NCERT Solutions for Class 12 Accountancy – Partnership Accounts – Chapter 4 – Dissolution of Partnership Firm

Short answers : Solutions of Questions on Page Number : 252

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Q1 :  State the difference between dissolution of partnership and dissolution of partnership firm.
Answer :

Basis of Difference	Dissolution of Partnership	Dissolution of Partnership firm
Meaning	It means change in the partnership deed (or the agreement) among the partners.	It means that the business is wound up and the firm is dissolved.
Discontinuation	Business is not discontinued.	Business is discontinued, as the firm is dissolved.
Closure of Books of Accounts	Books of accounts are not closed, as there is only change in the existing agreement between the partners.	Books of accounts are closed, as the business is discontinued.
Assets and Liabilities	In this case, the assets and liabilities are revalued.	In this case, all the assets are sold off in order to pay the liabilities of the business.
Role of Court	There is no intervention by the court.	Dissolution of a partnership firm may be done with the consent of the court.
Nature	It is voluntary in nature.	It may be voluntary (as per the discretion of the partners) or compulsory (as per the order of the court).
Effect	It may or may not involve dissolution of the firm.	It necessarily involves dissolution of both the partnership as well as of the partnership firm.

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Q2 :State the accounting treatment for:
i. Unrecorded assets
ii. Unrecorded liabilities
Answer :
i) Accounting Treatment for Unrecorded Assets
Unrecorded asset is an asset, the value of which has been written off in the books of accounts but the asset is still in usable position. The accounting treatment for unrecorded asset is:
a) When the unrecorded asset is sold for cash

Cash A/c		Dr.
	To Realisation A/c
(Unrecorded assets sold for cash)

b) When the unrecorded asset is taken over by any partner

Partner’s Capital A/c		Dr.
	To Realisation A/c
(Unrecorded asset taken over by the partner)

ii) Accounting Treatment for Unrecorded Liabilities

Unrecorded liabilities are those liabilities which are not recorded in the books of account. The accounting treatment for unrecorded liability is:

a) When the unrecorded liability is paid off

Realisation A/c		Dr.
	To Cash A/c
(Unrecorded liability paid in cash)

b) When the unrecorded liability is taken over by a partner

Realisation A/c		Dr.
	To Partner’s Capital A/c
(Unrecorded liability  taken over by the partner)

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Q3 : On dissolution, how you deal with partner’s loan if it appears on the
(a) Assets side of the Balance Sheet
(b) Liabilities side of the Balance Sheet
Answer :
a) If  partner’s loan appears on the assets side of the Balance Sheet then it implies that the partner has taken loan from the business and is liable to pay back to the business. In such case, the loan amount is transferred to his capital
account. Thus the accounting entry will be:

Partner’s Capital A/c		Dr.
	To Partner’s Loan A/c
(Partner’s loan transferred to Partner’s Capital Account)

b) If partner’s loan appears on the liabilities side  of the Balance Sheet then it implies that the partner has forwarded loan to the firm and the firm is liable to pay back the amount to the partner. In such case, partner’s loan is paid off after paying all the external liabilities. The  partner’s loan is not transferred to the Realisation Account, in fact, it is
paid in cash. The following accounting entry is passed.-

Partner’s Loan A/c		Dr.
	To Cash/Bank A/c
(Partner’s loan paid in cash)

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Q4:  Distinguish between firm’s debts and partner’s private debts.
Answer:

Basis of Difference	Firm’s Debts	Partner’s Private Debts
Meaning	It refers to those debts that are borrowed against the name of the firm.	It refers to those debts that are borrowed personally by the partner.
Liability	All the partners of the firm are jointly and separately liable for the firm’s debt.	The concerned partner is personally liable for his private debts.
Settlement of debts by private assets	If the firm’s debt exceeds the firm’s assets, then private assets of the partners may be utilised to pay back the firm’s debt, if only  the partner’s  private assets exceeds his/her own private debts.	Private debts are settled against the partner’s private assets. Subsequently, if any surplus exists then this may be utilised to settle the firm’s debts.
Settlement of debts by firm’s assets	Firm’s debts are settled against the firm’s assets. Subsequently, if any surplus exists, then this is distributed among the partners.	After paying off firm’s debts, the surplus of firm’s assets, if any is distributed among the partners.  The personal share of the partner in this surplus can be utilised to settle his/her own private debts.

