000 was paid off along with interest of Rs2,000.
(iv) Kartik’s loan of Rs 12,000 was settled at Rs 12,500. [CBSE 2019]

51. Niyati, Kartik and Ratik were partners in a firm sharing profits and losses in the ratio of
5:3:2. The firm was dissolved on 31st March,2019 by the order of the couret. After transfer
of assets (other than cash) and external liabilities to Realisation Account, the following
transactions took place:
(i) An unrecorded liability of the firm of Rs45,000 was paid by Niyati.
(ii) Creditors, to whom Rs67,000 were due to be paid, accepted furniture at Rs35,000 and
the balance was paid to them in cash.
(iii) Kartik had given a loan of Rs18,000 to the firm which was paid to him.
(iv) Stock worth Rs85,000 was taken over by Ratik at Rs72,000.
(v) Expenses on dissolution amounted to Rs6,000 and were paid by Kartik.
(vi) Loss on dissolution amounted to Rs40,000.
Pass the necessary Journal entries for the above transactions in the books of the firm.
[CBSE 2020]

EQUILIBRIUM CLASSES, BESIDE TIRUPATI BALAJI TEMPLE, RANI SATI MANDIR LANE, RATU ROAD,
RANCHI (JHARKHAND). CONTACT NO. 9840885790 pg. 20