in question number 27 of ts grewals dissolution of partnership firm, why arent the realisation expenses shown in the dr side of realisation a/c as by anjus capital ?

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Solution

When it is agreed that a partner (in this case- Anju) will bear the realisation expenses and for this he/she will be paid an agreed amount, then in the Realisation Account, the concerned partner's capital account (here Anju) is debited to Realisation Account with the amount of remuneration paid to him/her for realising the assets ( in this case 5% commission i.e Rs 7,825) irrespective of the actual expenses incurred (which are Rs 7,500).

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Is the loan by a partner transferred to Realisation Account at the time of dissolution of a partnership firm? Why?

Q. Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the 31st March, 2019 when the Balance Sheet of the firm as under:


Liabilities		Amount (₹)	Assets	Amount (₹)
Sundry Creditors		20,000	Bank	7,500
Bills Payable		25,500	Sundry Debtors	58,000
Babu's Loan		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


		2,45,500		2,45,500

The Machinery was taken over by Babu for ₹ 45,000, Ashok took over the Investments for ₹ 40,000 and Freehold property took over by Chetan at ₹ 55,000. The remaining Assets realised as follows:
Sundry Debtors ₹ 56,500 and Stock ₹ 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of accounts realised ₹ 9,000. Realisation expenses amounted to ₹ 3,000.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.

Pass journal entries for the following transactions :

(i) Dissolution expenses amounted to Rs. 20,000. Rs. 8,000 were to be borne by the firm and the balance by Maruti, a partner. The expenses were paid by Maruti.

(ii) Sudhir, a partner, was allowed a remuneration of Rs. 10,000 to carry out dissolution of the firm. He was to bear all expenses of realisation which amounted to Rs. 16,000 were paid by the firm.

(iii) Ravi, a partner, is allowed a remuneration of Rs. 15,000 for dissolution work and is to bear all expenses of realisation which amounted to Rs 5,000 were paid by the firm.

(iv) Anil, a partner, is paid remuneration of Rs. 20,000 for dissolution work. Realisation expenses amounted to Rs. 7,500 were paid by the firm.

(v) Vijay, a partner, paid realisation expenses of Rs 10,000 and these were to be borne by him.

Realisation expenses to be borne by Rashim for which he will be paid Rs. 70,000 as remuneration for completing the dissolution process. The actual expenses incurred by Rashim were 1,20,000. How will you deal with realisation expenses of the firm of Rashim and Bindiya-

A, B and C were partners in a firm sharing profits in the ratio of 4 : 3 : 3. On 01-04-2015, they decided to dissolve the firm. On that date A's capital was Rs. 1,25,000, B's capital was Rs. 45,000 and C's capital was Rs. 15,000 (Dr.). The creditors amounted to Rs. 23,150 and cash in hand was Rs. 3,920. The assets realised Rs. 1,44,910 and the expenses of dissolution were Rs. 1,860. Prepare realisation account and show your workings clearly.

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