DK Goel Solutions Chapter 6 Dissolution of Partnership Firm

1. DK Goel Solutions Chapter 6 Dissolution of Partnership Firm DK Goel Solutions Chapter 6 Dissolution of Partnership Firm, which is laid out by master Accountancy instructors from the most recent form of DK Goel Class 12 Accountancy books. We, at Dk Goel Solutions help students to fathom every one of the hypotheses, specifically. There are various ideas in Accountancy, however the ideas of Trial Balance, Depreciation and Bank Reconciliation Statement (BRS) are required. DK Goel Solutions Class 12 – Chapter 6 Short Answer Questions Q1. Write the circumstances under which a firm is dissolved. Solution 1 The conditions in which a corporation is dissolved are below:— 1.) Where an unsound spirit has become a companion. 2.) responsibilities as a partner, rather than the partner filing a suit. Where a partner has been permanently unaware of fulfilling his 3.) Where a partner is accused of wrongdoing that may damage the relationship, rather than the partner bringing a suit. 4.) When a partner, rather than the partner filing a suit, commits a violation of the relationship arrangement will fully or persistently. 5.) If a partner has passed all of his rights in the business to a third party, rather than the partner filing a suit. Q2. Clarify the difference between dissolution of a firm and dissolution of partnership.

2. Solution 2 Q3. What is a Realisation Account? Solution 3 To dispose of all the company’s properties and make payments to all the creditors, a ‘Realisation Account’ is opened. The account realization is a nominal account and the intent of such an account is to assess the benefit or loss on the asset realization and the payment of liabilities. Q4. Mention the order in which the proceeds from the sale of Assets are utilised at the time of dissolution of partnership firm. Solution 4 The sum recognized by the selling of the company’s properties shall be spent in the following manner and order: 1.) Second of all, the company’s external debts would be paid for. 2.) The loans advanced by partners will be paid off out of the remaining sum. 3.) The balance of the Spouses’ Capital Account will be restored afterwards. 4.) If any amount exists, in their benefit share ratio it will be split among the partners. Q5. How will you deal with the Realisation expenses at the time of dissolution of a firm?

3. Solution 5 (i) When expenses are paid by the firm: (Realisation expenses paid on behalf of the partner) (v) No entry will be passed if the expenses are to be borne and paid by the partner out of his pocket. Q6. Explain the accounting treatment at the time of dissolution of a partnership firm of the assets and liabilities not already recorded in the books of the firm. Solution 6 (i) When assets are sold for cash:

4. (iii) If an asset is given away to a Creditor in part or full payment of his dues, the agreed amount of the asset is deducted from the claim of the creditor and the balance is paid to him. No entry is passed for the transfer of assets to the creditor. Q7. What accounting record is made on dissolution of partnership firm? Solution 7 The following accounts are opened in the order to dissolution of partnership firm:- 1.) Realisation Account 2.) Partner’s Loan Account 3.) Partner’s Capital Account 4.) Cash or Bank Account Practical Questions Q1. Manoj and Nand were partners sharing Gains in the ratio of 3 : 2. Pass journal entries under following situations at the time of dissolution of firm: (i) Workmen Compensation Reserve stood at Rs.1,00,000 and there was no liability towards Workmen Compensation. (ii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it was ascertained at Rs. 75,000. (iii) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it was ascertained at Rs. 1,20,000. (iv) Workmen Compensation Reserve stood at Rs. 1,00,000 and liability in respect of it was ascertained at Rs. 1,00,000. Solution 1

5. Points for Students:-

6. Dissolution of partnership means termination of the old partnership agreement and a reconstruction of the firm due to admission, retirement and death of a partner. Dissolution of partnership may or may result into closing down of the business as the remaining partners may agree to carry on the business under a new agreement. Q2. (i) Expenses of realization Rs. 8,000. (ii) Expenses of realisation Rs. 10,000 were paid by a partner. (iii) Realisation expenses of Rs. 12,000 were to be met by Tushar, a partner, but were paid by the firm. (iv) Suresh, a partner, was paid remuneration of Rs. 10,000 and he was to meet all expenses. (v) Viru, a partner, was paid remuneration of Rs. 15,000 and he was to meet all expenses. Actual Expenses amounted to Rs. 20,000 which were paid by the firm. (vi) Realisation expenses amounting to Rs. 15,000 were paid by the firm, Rs. 10,000 were to be borne by a partner and the balance by the firm. (vii) Gauri, a partner, was allowed a remuneration of Rs. 25,000 and he was to meet all expenses. Firm paid an expense of Rs. 5,000. Solution 2

7. Points for Students:- If a partner has given any loan to the firm, his loan will be paid off after all the outside liabilities are paid in full. Therefore, Partner’s loan account is not transferred to the realisation account and his loan account is prepare separately and paid off by passing the following entry: Journal Entry:-

8. Partner’s Loan A/c Dr. To Cash/Bank A/c (Paid Partners loan Q3. Pass necessary Journal Entries on the dissolution of a partnership firm in the following cases: (i) L, a partner, was appointed to look after the dissolution process for which he was given a remuneration of Rs. 10,000. (ii) Dissolution expenses Rs. 8,000 were paid by the partner, M. (iii) Dissolution expenses were Rs. 5,000. (iv) P, a partner, was appointed to look after the process of dissolution for which he was allowed a remuneration of Rs. 7,000. P agreed to bear the dissolution expenses. Actual dissolution expenses Rs. 4,000 were paid by P. (v) N, a partner, was appointed to look after the process of dissolution for which he was allowed a remuneration of Rs. 9,000. N agreed to bear the dissolution expenses. Actual dissolution expenses Rs. 4,000 were paid by the firm. (vi) Q a partner was appointed to look after the process of dissolution for which he was allowed a remuneration of Rs. 18,000. Q agreed to take over stock worth Rs. 18,000 as his Remuneration The stock had already been transferred to Realisation Account. Solution 3

9. Point for Students:- If Cash balance and Bank balance both are given in the balance sheet, only one account, either cash account or a Bank account is prepared. If cash account is prepared, an entry is passed for withdrawing the Bank balance and if a Bank account is prepare the cash balance is deposited into the bank.

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