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Q5:  State the order of settlement of accounts on dissolution.
Answer: The following are the rules of settlement of accounts on  dissolution as per the Section 48 of Partnership Act 1932.
1. Application of Assets: Amount received by  the realisation (sale) of the assets shall be used in the following order:
a) First of all the external liabilities and expenses are to be paid.
b) Then, all loans and advances  forwarded by the partners should be paid.
c) Then, the capital of each partner should be paid off. If there remains any surplus after the payment of (a), (b)and (c), then it should be distributed among the partners in their profitsharing ratio.
2. Treatment of Loss: In case of loss and any  deficiency of capital this should be paid in the following order:
a) First these should be adjusted  against firm’s profits.
b) Then, against the total capital of the firm.
c)Even if  there exists any loss and deficiencies then it should be borne by all the partners individually in  their profit sharing ratio.

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Q6: On what account realisation account differs from revaluation account.
Answer:

Basis of Difference	Realisation Account	Revaluation Account
Meaning	It records the sale of various assets and payment of various liabilities.	It records the effect of revaluation of assets and liabilities on the eve of admission, retirement, death and change in the profit sharing ratio.
Time	It is prepared at the time of dissolution of firm.	It is prepared when admission/retirement/death or change in profit sharing ratio takes place.
Objective	To find profit or loss on realisation of assets and payment of liabilities.	To find out profit or loss on revaluation of assets and liabilities.
Amount	Assets and liabilities are shown at the book value.	Increase or decrease in the value of assets and liabilities are shown in this account.
Records	All assets and liabilities are recorded here.	Only those assets and liabilities are recorded here whose values have changed over a period of time.
Effect	All accounts of assets and liabilities are closed.	No account is closed on revaluation of assets and liabilities.

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Short answers numerical questions long answers : Solutions of Questions on Page Number : 253

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Q1 :Journalise the following transactions regarding Realisation expenses:
[a] Realisation expenses amounted to Rs 2,500.
[b] Realisation expenses amounting to Rs 3,000 were paid by Ashok, one of the partners.
[c] Realisation expenses Rs 2,300 borne by Tarun, personally.
[d] Amit, a partner was appointed to realise the assets, at a cost of Rs 4,000. The actual amount of Realisation amounted to Rs 3,000.
Answer:

Journal
	Particulars			L.F.	Amount Rs	Amount Rs
(a)	Realisation A/c		Dr.		2,500
	To Bank A/c					2,500
	(Realisation expenses paid)
(b)	Realisation A/c		Dr.		3,000
	To Ashok’s Capital A/c					3,000
	(Realisation expenses paid by Ashok)
(c)	No entry, as all Realisation expenses are borne personally by Tarun
(d)	Realisation A/c		Dr.		4,000
	To Amit’s Capital A/c					4,000
	(Realisation expenses paid to Amit)

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Q2 :Explain the process of dissolution of a partnership firm?
Answer :  Dissolution of partnership firm implies discontinuation of the business of the partnership firm. According to the Section 39 of Partnership Act, dissolution of partnership between all the partners of a firm is called dissolution of partnership firm. Dissolution involves winding up of business, disposal of assets and paying off the liabilities and distribution of any surplus or borne of loss by the partners of the firm. As per the Partnership Act 1932, a partnership firm may be dissolved in the following manners:

1) Dissolution by Agreement
A firm may be dissolved with:
a) the consent of all the partners, or
b) the contract between the partners
2) Compulsory Dissolution
A firm may be dissolved by:
a) the adjudication of all the partners or of all partners but one as insolvent
b) happening of an event or change in government policies that make the business unlawful.
3) Dissolution on the happening of Certain Contingencies
Subject to the contract between the partners, a firm is dissolved
a) if formed for a specific period then on the expiry of the period
b) if formed for a specific purpose then on completion of the purpose
c) on the death of partner/partners
d) on insolvency of a partner/partners
4) Dissolution by Notice
If partnership is at will then the partnership firm is dissolved if any partner giving notice in writing to all the other partners expressing his/her intention to dissolve the firm.
5) Dissolution by Court
The court may order to dissolve a partnership firm when:
a) a partner becomes insane or lunatic.
b) a partner becomes permanently incapable of performing the duties.
c) a partner is guilty of misconduct and affects the business activities.
d) a partner repeatedly breaks the terms of agreement .
e) a partner transfers his interest to a third party without the consent of other partners.
f) a business persistently incurs losses.
Besides these above mentioned circumstances, a partnership firm may be dissolved if the court at any stage finds dissolution of the firm to be justified and inevitable.
The following are the rules of settlement of accounts on dissolution as per the Section 48 of Partnership Act 1932.
1. Application of Assets: Amount received by the realisation (sale) of the assets shall be used in the following order:
a) First of all the external liabilities and expenses are to be paid.
b) Then, all loans and advances forwarded by the partners should be paid.
c) Then, the capital of each partners should be paid off. If there remains any surplus after the payment of (a), (b) and (c), then it should be distributed among the partners in their profit sharing ratio.
2. Treatment of Loss: In case of loss and any deficiency of capital, then this should be paid in the following order:
a) First these should be adjusted against firm’s profits.
b) Then, against the total capital of the firm.
c) If still there exists any loss and deficiencies, then it should be borne by all the partners individually in their profit sharing ratio.

