Pass necessary Journal entries for the following transactions on the dissolution of the firm P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:
(a) Bank Loan ₹ 12,000 was paid.
(b) Stock worth ₹ 16,000 was taken over by 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 of realisation ₹ 2,000 were paid by partner Q.
(f) Profit on realisation ₹ 36,000 was distributed between P and Q in 5 : 4 ratio.

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Solution

Journal

S.N.

Particulars

L.F.

Debits

Amount

Rs

Credit

Amount

Rs

(a)

Realisation A/c

Dr.

12,000

To Bank A/c

12,000

(Bank loan paid at the time of dissolution)

(b)

Q’s Capital A/c

Dr.

16,000

To Realisation A/c

16,000

(Stock taken over by Q)

(c)

Realisation A/c

Dr.

4,000

To P’s Capital A/c

4,000

(Creditors paid by P)

(d)

Bank A/c

Dr.

1,200

To Realisation A/c

1,200

(Unrecorded assets realised)

(e)

Realisation A/c

Dr.

2,000

To Q’s Capital A/c

2,000

(Realisation expenses paid by Q)

(f)

Realisation A/c

Dr.

36,000

To P’s Capital A/c

20,000

To Q’s Capital A/c

16,000

(Realisation Profit distributed )

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Q. Pass necessary Journal entries for the following transaction on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to realisation Account
(a) Bank loan worth Rs. 12,000 was paid.
(b) Stock worth Rs. 16,000 was taken over by partner Q.
(c) Partner P paid a creditor Rs. 4,000.
(d) An asset not appearing in the books of accounts realised Rs. 1,200.
(e) Expenses of realisation Rs. 2,000 were paid by partner Q.
(f) Profit on realisation Rs. 36,000 was distributed between P and Q in Rs. 5:4 ratio.

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account.

(i) Bank loan Rs 12,000 was paid.

(ii) Stock worth Rs 16,000 was taken over by partners.

(iii) Partner P paid a creditor Rs 4,000.

(iv) An asset not appearing in the books of accounts realised Rs 1,200.

(v) Expenses of realisation Rs 2,000 were paid by partner Q.

(iv) Profit on realisation Rs 36,000 was distributed between P and Q in 5 : 4 ratio.

Q. 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 (other than Cash and Bank) and the third party liability have been transferred to Realisation Account:
(a) Kunal agreed to pay off his wife's loan of ₹ 6,000.
(b) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹ 10,000 were given a piece of furniture costing ₹ 8,000 in full and final settlement. Remaining Creditors allowed a discount of 10%.
(c) Rohit had given a loan of ₹ 70,000 to the firm which was duly paid.
(d) A machine which was not recorded in the books was taken over by Kunal at ₹ 3,000, whereas its expected value was ₹ 5,000.
(e) The firm had a debit balance of ₹ 15,000 in the Profit and Loss Account on the date of dissolution.
(f) Sarthak paid the realisation expenses of ₹ 16,000 out of his private funds, who was to get a remuneration of ₹ 15,000 for completing dissolution process and was responsible to bear all the realisation expenses.

Q. P, Q and R were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They agreed to dissolve their partnership firm on 31st March, 2019. P was deputed to realise the assets and pay the liabilities. He was paid ₹ 1,000 as commission for his services. The financial position of the firm was:

	Balance Sheet as at 31st March, 2019
Liabilities			Amount (₹)	Assets		Amount (₹)
Creditors			10,000	Stock		5,500
Bills Payable			3,700	Investments		15,000
Investments Fluctuation Reserve			4,500	Debtors	7,100
Capital A/cs:				Less: Provision for Doubtful Debtors	450	6,650
P		37,550		Cash		5,600
Q		15,000	52,550	R's Capital A/c		8,000
				Plant and Machinery		30,000

			70,750			70,750

P took over Investments for ₹ 12,500. Stock and Debtors realised ₹ 11,500. Plant and Machinery were sold to Q for ₹ 22,500 for cash. Unrecorded assets realised ₹ 1,500. Realisation expenses paid amounted to ₹ 900.
Prepare necessary Ledger Accounts to close the books of the firm.

Q. Pass Journal entries for the following:
(a) Realisation expenses amounted to ₹ 10,000 were paid by the firm on behalf of Alok, a partner, with whom it was agreed at ₹ 7,500.
(b) Realisation expenses amounted to ₹ 5,000. It was agreed that the firm will pay ₹ 2,000 and balance by Ravinder, a partner.
(c) Dissolution expenses amounted to ₹ 10,000 were paid by Amit, a partner, on behalf of the firm.

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	Journal
S.N.	Particulars		L.F.	Debits Amount Rs	Credit Amount Rs
(a)	Realisation A/c	Dr.		12,000
	To Bank A/c				12,000
	(Bank loan paid at the time of dissolution)

(b)	Q’s Capital A/c	Dr.		16,000
	To Realisation A/c				16,000
	(Stock taken over by Q)

(c)	Realisation A/c	Dr.		4,000
	To P’s Capital A/c				4,000
	(Creditors paid by P)

(d)	Bank A/c	Dr.		1,200
	To Realisation A/c				1,200
	(Unrecorded assets realised)

(e)	Realisation A/c	Dr.		2,000
	To Q’s Capital A/c				2,000
	(Realisation expenses paid by Q)

(f)	Realisation A/c	Dr.		36,000
	To P’s Capital A/c				20,000
	To Q’s Capital A/c				16,000
	(Realisation Profit distributed )