CBSE XII COMPILED BY: SUDHIR SINHA

ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

DISSOLUTION OF PARTNERSHIP FIRM (CBSE EXAM QUESTION BANK)

Question 1. Ankit, Bobby and Kartik were partners in a firm sharing profits in the ratio 4:3:3.
The firm was dissolved on 31-3-2018. Pass the necessary Journal entries for the following
transactions after various assets (other than cash and bank) and third-party liabilities had been
transferred to Realisation Account:
(i) The firm had stock of ₹80,000. Ankit took over 50% of the stock at a discount of 20%
while the remaining stock was sold off at a profit of 30% on cost.
(ii) A liability under a suit for damages included in creditors was settled at ₹32,000 as
against only ₹13,000 provided in the books. Total creditors of the firm were ₹50,000.
(iii) Bobby’s sister’s loan of ₹20,000 was paid off along with interest of ₹2,000.
(iv) Kartik’s Loan of ₹12,000 was settled at ₹12,500. [CBSE MAIN SET A 2019]

Question 2. Gaurav, Saurabh and Vaibhav were partners in a firm sharing profits and losses
in the ratio of 2:2:1. They decided to dissolve the firm on 31st March, 2018. After transferring
Sundry assets (other than cash in hand and cash at Bank) and third-party liabilities to
realisation account, the assets were realized and liabilities were paid off as follows:
(i) A machinery with a book value of ₹6,00,000 was taken over by Gaurav at 50% and stock
worth ₹5,000 was taken over by a creditor of ₹9,000 in full settlement of his claim.
(ii) Land and building (book value ₹3,00,000) was sold for ₹4,00,000 through a broker who
charged 2 % commission.
(iii) The remaining creditors were paid ₹76,000 in full settlement of their claim and the
remaining assets were taken over by Vaibhav for ₹17,000.
(iv) Bank loan of ₹3,00,000 was paid along with interest of ₹21,000.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE MAIN SET B 2019]

Question 3. Ravi, Shankar and Madhur were partners in a firm sharing profits in the ratio of
7:2:1. On 31st March, 2018, the firm was dissolved, after transferring sundry assets (other than
cash in hand and cash at bank) and third-party liabilities in the realization account the
following transactions took place.
(i) Debtors amounting to ₹1,40,000 were handed over to a debt collection agency which
charged 5% commission. The remaining debtors were ₹47,000, out of which debtors of
₹17,000 could not be recovered because the same became insolvent.
(ii) Creditors amounting to ₹5,000 were paid ₹3,500 in full settlement of their ₹claim and
balance creditors were handed over stock of ₹90,000 in full settlement of their claim of
₹95,000.
(iii) A bills receivable ₹2,000 discounted with the bank was dishonoured by its acceptor and
the same had to be met by the firm.
(iv) Profit on realisation amounted to ₹6,000.
Pass necessary journal entries for the above transactions in the books of Ravi, Shankar and
Madhur. [CBSE MAIN SET C 2019]

Question 4. Ravi and Mukesh were partners in a firm sharing profits and losses equally. On
31st March, 2019 their firm was dissolved. On the date of dissolution their Balance Sheet
showed stock of ₹60,000 and creditors of ₹70,000. After transferring stock and creditors to
realisation account the following transactions took place:
a) Ravi took over 40% of total stock at 20% discount.
b) 30% of total stock was taken over by creditors of ₹20,000 in full settlement.
c) Remaining stock was sold for cash at a profit of 25%.
d) Remaining creditors were paid in cash at a discount of 10%.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET A 2019]
 CBSE XII COMPILED BY: SUDHIR SINHA
ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

Question 5. Singh and Jain were partners in a firm sharing profits and losses in the ratio of
3:7. On 31st March, 2019 their firm was dissolved. On the date of dissolution, the Balance
Sheet showed stock of ₹90,000 and creditors of ₹1,00,000. After transferring the assets (other
than cash in hand and cash at bank) and third-party liabilities to realisation account the
following transactions took place:
a) Singh took over 50% of the total stock at 10% discount.
b) 20% of the total stock was taken over by creditors of ₹20,000 in full settlement.
c) Remaining stock was sold for cash at 10% loss.
d) Remaining creditors were paid by cheque at a discount of 5%.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET B 2019]

Question 6. Amrit and Preet were partners in a firm sharing profits and losses in the ratio of
5:3. On 31st March, 2019 their firm was dissolved. On the date of dissolution their Balance
Sheet showed stock of ₹2,00,000 and creditors of ₹1,20,000. After transferring assets (other
than cash in hand and cash at bank) and third-party liabilities to realisation account the
following transactions took place.
a) 40% of the total stock was taken over by Amrit at 10% less than book value.
b) 20% of the total stock was taken over by a creditor of ₹50,000 in full settlement of his
account.
c) The remaining creditors were paid at a discount of ₹5,000.
d) The remaining stock was sold for cash for ₹90,000.
Pass necessary journal entries for the above transactions in the books of the firm.
[CBSE COMPARTMENT SET C 2019]