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Q3 : Record necessary journal entries in the following cases:
[a] Creditors worth Rs 85,000 accepted Rs 40,000 as cash and Investment worth Rs 43,000, in full settlement of their claim.
[b] Creditors were Rs 16,000. They accepted Machinery valued at Rs 18,000 in settlement of their claim.
[c] Creditors were Rs 90,000. They accepted Buildings valued Rs 1,20,000 and paid cash to the firm Rs 30,000.
Answer :

Journal
	Particulars			L.F.	Amount Rs	Amount Rs
(a)	Realisation A/c		Dr.		40,000
	To Cash A/c					40,000
	(Creditors worth Rs 85,000 accepted 40,000 as cash and investment worth Rs 43,000 in their full settlement)
(b)	No Entry
	(Creditors Rs 16,000 accepted Machinery Rs 18,000 in the full settlement. No entry is required since both asset and liability are already transferred to the Realisation Account)
(c)	Cash A/c		Dr.		30,000
	To Realisation A/c					30,000
	(Creditors worth Rs 90,000 accepted buildings worth Rs 1,20,000 and returned Rs 30,000 as cash after settlement of claim to the firm)

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Q4 :What is a Realisation Account?
Answer : On dissolution of a firm, all the books of account are closed, all assets are sold and all liabilities are paid off. In order to record the sale of assets and discharge of liabilities, a nominal account is opened named Realisation Account. The main purpose to open Realisation Account is to ascertain the profit or loss due to the realisation of assets and liabilities. Realisation profit (if credit side > debit side) or realisation loss (if debit side > credit side) are transferred to the Partner’s Capital Account in their profit sharing ratio.
Concisely, following are the important objectives of preparing Realisation Account.
1) To close all the books of account.
2) To record transactions relating to the sale of assets and discharge of liabilities.
3) To determine profit or loss due to the realisation of assets and liabilities.
Accounting treatment of items related to Realisation Account
1) For transfer of assets

Realisation A/c		Dr.
	To Sundry Assets A/c (Individually)
(All Assets transferred to realisation account, except Cash/Bank, P and L debit balance, Loan to a Partner)

2) For transfer of liabilities

Sundry Liabilities A/c (Individually)		Dr.
	To Realisation A/c
(All Liabilities transferred to Realisation account except Partner’s Capitals, P and L credit balance, Loan from Partner)

3) For sale of assets

Bank A/c (Amount received)		Dr.
	To Realisation A/c
(Assets sold for cash)

4) For payment of liabilities

Realisation A/c		Dr.
	To Bank A/c
(Liabilities paid in cash)

5) For payment of realisation expenses

Realisation A/c		Dr.
	To Bank A/c
(Expenses paid)

6) For transfer of profit on realisation

Realisation A/c		Dr.
	To Partner’s Capital A/c
(Profit on realisation transferred to partner ‘s capital account)

7) For transfer of loss on realisation

Partner’s Capital A/c		Dr.
	To Realisation A/c
(Loss transferred to partner’s capital account)

Format of Realisation Account
Dr.			Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Various Assets (Excluding Cash/Bank, fictitious assets, Debit balance of P and L A/c, partner Capital A/c, Current A/c, Loan to Partner)   Cash/Bank (Payment for realisation expenses)     Cash/Bank (Payment to outside and unrecorded liabilities)     Partner’s Capital A/c (If any liability taken on expenses paid by him or remuneration payable to him) Partner Capital A/c (Profit on realisation distributed in the profit sharing ratio among all the partners)	– – – –	Various Liabilities (Excluding Partner Capital account, reserves, P and L A/c, Current A/c, Loan to Partner)     Provision on assets (like, Provision for doubtful debts; Provision for depreciation)   Cash/Bank (Amount received from realisation of assets and unrecorded assets)   Partner ‘s Capital A/c (If any asset taken over by any partner) Partner Capital A/c (Loss on realisation borne by all the partners in their profit sharing ratio)		– – – –
	–			–

