DISSOLUTION OF PARTNERSHIP FIRM

REVISION WORKSHEET- PRACTICE OF “HOTS”

Q. Journalise in each of the following cases:

• An old typewriter which was not recorded in the books was sold for rupees 7000
whereas it's expected value was rupees 9000
Cash a/c…dr 7000
To realization a/c 7000
• A debtor whose debt of rupees 9000 was written off in the books , paid rupees 7000 in
full settlement
Cash a/c…dr 7000
To realization a/c 7000
• There was an unrecorded asset of rupees 20000 which was taken over by Ramesh, a
creditor at rupees 15000
No entry
• 1000 shares of a company acquired at a cost of rupees 25000 had been written off from
the books. These were valued at rupees 15 per share and were taken over by Rakesh, a
partner
Rakesh capital a/c 15000
To realization a/c 15000
• Firm had unrecorded investments (nominal value rupees 20000). 70% of investments
were sold at a loss of 20% and remaining were taken over by B, a partner at 90%.
Cash a/c…dr 11200
B’s cap a/c 5400
To realization a/c
• A contingent liability, not provided for, of rupees 4000 was also discharged.
Realisation a/c 4000
To cash a/c

• A bill receivable for rupees 4000 under discount was dishonoured as the acceptor had
become insolvent and was unable to pay anything and hence the bill had to be met by
the firm.

Realization a/c 4000

To bank a/c
• A contingent liability for a bill discounted at rupees 10000 was settled by, a partner.
 Realization 10000
To partners cap a/c

• Firm had an unrecorded asset which was valued at rupees 5000 which was accepted by
creditors of rupees 7000 in full settlement of their claims

No entry
• Firm had an unrecorded furniture of rupees 20000 and an unrecorded liability of rupees
12000. 60% of such furniture was given to settle the unrecorded liability and remaining
furniture was sold at 90%
Cash 7200
To realsation 7200
• An unrecorded asset of rupees 4000 and cash rupees 6000 was paid to an unrecorded
liability of rupees 12000 in full settlement
Realization a/c 6000
To cash a/c
• Ankit, promise to pay off his wife's loan of rupees 10000 at a discount of 10%

Realization a/c 9000

Ankit capital a/c
• Anil, a partner, agreed to assume the responsibility of the discharge of the loan together
with accrued interest of rupees 500, which has not been recorded in the books. Loan
amount in balance sheet was rupees 20000
• Total creditors of the firm were rupees 32000. A creditor for rupees 2000 was
untraceable and other creditors accepted payment allowing 1% discount
• Creditors of rupees 30000 were due on an average basis, one month after the
dissolution of the firm. However they were paid immediately at 12% discount per
annum
• 50% of the creditors were paid rupees 4000 less in full settlement and the remaining
creditors were paid full amount. Book value of creditors in balance sheet was rupees
100000.
• Creditors agreed to take over debtors in full settlement of their claim. Book value of
creditors was rupees 100000 and of debtors was rupees 90000 in the balance sheet
• Half of the creditors accepted machinery of rupees 40000 at an agreed valuation of 10%
less than the book value and cash of rupees 3000 in full settlement of their claims.
Remaining creditors were paid out at a discount of 10%. Book value of creditors given in
balance sheet was rupees 100000.
• Creditors accepted plant and machinery valued rupees 150000 and paid cash to the
form rupees 40000. Book value of creditors in the balance sheet was rupees 110000.
• Bimal, a partner, is to take over some of the sundry assets at rupees 7200 (being 10%
less than the book value). Remaining sundry assets are sold at 90% of the book value.
Book value of assets in balance sheet was rupees 17000.
• Investments were sold for rupees 40000 at a commission of 5%. Book value of
investments in balance sheet was rupees 25000
• 60% of stock was taken over by X,a partner, at a valuation of 70% and remaining stock
was sold at 90% less 10% selling commission. Book value of stock in balance sheet was
rupees 50000
• 70% of machinery was taken over by Amit, a partner, at valuation of 90% and remaining
machinery was sold at 80% less 5% selling commission. Book value of the machinery in
balance sheet was rupees 200000 and provision for depreciation was rupees 25000

• Debtors of rupees 10000 proved bad. Remaining debtors were realised. Book value of
debtors in balance sheet was rupees 90000 and provision for doubtful debts was rupees
6000
• 60% of debtors were realised at 90% and remaining debtors were sold to a debt
collecting agency for 80% less 10% commission. Book value of the debtors in balance
sheet was rupees 60000 and provision for doubtful debts was rupees 5000
• A bills receivable of rupees 6000 from Mridul was earlier discounted with bank. Mridul
was declared insolvent and first and final dividend of 40 paise in a rupee was received
from his estate. Firm have to pay the amount along with interest of rupees 200 to the
bank
• L, a partner, was appointed to look after the process of dissolution process , for which he
was allowed a remuneration of rupees 10,000.
• N, a partner was appointed to look after the process of dissolution, for which he was
allowed a remuneration of rupees 9000. N agreed to bear the dissolution expenses.
Actual dissolution expenses rupees 4000 were paid by the firm.
• Q, a partner was appointed to look after the process of dissolution , for which he was
allowed a remuneration of rupees 18000. Q agreed to take over stock worth Rs.18000 as
his remuneration. The stock had already been transferred to realisation Account.
• The firm had a debit balance of Rs.15,000 in the profit and loss account on the date of
dissolution.