Question 7. Pass the necessary journal entries for the following transactions on the dissolution
of the partnership firm of Tony and Rony after the various assets (other than cash) and external
liabilities have been transferred to Realization Account:
(i) An unrecorded asset of ₹2,000 and cash ₹3,000 was paid for liability of ₹6,000 in full
settlement.
(ii) 100 shares of ₹10 each have been taken over by partners at market value of ₹20 per share
in their profit sharing ratio, which is 3 : 2.
(iii) Stock of ₹30,000 was taken over by a creditor of ₹40,000 at a discount of 30% in full
settlement.
(iv) (iv) Expenses of realisation ₹4,000 were to be borne by Rony. Rony used the firm’s cash
for paying these expenses. [CBSE MAIN SET A 2020]

Question 8. Rakesh, Ram and Rohan were partners sharing profits in the ratio of 5 : 3 : 2. On 31 st
March, 2018, their Balance Sheet was as follows :
Balance Sheet of Rakesh, Ram and Rohan as at 31st March, 2018
Liabilities (₹) Assets (₹)
Creditors 70,000 Land and Building 3,50,000
Rohan’s Loan 20,000 Stock 3,00,000
Mrs Rohan’s Loan 20,000 Debtors 2,00,000
Capital A/cs: Less: Prov. for b/d 10,000 1,90,000
Rakesh 4,00,000 Cash 70,000
Ram 3,00,000
Rohan 1,00,000 8,00,000
9,10,000 9,10,000

The firm was dissolved on the above date on the following terms:
CBSE XII COMPILED BY: SUDHIR SINHA
ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

a) Land and building and stock were sold for ₹6,00,000. Debtors were realised at 10% less than
the book value.
b) Mrs. Rohan’s loan was settled by giving her an unrecorded computer of ₹22,000.
c) Rakesh paid off one of the creditors ₹20,000 in settlement of ₹30,000.
d) Rohan’s loan was fully settled at ₹18,500.
Prepare Realisation Account. [CBSE MAIN SET B 2020]
[Loss on Realisation Account: ₹28,500]

Question 9. Mona and Sona were partners in a firm sharing profits in the ratio of 2 : 3. On 31st March,
2019, their Balance Sheet was as under :
Balance Sheet of Mona and Sona as at 31st March, 2019
Liabilities (₹) Assets (₹)
Creditors 2,10,000 Land and Building 6,00,000
Employees’ Provident Fund 2,00,000 Debtors 3,10,000
Capital A/cs: Less: Prov. for b/d 10,000 3,00,000
Mona 4,00,000 Bank 3,10,000
Sona 6,00,000 10,00,000 Stock 2,00,000

14,10,000 14,10,000

The firm was dissolved on 1st April, 2019 and the assets and liabilities were settled as follows:
(i) Half of the creditors accepted 50% of the stock. Remaining creditors were paid in full.
(ii) The remaining stock was realised at 90% and debtors realised 80% of their book value.
(iii) Sona took over the responsibility to realise the assets and discharge the liabilities at a remuneration
of ₹20,000 and was to bear all expenses of realisation. She paid realisation expenses of ₹18,000 out of
her personal account.
(iv) Land and Building realised ₹7,00,000.
Prepare Realisation Account. [CBSE MAIN SET C 2020]
[Profit on Realisation Account: ₹23,000]

Question 10. Give the necessary journal entries for the following transactions in case of
dissolution of a partnership firm after various assets (other than cash and bank) and third
party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses ₹5,000 were paid by the firm.
(ii) An unrecorded computer not appearing in the books of accounts realised ₹2,200.
(iii) A creditor for ₹1,40,000 accepted building valued at ₹1,80,000 and paid to the firm
₹40,000.
(iv) Loss on realisation ₹10,000 was divided between the partners Subhi and Sudha in the
ratio of 4 : 1. [CBSE COMPTT SET A 2020]

Question 11. Suman and Rajan were partners in a firm sharing profits and losses in the ratio
of 3 : 1. The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for
the following transactions after various assets (other than cash in hand and at bank) and third
party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses ₹10,000 were paid by the firm.
(ii) Rajan had given a loan of ₹60,000 to the firm for which he accepted ₹58,000 in full
settlement.
(iii) The firm had a debit balance of ₹40,000 in the Profit and Loss Account on the date of
dissolution.
(iv) Profit on realisation was ₹12,000. [CBSE COMPTT SET B 2020]
CBSE XII COMPILED BY: SUDHIR SINHA
ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

Question 12. Radha and Mudit were partners in a firm sharing profits and losses in the ratio
of 3 : 2. The firm was dissolved on 31st March, 2019. Pass the necessary Journal entries for
the following transactions after various assets (other than cash in hand and cash at bank) and
third party
liabilities have been transferred to Realisation Account:
(i) A creditor of ₹70,000 accepted furniture valued at ₹1,50,000 and paid to the firm ₹80,000.
(ii) Bank loan of ₹90,000 was settled along with interest ₹9,000.
(iii) Realisation expenses amounting to ₹8,000 were paid by Mudit.
(iv) Loss on realisation was ₹20,000. [CBSE COMPTT SET C 2020]

