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Dissolution of a Partnership Firm – Chapter 7
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Arnab, Ragini and Dhrupad are partners sharing profits in the ratio of 3 : 1 : 1. Last year, conflicts arose due to certain issues of disagreements and on 31st March, 2026, they decided to dissolve the firm. On that date their Balance Sheet was as under:
BALANCE SHEET OF ARNAB, RAGINI AND DHRUPAD as at 31st March, 2026
| Liabilities | ₹ | ₹ | Assets | ₹ | ₹ |
|---|---|---|---|---|---|
| Sundry Creditors | 60,000 | Bank | 50,000 | ||
| Arnab’s Brother’s Loan | 95,000 | Sundry Debtors | 1,70,000 | ||
| Dhrupad’s Loan | 1,00,000 | Less: Provision for Doubtful Debts | 20,000 | 1,50,000 | |
| Investment Fluctuation Reserve | 50,000 | Stock | 1,50,000 | ||
| Capital A/cs: | Investments | 2,50,000 | |||
| Arnab | 2,75,000 | Building | 3,00,000 | ||
| Ragini | 2,00,000 | Profit & Loss Account | 50,000 | ||
| Dhrupad | 1,70,000 | 6,45,000 | |||
| 9,50,000 | 9,50,000 |
The assets were realised and the liabilities were paid as under:
- (i) Arnab agreed to pay his brother’s loan.
- (ii) Investments realised 20% less.
- (iii) Creditors were paid at 10% less.
- (iv) Building was auctioned for ₹ 3,55,000. Commission on auction was ₹ 5,000.
- (v) 50% of the stock was taken over by Ragini at market price which was 20% less than the book value and the remaining was sold at market price.
- (vi) Dissolution expenses were ₹ 8,000. ₹ 3,000 were to be borne by the firm and the balance by Dhrupad. The expenses were paid by him.
Prepare Realisation Account and Partners’ Capital Accounts.
[Ans.: Gain (Profit) on Realisation—₹ 43,000; Final Payments: Arnab—₹ 3,65,800;
Ragini—₹ 1,38,600 and Dhrupad—₹ 1,71,600.]
Ragini—₹ 1,38,600 and Dhrupad—₹ 1,71,600.]
Solution:
This topic was modified 2 months ago by Wings Unschool Admin
Posted : 23/07/2026 8:51 am