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Q5 : There was an old computer which was written-off in the books of Accounts in the pervious year. The same has been taken over by a partner Nitin for Rs 3,000. Journalise the transaction, supposing. That the firm has been dissolved.
Answer :

Journal
Particulars		L.F.	Amount Rs	Amount Rs
Nitin’s Capital A/c	Dr.		3,000
To Realisation A/c				3,000
(Unrecorded computer taken over by Nitin)

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Q6 : Reproduce the format of Realisation Account.
Answer :

Format of Realisation Account
Dr.			Cr.
Particulars	Amount Rs	Particulars		Amount Rs
Various Assets (Excluding Cash/Bank, fictitious assets, Debit balance of P and L A/c, partner Capital A/c, Current A/c, Loan to Partner)   Cash/Bank (Payment for realisation expenses)     Cash/Bank (Payment to outside and unrecorded liabilities)     Partner’s Capital A/c (If any liability taken on expenses paid by him or remuneration payable to him) Partner Capital A/c (Profit on realisation distributed in the profit sharing ratio among all the partners)	– – – –	Various Liabilities (Excluding Partner Capital account, reserves, P and L A/c, Current A/c, Loan to Partner)     Provision on assets (like, Provision for doubtful debts; Provision for depreciation)   Cash/Bank (Amount received from realisation of assets and unrecorded assets)   Partner ‘s Capital A/c (If any asset taken over by any partner) Partner Capital A/c (Loss on realisation borne by all the partners in their profit sharing ratio)		– – – –
	–			–

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Q7: What journal entries will be recorded for the following transactions on the dissolution of a firm:
[a] Payment of unrecorded liabilities of Rs 3,200.
[b] Stock worth Rs 7,500 is taken by a partner Rohit.
[c] Profit on Realisation amounting to Rs 18,000 is to be distributed between the partners Ashish and Tarun in the ratio of 5:7.
[d] An unrecorded asset realised Rs 5,500.
Answer :

Journal
	Particulars			L.F.	Amount Rs	Amount Rs
(a)	Realisation A/c		Dr.		3,200
	To Bank A/c					3,200
	(Unrecorded liabilities paid)
(b)	(Rohit’s Capital A/c		Dr.		7,500
	To Realisation A/c					7,500
	(Stock is taken over by Rohit)
(c)	Realisation A/c		Dr.		18,000
	To Ashish’s Capital A/c					7,500
	To Tarun’s Capital A/c					10,500
	(Profit on Realisation is transferred to Partners’ Capital Account)
(d)	Bank A/c		Dr.		5,500
	To Realisation A/c					5,500
	(Unrecorded asset sold)

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Q8: How deficiency of creditors is paid off?
Answer : At the time of dissolution of a firm, the amount received from the sale of firm’s assets are utilised to pay the creditors. If the sale receipts fall short, then partners’ private assets are used for settling the dues of the firm’s creditors. Even if some portion of the amount due to creditors is left unpaid, then there arises deficiency of creditors. There are generally two procedures to be followed to treat the deficiency of creditors.
1. Transferring deficiency to the Deficiency Account
2. Transferring deficiency to the Partner’s Capital Account
In the former procedure, a separate account is prepared for the firm’s creditors. Then in order to ascertain the firm’s cash balance accruing from the sale of the firm’s assets and partners’ private assets, Cash Account is prepared. After ascertaining the cash availability with the firm, the creditors and the external liabilities are paid proportionately (partially). The remaining unpaid creditors or the deficiency is transferred to the Deficiency Account.
In the latter procedure, creditors are paid by the cash available with the firm including the partners individual contribution. The deficiency or unpaid creditors amount is transferred to the Partner’s Capital Account. Thus the deficiency of the creditors is borne by all the partners in their profit sharing ratio. If any partner becomes insolvent and is unable to bear the deficiency, then this will be regarded as a capital loss to the firm. If the partnership deed is silent about such capital loss in the facet of insolvency of a partner, then according to the Garner v/s Murray case, such capital loss need to be borne by the solvent partners in their capital ratio.