Question 13. Pass the necessary journal entries for the following transactions in case of
dissolution of the partnership firm of X and Y after various assets (other than cash and bank)
and third party liabilities have been transferred to Realisation Account:
(i) Dissolution expenses were 4,000.
(ii) Machinery of the book value of 50,000 was sold in the market for 47,000 for which a
commission of 500 was paid to the broker.
(iii) A creditor for 70,000 accepted stock valued at 90,000 and paid to the firm 20,000.
(iv) Loss on realisation 40,000 was divided between the partners X and Y in the ratio of 5: 3.
[CBSE COMPTT SET A 2021]

Question 14. Chanda, Tara and Nisha were partners in a firm sharing profits and losses in
the ratio of 3: 2:1. They decided to dissolve the firm on 31 st March, 2021. Pass necessary
Journal Entries for the following transactions after all assets (other than cash and bank) and
third-party liabilities have been transferred to Realisation Account.
(i) A typewriter completely written off from the books was sold for ₹9,000.
(ii) Chanda took over stock worth ₹96,000 at ₹84,000.
(iii) Nisha was to get remuneration of ₹42,000 for completing the dissolution process.
(iv) Creditors of ₹23,500 took over all the investments at ₹10,000. Remaining amount was paid
to them in Cash.
(v) Sundry Creditors amounting to ₹40,000 were settled at a discount of 10%.
[CBSE 2022 MAIN TERM-2]

Question 15. B, C and D were partners in a firm sharing profits and losses in the ratio of 2 :
2 : 1. On 31st March, 2022 their Balance Sheet was as follows :
Balance Sheet of B, C and D as at 31st March, 2022
Liabilities (₹) Assets (₹)
Creditors 1,20,000 Land and Building 11,00,000
Profit and Loss A/c 2,000 Debtors 2,00,000
Capital A/cs: Less: Prov. for b/d 5,000 1,95,000
B 13,00,000 Bank 17,000
C 2,00,000 17,00,000 Stock 4,50,000
D 2,00,000 Furniture 60,000
18,22,000 18,22,000

On the above date the firm was dissolved. The Assets were realised and the Liabilities were
paid off as follows:
(i) Debtors were sold to a debt collection agency at 10% less than the book value.
(ii) Stock ₹2,00,000 was taken over by B at ₹90,000 less than its book value and the remaining
stock realised ₹1,80,000.
(iii) Furniture was taken over by C for ₹65,000.
CBSE XII COMPILED BY: SUDHIR SINHA
ACCOUNTANCY DISSOLUTION OF PARTNERSHIP FIRM

(iv) Creditors were paid 10% less in full settlement of their amount.
(v) Land and Building realised ₹18,00,000.
(vi) B was assigned the work of dissolution for which he was to be paid ₹40,000.
Prepare Realisation Account. [CBSE 2022 COMPTT TERM-2]

Question 16. Aadish and Shreyansh were partners in a firm sharing profits and losses in
the ratio of 3 : 2. On 31st March, 2022 their Balance Sheet was as follows :

Balance Sheet of Aadish and Shreyansh as at 31st March, 2022

Liabilities (₹) Assets (₹)

Creditors 90,000 Cash at Bank 20,000
General Reserves 45,000 Stock 24,000
Mrs Aadish’s Loan 30,000 Investments 30,000
Shreyansh’s Loan 30,000 Debtors 20,000
Capital A/cs: Less: Prov for B/d 2,000 18,000
Aadish 1,00,000 Advertisement Suspense A/c 2,00,000
Shreyansh 97,000 1,97,000 Plant 1,00,000
3,92,000 3,92,000

The firm was dissolved on 31st March, 2022 on the following terms:
(i) Debtors realised ₹17,000 and plant realised 10% more than the book value.
(ii) Aadish promised to pay Mrs. Aadish’s loan and took over the stock at ₹20,000.
(iii) Shreyansh took away half of the investments at a discount of 10%. Remaining
investments realised ₹4,500.
(iv) Creditors were paid off at a discount of 10%.
(v) Expenses of realisation amounted to ₹7,000.

Prepare Realisation Account. [CBSE MAIN 2023 SET A]

Question 17. M, S and R were partners in a firm sharing profits and losses in the ratio of
2 : 1 : 2. On 31.03.2022, their Balance Sheet was as follows :
Balance Sheet of M, S and R as at 31st March, 2022

Liabilities (₹) Assets (₹)

Creditors 80,000 Fixed Assets 1,20,000
Profit and Loss A/c 50,000 Stock 70,000
Capital A/cs: Debtors 20,000
M 60,000 Bank 60,000
S 50,000
R 30,000 1,40,000
2,70,000 2,70,000

On the above date the firm was dissolved. Fixed assets realised ₹1,20,000 and stock
realised ₹10,000. Debtors were realised at their book value and liabilities were paid in full.
Prepare Realisation Account and Partners’ Capital Account
[CBSE COMPARTMENT 2023 SET A]