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Dissolution of a Partnership Firm – Chapter 7
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A, B and C were equal partners. On 31st March, 2026, their Balance Sheet stood as:
| Liabilities | ₹ | ₹ | Assets | ₹ |
|---|---|---|---|---|
| Sundry Creditors | 50,400 | Cash | 3,700 | |
| General Reserve | 12,000 | Stock | 20,100 | |
| Capital A/cs: | Sundry Debtors | 62,600 | ||
| A | 40,000 | Loan to A | 10,000 | |
| B | 25,000 | Investments | 16,000 | |
| C | 15,000 | 80,000 | Furniture | 6,500 |
| Building | 23,500 | |||
| 1,42,400 | 1,42,400 |
The firm was dissolved on the above date on the following terms:
- (a) For the purpose of dissolution, Investments were valued at ₹ 18,000 and A took over the Investments at this value.
- (b) Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
- (c) Expenses of realisation paid were ₹ 1,300.
- (d) Creditors allowed discount of ₹ 800.
- (e) A post-dated cheque for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and was unable to pay and hence the firm paid the bank.
Prepare Realisation Account, Partners’ Capital Accounts and Cash Account showing how the accounts would finally be settled among the partners.
[Ans.: Loss on Realisation—₹ 3,000; Cash paid to A, B and C—₹ 15,000; ₹ 28,000;
₹ 18,000 respectively. Total of Cash Account—₹ 1,13,400.]
₹ 18,000 respectively. Total of Cash Account—₹ 1,13,400.]
Solution:
This topic was modified 2 months ago by Wings Unschool Admin
Posted : 24/07/2026 9:41 am