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Test – Dissolution of a Partnership Firm (Set – A)
1. On the day of dissolution of the firm 'Roop Brothers' had partner's capital amounting to ₹1,50,000, external liabilities
₹35,000, Cash balance ₹8,000 and P & L A/c (Dr.) ₹7,000. If Realisation expense and loss on Realisation amounted to
₹5,000 and ₹25,000 respectively, the amount realised by sale of assets is:
(a) ₹1,64,000 (b) ₹1,45,000 (c) ₹1,57,000 (d) ₹1,50,000 (1)
2. An unrecorded asset of ₹55,000 was given to an unrecorded creditor of ₹50,000 in settlement of his claim of ₹40,000 and
the balance was paid to him after deducting 10% discount. Realisation A/c will be
(A) Debited by ₹50,000 (B) Debited by ₹9,000
(C) Credited by ₹ 1,000 (D) Credited by ₹9,000 (1)
3. Computer of book value of ₹60,000 and Patents of the book value of ₹20,000 have been transferred to Realisation A/c. If
nothing is mentioned about the realisation of these assets, they will be realised at :
(A) Nil (B) ₹60,000 (C) ₹80,000 (D ) ₹20,000 (1)
4. On dissolution, Partner's Loan was appearing on the liabilities side at ₹60,000. He accepted an unrecorded asset of
₹50,000 at ₹45,000 and the balance was paid to him in cash. Realisation Account will be :
(A) Debited by ₹15,000 (B) Debited by ₹45,000
(C) Credited by ₹45,000 (D) Credited by ₹15,000 (1)
5. In which condition a partnership firm is deemed to be dissolved?
(A) On insolvency of a partner (B) On the death of a partner
(C) On expiry of the period of partnership (D) On loss in partnership
(1)
6. On dissolution of a firm, debtors were ₹1,00,000. Of these ₹10,000 became bad and the rest realised 60%. Which account
will be debited and by how much amount?
(A) Realisation Account by ₹50,000 (B) Realisation Account by ₹36,000
(C) Bank Account by ₹54,000 (D) Realisation Account by ₹54,000 (1)
7. P, Q and R were partners in a firm sharing profits in the ratio of 7:2:1. On 31st March, 2021, the firm was dissolved, after
transferring sundry assets (other than cash in hand and cash at bank) and third party liabilities in the realisation account,
the following transactions took place :
(i) Debtors amounting to ₹1,20,000 were handed over to a debt collection agency which charged 5% commission. The
remaining debtors were ₹27,000, out of which debtors of ₹17,000 could not be recovered because the same became
insolvent.
(ii) Creditors amounting to ₹7,000 were paid ₹5,500 in full settlement of their claim and balance creditors were handed
over stock of ₹70,000 in full settlement of their claim of ₹80,000.
(iii) A bills receivable ₹2,000 discounted with the bank was dishonoured by its acceptor and the same had to be met by the
firm. Pass necessary journal entries for the above transactions in the books of P, Q and R. (3)
8. The firm of R, K and S was dissolved on 31.3.2019. Pass necessary journal entries for the following after various assets
(other than Cash and Bank) and the third party liabilities had been transferred to realisation account.
(i) K agreed to pay off his wife's loan of ₹6,000.
(ii) 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%.
(iii) A machine that was not recorded in the books was taken over by K at ₹3,000 whereas its expected value was ₹5,000.
(iv) The firm had a debit balance of ₹15,000 in the profit and loss A/c on the date of dissolution. (4)
ACCOUNTS BY VIJAY GOYAL, DSS-130, SEC-11, PKL & SCO-286, SEC-20, PKL, 9041672311, 8556888389
9. X Y and Z were partners sharing profits in the ratio of : Following was their Balance Sheet as at 31st March, 2021 :
Liabilities Amt. (₹) Assets Amt. (₹)
Creditors 1,50,000 Fixed Assets 9,00,000
Workmen Compensation Reserve 40,000 Debtors 2,80,000
Bank Loan 40,000 Investments 30,000
X's Loan 50,000 Stock 1,40,000
Capitals: Patents 10,000
X 6,00,000 Advertisement Suspense A/c 20,000
Y 4,50,000 Prepaid Expenses 12,100
Z 1,00,000 11,50,000 Cash 37,900
14,30,000 14,30,000
The firm was dissolved on the above date :
(i) Fixed Assets were realised at 120% and ₹50,000 of the debtors proved bad.
(ii) Creditors agreed to take stock in full settlement of their dues.
(iii) X accepted investments in full settlement of his loan.
(iv) Bank loan is paid off together with interest @ 9% p.a for three months.
(v) An unrecorded investment was sold for ₹16,000.
(vi) Compensation to Workmen paid by the firm amounted to ₹24,000.
(i) X was allowed a remuneration of ₹25,000 and the expenses of realisation were to be borne by him. Firm paid
realisation expenses of ₹10,000. Prepare Realisation A/c. (6)
10. 𝐴, 𝐵 and 𝐶 were partners in a firm sharing profits in the ratio of 1 2 3. On 31.07.2020 the firm was dissolved. From the
information given below complete Realisation Account, Capital Accounts and Bank Account: (6)
REALISATION ACCOUNT
Liabilities Amt. (₹) Assets Amt. (₹)
To Sundry Assets : By Sundry Liabilities :
Debtors 1,82,000 Prov. for Bad Debts 6,000
Stock 50,000 Creditors 75,000 81,000
Computer 40,000 By Bank (Assets realised) 3,63,000
Land & Building 5,10,000 7,82,000 By A's Capital (Computer taken) --
To Bank (Payment of Creditors) -- By C's Capital (Stock taken) --
To C's Capital A/c By Loss transferred to :
(Realisation Expenses) -- A's Capital A/c --
B's Capital A/c --
C's Capital A/c 45,000 --
-- --
CAPITAL ACCOUNTS
Particulars A B C Particulars A B C
₹ ₹ ₹ ₹ ₹ ₹
To Realisation A/c By -- 1,80,000 4,10,000
(Computer taken) 15,000 By General Reserve -- 10,000 --
To Realisation A/c (Stock By Realisation A/c
taken) -- (Exp. paid) --
To Realisation A/c (Loss)
To Bank A/c -- -- --
-- -- --
-- -- -- 1,25,000 -- 4,40,000
BANK ACCOUNT
Particulars Amt. (₹) Particulars Amt. (₹)
To -- By Realisation A/c
To -- (Payment of Creditors) 70,000
By --
By --
By --
-- --
ACCOUNTS BY VIJAY GOYAL, DSS-130, SEC-11, PKL & SCO-286, SEC-20, PKL, 9041672311, 8556888389
ACCOUNTS BY VIJAY GOYAL, DSS-130, SEC-11, PKL & SCO-286, SEC-20, PKL, 9041672311, 8556888389
