[CBSE] Q 21 DK Goel Dissolution of a Partnership Firm Solutions Class 12 (2024-25)

Solution of Question number 21 of Dissolution of a Partnership Firm chapter 5 of DK Goel Class 12 CBSE (2024-25)

Q. 21 (A). X, Y and Z were in partnership sharing profits and losses in the ratio of 7 : 2 : 1 and the Balance Sheet of the firm stood on 31st March, 2024, as under:-

Liabilities	₹	Assets	₹
Creditors	3,142	Cash in Hand	244
Provision for Depreciation on Machinery	4,000	Debtors	1,746
Capital Accounts: X Y Z	3,582 2,720 16,124	Stock	3,498
		100 Shares in B Co. Ltd 60 Shares in C Co. Ltd.	2,000 480
		Patents	7,600
		Machinery	6,000
		Buildings	5,000
		Goodwill	3,000
	29,568		29,568

On 31st March, 2024, it was decided to dissolve the firm on the following terms:

(i) X is to take over the buildings at ₹ 7,300.

(ii) Y, who will continue with business, to take over Goodwill, Stock and Debtors at book values, Patents at ₹ 6,500 and Machinery at ₹ 1,500. He also agreed to pay the creditors.

(iii) Z agreed to take the shares in C Co. Ltd at ₹ 5 each.

(iv) The shares in B Co. Ltd. to be divided in profit sharing ratio.

Show the ledger accounts to record the dissolution.

[Ans. Gain on realisation ₹ 520; Cash brought in by X ₹ 4,754 and Y ₹ 10,678; Final Payment to Z ₹ 15,676: Total of Cash A/c ₹ 15,676.]

Solution:-

Q. 21 (B). Following is the balance sheet of P, Q and R who were sharing profits and losses in the ratio of 3 : 2 : 1.

Liabilities	₹	Assets	₹
Bank Overdraft	12,000	Debtors 20,000 Less: Provision 1,200	18,800
Creditors	70,000	Stock	40,000
Mrs. P’s Loan	25,800	3,000 Shares in ‘A’ Ltd.	30,000
Capital Accounts: P Q R	1,20,000 95,000 5,000	Motor Car	75,000
		Plant	80,000
		Advertisement Suspense A/c	84,000
	3,27,800		3,27,800

The firm was dissolved on that date and the following arrangements were made:

(i) Assets realised as follows: Debtors ₹ 15,000; Plant and 30% discount.

(ii) Stock was valued at ₹ 36,000 and this was taken over by P and Q equally.

(iii) Market value of the shares of A Ltd. is ₹ 16 per share. Half the shares were sold in the market and the balance half were taken over by P and Q in their profit sharing ratio.

(iv) A creditor for ₹ 50,000 took over Motor Car in full settlement of his claim and the balance of creditors were paid at a discount of 2%.

(v) Expenses of realisation amounted to ₹ 6,000. P agreed to discharge his wife’s Loan.

Prepare Journal entries and Ledger accounts.

[Ans. Loss on Realisation ₹ 44,400. R brings in ₹ 16,400; Final Payment to P ₹ 49,200 and Q ₹ 24,600. Total of Bank A/c ₹ 1,11,400.]

Solution:-

Note:

Bank Overdraft is short-term borrowing. It will be first transferred to the Cr. of Realisation A/c and then paid off.