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Q9: Give journal entries for the following transactions:
1. To record the Realisation of various assets and liabilities,
2. A Firm has a Stock of Rs 1,60,000. Aziz, a partner took over 50% of the Stock at a discount of 20%,
3. Remaining Stock was sold at a profit of 30% on cost,
4. Land and Buildging (book value Rs 1,60,000) sold for Rs 3,00,000 through a broker who charged 2%, commission on the deal,
5. Plant and Machinery (book value Rs 60,000) was handed over to a Creditor at an agreed valuation of 10% less than the book value,
6. Investment whose face value was Rs 4,000 was realised at 50%.
Answer:

Journal
	Particulars			L.F.	Amount Rs	Amount Rs
1)
(a)	For Transfer of Assets
	Realisation A/c		Dr.		–
	To Assets A/c (Individually)					–
	(Assets transferred to Realisation Account)
(b)	For Transfer of Liabilities
	Liabilities A/c (Individually)		Dr.		–
	To Realisation A/c					–
	(Liabilities transferred to Realisation Account)
(c)	For sale of Asset
	Cash/Bank A/c		Dr.		–
	To Realisation A/c					–
	(Assets sold)
(d)	For liabilitiy paid
	Realisation A/c		Dr.		–
	To Cash/Bank A/c					–
	(Liabilities paid)
2)	Aziz’s Capital A/c		Dr.		64,000
	To Realisation A/c					64,000
	(Aziz, a partner took over 50% of stock at 20% discount, the value of the total stock  was Rs 1,60,000) [1,60,000 × (50/100) × (80/100) = Rs 64,000]
3)	Bank A/c		Dr.		1,04,000
	To Realisation A/c					1,04,000
	(Stock worth Rs 80,000 sold at a profit of 30% on cost) [80,000 × (130/100 = Rs 1,04,000)]
4)	Bank A/c		Dr.		2,94,000
	To Realisation A/c					2,94,000
	(Land and Building sold for Rs 3,00,000 and 2% commission paid to the broker)
5)	No entry
	(Plant and Machinery Rs 60,000 handed over to the creditors at a discount of 10%.  No entry is required as both the asset and liability are already transferred to the Realisation Account)
6)	Bank A/c		Dr.		2,000
	To Realisation A/c					2,000
	(Investments worth Rs 4,000 were realised at 50%)

NOTE: In this chapter, it has been assumed that all receiving  and payments are made through bank.

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Q10: How will you deal with the Realisation expenses of the firm of Rashim and Bindiya in the following cases:
1. Realisation expenses amounts to Rs 1,00,000,
2. Realisation expenses amounting to Rs 30,000 are paid by Rashim, a partner.
3. Realisation expenses are to be borne by Rashim for which he will be paid Rs 70,000 as remuneration for completing the dissolution process. The actual expenses incurred by Rashim were Rs 1,20,000.
Answer :

Books of Rashim and Bindiya   Journal
	Particulars			L.F.	Amount Rs	Amount Rs
1)	Realisation A/c		Dr.		1,00,000
	To Bank A/c					1,00,000
	(Realisation expenses paid)
2)	Realisation A/c		Dr.		30,000
	To Rashim’s Capital A/c					30,000
	(Realisation expenses borne by Rashim)
3)	Realisation A/c		Dr.		70,000
	To Rashim’s Capital A/c					70,000
	(Realisation expenses borne by Rashim and remuneration to him for dissolution Rs 70,000)

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Q11: The book value of assets (other than cash and bank) transferred to Realisation Account is Rs 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a Creditor, in full settlement of his claim.
You are required to record the journal entries for Realisation of assets.
Answer :

Journal
Particulars			L.F.	Amount Rs	Amount Rs
Realisation A/c		Dr.		1,00,000
To Sundry Assets A/c					1,00,000
(Assets other than cash and bank transferred to Realisation Account)
Atul’s Capital A/c		Dr.		40,000
To Realisation A/c					40,000
(Atul took over 50% of assets worth Rs 1,00,000 at 20% discount) [1,00,000 × (50/100) × (80/100)]
Bank A/c		Dr.		26,000
To Realisation A/c					26,000
(Assets worth Rs 20,000, i.e. 40% of assets of Rs 50,000 are sold at a profit of 30%) [50,000 × (40/100) × (130/100)]
No entry is made for obsolescence of the assets and the assets given to the creditors in the full settlement as these are already transferred to the Realisation Account and adjusted)

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Q12: Record necessary journal entries to record the following unrecorded assets and liabilities in the books of Paras and Priya:
1. There was an old furniture in the firm which had been written-off completely in the books. This was sold for Rs 3,000,
2. Ashish, an old customer whose Account for Rs 1,000 was written-off as bad in the previous year, paid 60%, of the amount,
3. Paras agreed to take over the firm’s goodwill (not recorded in the books of the firm), at a valuation of Rs 30,000,
4. There was an old typewriter which had been written-off completely from the books. It was estimated to realize Rs 400. It was taken away by Priya at an estimated price less 25%,
5. There were 100 shares of Rs 10 each in Star Limited acquired at a cost of Rs 2,000 which had been written-off completely from the books. These shares are valued @ Rs 6 each and divided among the partners in their profit sharing ratio.
Answer :

