SUCCESS COACHING ACADEMY
CLASS 12th
Subject – Accountancy.
Marks - 30
Q1. What journal entries would be passed for the following transactions on the
dissolution of a firm, after various assets (other than cash) and third party liabilities have
been transferred to Realization account.
(i) Bank loan Rs.12,000 is paid.
(ii) Stock worth Rs.6,000 is taken over by partner B
(iii) A Computer completely written off in the books of accounts was sold for Rs.200.
(iv) Loss on realisation Rs.14,000 was to be distributed between A and B in the ratio 5:2.
(v) An unrecorded asset taken over by Partner A worth Rs 4,000.
(vi) Creditors of Rs.30,000 are discharged by paying Rs.27,000.
(vii) Profit on realisation amounting Rs.6,000 is to be distributed between the partners A
and B In the ratio 7:5.
(viii) There was a joint life policy for Rs. 60,000. The policy was surrendered for
Rs.15,000.
(ix) Total creditors in the books Rs.40,000. Office equipment was accepted by a creditor
for Rs.7,000 in full settlement and remaining creditors were paid in full by cheque.
(x) During the course of realization a liability under action for damages was settled at
Rs.12,000 against Rs.10,000 included in creditors. Total Creditors Rs.20,000.
(xi) Investment worth Rs.10,000 taken over by partner A against his loan in full
settlement.
(xii) Partner B had taken a loan from insurers for Rs.5,000 on the security of the joint life
policy. The policy was surrendered and insurers paid a sum of Rs.6,200 after deducting
Rs.5000 for B’s loan and Rs.300 interest thereon.
(xiii) Partner A promised to pay off Mrs.A’s loan of Rs.9,000.
(xiv) Out of the total Creditors Rs.40,000, one of the creditors agreed to accept Debtors
amounting Rs.20,000 at Rs.17,900 and balance paid in cheque.
(xv) Partner A’s loan Rs.3,000 paid in cash.
(xvi) Mrs A’ s loan Rs.5,000 paid in cheque.
(xvii) Furniture worth Rs.15,000 taken over by Creditors.
(xviii) Realization Expenses Amounted to Rs. 10,000.
(xix) Realization Expenses amounted to Rs.5,000 were paid by a Partner.
(xx) Realization Expenses amounted to Rs.5,000 were paid by the firm on behalf of a
Partner.
(xxi) A Partner was paid remuneration (including expenses) of Rs.7,500 to carryout
dissolution of the firm. Actual Expenses were Rs.10,000.
(xxii) Dissolution expenses wereRs.8,000, out of the said expenses, Rs.3,000 were to be
borne by the firm and the balance by a Partner. Rs.8,000 are paid by the firm.
(xxiii) Dissolution expenses wereRs.8,000. Rs.3,000 were to be borne by the firm and the
balance by a Partner.The expenses were paid by a Partner.
(xxiv) Realization Expenses amounted to Rs.5,000 were to be borne and paid by a
partner.
(xxv) X, the Partner, is paid remuneration of Rs.5,000 for dissolution of the firm.
Realization expenses of Rs.8,000 are met by the firm
(xxvi) Realization Expenses of Rs.5,000 were to be borne by X, a partner. However it was
paid by Y.
Q2. Following transactions took place at the time of dissolution:
Realisation expenses were to be fully borne by A for which he is to get a credit of Rs
10,000. Actual realization .Expenses paid out of firm’s Bank Account amounted to Rs
12,000.
A. B took over Stock for Rs 55,000 and C took over Buildings for Rs 4,00,000.
B. Other assets realized as follows :
Debtors Rs 48,000; Furniture Rs 17,000, and Machinery Rs 80,000.
Patents didn’t realize anything and Trade Creditors were settled in full by paying
them Rs 55,000.
C. Accounts of Partners were settled after realizing assets and paying outside
liabilities. Prepare Realization A/c,
Partners’ Capital A/c’s and Bank A/c.
