CBSE 2025, Set 2

Question

Pass the necessary journal entries for the following transactions on the dissolution of a partnership firm of A, B and C after various assets (other than cash) and external liabilities have been transferred to Realisation Account:
(i) An unrecorded asset of ₹ 40,000 was taken over by A at ₹ 30,000.
(ii) Creditors of ₹ 60,000 accepted machinery of ₹ 50,000 in full settlement of their claim.
(iii) Realisation expenses of ₹ 5,000 were paid by the firm on behalf of partner B.
(iv) Partner C's loan of ₹ 30,000 was paid ₹ 32,000.
(v) Profit on realisation ₹ 45,000 was distributed among the partners A, B and C in the ratio of 2:2:1.

Edvaya · Accepted Answer

The correct answer is Subjective. **Journal Entries on Dissolution** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | (i) | A's Capital A/c ...Dr.     To Realisation A/c (Unrecorded asset taken over by partner A) | | 30,000 | 30,000 | | (ii) | *No Entry* (Asset given to a creditor in full settlement requires no entry) | | | | | (iii) | B's Capital A/c ...Dr.     To Cash/Bank A/c (Realisation expenses paid by firm on behalf of B) | | 5,000 | 5,000 | | (iv) | C's Loan A/c ...Dr. Realisation A/c ...Dr.     To Cash/Bank A/c (C's loan settled for more than book value, excess charged to realisation) | | 30,000 2,000 | 32,000 | | (v) | Realisation A/c ...Dr.     To A's Capital A/c     To B's Capital A/c     To C's Capital A/c (Profit on realisation distributed among partners in 2:2:1) | | 45,000 | 18,000 18,000 9,000 |

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Accountancy > Accounting For Partnership Firms > Dissolution Of Partnership Firm

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