Books of Paras and Priya   Journal
	Particulars			L.F.	Amount Rs	Amount Rs
1)	Bank A/c		Dr.		3,000
	To Realisation A/c					3,000
	(Unrecorded furniture sold)
2)	Bank A/c		Dr.		600
	To Realisation A/c					600
	(Bad Debt recovered which was previously written off as bad)
3)	Paras’s Capital A/c		Dr.		30,000
	To Realisation A/c					30,000
	(Unrecorded goodwill taken over by Paras)
4)	Priya’s Capital A/c		Dr.		300
	To Realisation A/c					300
	(Unrecorded Typewriter estimated Rs 400 taken over by Priya at 25% less price)
5)	Paras’s Capital A/c		Dr.		300
	Priya’s Capital A/c		Dr.		300
	To Realisation A/c					600
	(100 shares of Rs 10 each which were not recorded in the books taken @ Rs 6 each by Paras and Priya and divided between them in their profit sharing ratio)

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Q13: All partners wishes to dissolve the firm. Yastin, a partner wants that her loan of Rs 2,00,000 must be paid off before the payment of capitals to the partners. But, Amart, another partner wants that the capitals must be paid before the payment of Yastin’s loan. You are required to settle the conflict giving reasons.
Answer :
As per section 48 of Partnership Act 1932, at the time of dissolution, loans and advances from the partners must be paid off before the settlement of their capital accounts. Hence, Yastin’s argument is correct that her loan of Rs 2,00,000 must be paid off before the payment of partners’ capital.

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Q14:  What journal entries would be recorded for the following transactions on the dissolution of a firm after various assets (other than cash) on the third party liabilities have been transferred to Reliasation Account.
1. Arti took over the Stock worth Rs 80,000 at Rs 68,000.
2. There was unrecorded Bike of Rs 40,000 which was taken over By Mr. Karim.
3. The firm paid Rs 40,000 as compensation to employees.
4. Sundry creditors amounting to Rs 36,000 were settled at a discount of 15%.
5. Loss on Realisation Rs 42,000 was to be distributed between Arti and Karim in the ratio of 3:4.
Answer :

Journal
	Particulars			L.F.	Amount Rs	Amount Rs
1	Arti’s Capital A/c		Dr.		68,000
	To Realisation A/c					68,000
	(Arti took over stock worth Rs 80,000 at Rs 68,000)
2.	Karim’s Capital A/c		Dr.		40,000
	To Realisation A/c					40,000
	(Karim took over an unrecorded bike of  Rs 40,000)
3.	Realisation A/c		Dr.		40,000
	To Bank A/c					40,000
	(Compensation paid to the employees )
4.	Realisation A/c		Dr.		30,600
	To Bank A/c					30,600
	(Creditors amounting Rs 36,000 were settled at a discount of 15%) [36,000 × (85/100)]
5.	Arti’s Capital A/c		Dr.		18,000
	Karim’s Capital A/c		Dr.		24,000
	To Realisation A/c					42,000
	(Loss on Realisation transferred to Partners’ Capital Account)

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Q15: Rose and Lily shared profits in the ratio of 2:3. Their Balance Sheet on March 31, 2012 was as follows:

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Q16: Shilpa, Meena and Nanda decided to dissolve their partnership on March 31,2006. Their profit sharing ratio was 3:2:1 and their Balance Sheet was as under:

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Q17: Surjit and Rahi were sharing profits (losses) in the ratio of 3:2, their Balance Sheet as on March 31, 2004* is as follows:

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Q18: Rita, Geeta and Ashish were partners in a firm sharing profits/losses in the ratio of 3:2:1. On March 31, 2012 their balance sheet was as follows: 

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Q19: Anup and Sumit are equal partners in a firm. They decided to dissolve the partnership on December 31, 2012. When the balance sheet is as under:

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Q20: Ashu and Harish are partners sharing profit and losses as 3:2. They decided to dissolve the firm on December 31, 2012. Their balance sheet on the above date was:

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Q21:  Sanjay, Tarun and Vineet shared profit in the ratio of 3:2:1. On December 31,2012 their balance sheet was as follows: