Accountancy Page No: 1
Maximum Marks: 20 Class XII Time Allowed:45 Min
Q.1 L and M were partners in a firm sharing profit in the ratio of 2:3. On 28-2-2016 firm
was dissolved. After transferring assets (other than cash) and outsiders liabilities to
realization accounts you are given the following information :
a) A creditor for Rs.1,40,000 accepted building valued at Rs.1,80,000 and paid to the
firm Rs.40,000.
b) A second creditor for Rs.30,000 accepted machinery valued at Rs.28,000 in full
settlement of his claim.
c) A third creditor amounting to Rs.70,000 accepted Rs.30,000 in cash and investment
of the book value of Rs.45,000 in full settlement of his claim.
d) Loss on dissolution was Rs.4,000.
Pass necessary journal entries for the above transaction in the books of the firm
assuming that all payments were made by cheque. [4]
Q.2 Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into
partnership firm last year only, through a verbal agreement. They contributed Capitals in
the firm and to meet other financial requirements, few partners also provided loan to the
firm. Within a year, their conflicts arisen due to certain disagreements and they decided
to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal
consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had
transferred various assets and external liabilities to Realisation A/c. Due to her busy
schedule; Ms. Kavya has delegated this assignment to you, being an intern in her firm. On
the date of dissolution, you have observed the following transactions:
(i) Dhwani’s Loan of 50,000 to the firm was settled by paying 42,000.
(ii) Paavni’s Loan of 40,000 was settled by giving an unrecorded asset of 45,000.
(iii) Loan to Charu of 60,000 was settled by payment to Charu’s brother loan of the same
amount.
(iv) Iknoor’s Loan of 80,000 to the firm and she took over Machinery of 60,000 as part
payment.
You are required to pass necessary entries for all the above mentioned transactions. [4]
Q.3 Pass the 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 realization account:
a) Bank loan 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 assets not appearing in the books of accounts realized rs.1,200.
e) Expenses of realization Rs.2,000 were paid by partner Q.
f) Profit on realization Rs.36,000 was distributed between P and Q in 5:4 ratio. [6]
Q.4 Prashant and Rajesh were partners in a firm sharing profit in the ratio of 3:2. In spite
Achievers point (Accounts & Business Classes for XI, XII, B.com, CA, CMA & CS) Mob No: 9759656820
Accountancy Page No: 2
of repeated reminders by the authorities, they kept dumping hazardous material into a
nearby river. The court ordered for the dissolution of their partnership firm on 31 st march
2012. Prashant was deputed to realize the assets and to pay the liabilities. He was paid
Rs.1,000 as commission for his services. The financial position of the firm on 31 st march
2012 was as follows:
Balance Sheet
Liabilities Amount Assets Amount
Creditors 80,000 Building 1,20,000
Mrs. prashant’s loan 40,000 Investment 30,600
Rajesh’s Loan 24,000 Debtors 34,000
Investment fluctuation fund 8,000 Less: provision 4,000 30,000
Capital: Bill receivable 37,400
Prashant 42,000 Cash 6,000
Rajesh 42,000 84,000 Profit and loss A/c 8,000
Goodwill 4,000
2,36,000 2,36,000
Following was agreed upon :
1) Prashant agreed to pay off his wife’s loan.
2) Debtors realized Rs.24,000.
3) Rajesh took away all investment at rs.27,000.
4) Building realized Rs.1,52,000.
5) Creditors were payable after 2 months. They were paid immediately at 10%
discount.
6) Bill receivable were settled at a loss of Rs.1,400.
7) Realization expenses amounted to Rs.2,500.
You are required to pass necessary entries for all the above mentioned transactions. [6]
Achievers point (Accounts & Business Classes for XI, XII, B.com, CA, CMA & CS) Mob No: 9759656820
