Sita, Rita and Meeta are partners sharing profits and losses equally. On 31st March, 2022, they decided to dissolve the business. On that date, the Capital Account Balance were Sita- ₹1,00,000; Rita- ₹80,000 and Meeta- ₹60,000. Creditors for ₹30,000 and Reserve Fund for ₹30,000 were also lying in the books of the firm while on Assets side Sundry Assets were existing at ₹2,70,000. Sundry assets included patents for ₹20,000. The tangible assets were realised at 90% of the book value while creditors were settled at 110%. Realisation expenses were ₹10,000 paid by Sita. There was an unrecorded asset of ₹5,000 which was taken over by Meeta. Answer question on the basis of above information.
Identify the account/statement which is not required in case of Dissolution of a partnership firm.
Post-Dissolution Balance Sheet
During the dissolution of a partnership, a Revaluation A/c is not necessary because assets and liabilities are settled at their book values. A Post-Dissolution Balance Sheet is not required, as there is no need for further financial statements once the firm is dissolved.
Important Questions from Dissolution of a Partnership Firm
In case of dissolution of partnership firm, all assets, except cash/bank and fictitious assets, are transferred to debit side of:
Match List I with List II:
List – I List – II A. Dissolution Agreement I. When a partner becomes insane B. Dissolution by Court II. By the completion of venture C. Compulsory dissolution III. In accordance with contract between partners D. On happening of certain contingencies IV. Event making it impossible for partners to carry on business Choose the correct answer from the options given below:
Record journal entry for the following on dissolution of a firm:
Firm has a stock of ₹2,40,000. Arun, a partner, took over 50% of the stock at a discount of 15%.
The dissolution of a partnership firm takes place in the following order:
(A) Outsiders’ liabilities are paid out.
(B) Partner’s capital account is settled.
(C) All assets and outside liabilities are transferred to the realization account.
(D) Partner’s loan is repaid in proportion.
(E) Assets are sold and realized.
Choose the correct answer from the options given below:
At the time of dissolution of a partnership firm, the following accounting adjustments are considered:
(A) Partner’s current A/c is transferred to the respective partner’s loan A/c.
(B) Accumulated losses are transferred to the partner’s capital A/c in profit-sharing ratio.
(C) All assets except cash and fictitious assets are transferred to the debit side of Realisation A/c.
(D) Partners’ loans are transferred to Realisation A/c.
(E) All external liabilities are transferred to the credit side of Realisation A/c.
Choose the correct answer from the options given below:
