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Dear Teachers,

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These slides have been prepared based on the NCERT syllabus to support you in teaching Plus One and Plus Two Accountancy and Computerised Accounting.

​

Please review and verify the content before using it in your classrooms. If you find any errors or have feedback, please let me know.

​

Mujeeb Rahiman C

HSST Commerce

GHSS Pattikkad

Malappuram Dt.

​

✉️ mujeebchemmala@gmail.com

9995983075 �

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Chapter - 4

Dissolution of Partnership Firm

Illustration - 1

Realisation A/c | Partners’ Capital A/c | Cash / Bank A/c

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A and B shared profits in the ratio of 3:2. Their Balance Sheet as on 31st March, 2018 was as follows:

Liabilities Amount

Creditors 20,000

​

Capitals :

A 150000

B 90000 2,40,000

​

2,60,000

Assets Amount

Cash at bank 7,000

Debtors 40,000

Less Provision 1,800 38,200

Stock 54,800

Machinery 40,000

Land & Building 1,20,000

2,60,000

Balance Sheet

Partners decide to dissolve the firm on the above date. Assets realised as follows :-

Stock ₹45,000, Machinery 20% less than book value, Debtors ₹35,000, Land and Building ₹30,000 more than book value

Creditors were agreed to accept 5% less. Expenses of realisation of assets amounted to ₹1,200

Pass necessary journal entries and prepare ledger accounts.

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Realisation A/c Dr.

To Debtors A/c

To Stock A/c

To Machinery A/c

To Land & Building A/c

(Transfer of various assets to realisation A/c)

​

40,000

54,800

40,000

1,20,000

2,54,800

2018

March 31

Particulars

Credit ₹

Debit ₹

Date

L.F

JOURNAL ENTRIES

Liabilities Amount

Creditors 20,000

​

Capitals :

A 150000

B 90000 2,40,000

​

2,60,000

Assets Amount

Cash at bank 7,000

Debtors 40,000

Less Provision 1,800 38,200

Stock 54,800

Machinery 40,000

Land & Building 1,20,000

2,60,000

Balance Sheet

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Creditors A/c Dr. Provision for Doubtful Debts A/c Dr.

To Realisation A/c

(Transfer of outside liabilities and provision for doubtful debts to realisation A/c)

​

​

21,800

20,000

1,800

​

​

Liabilities Amount

Creditors 20,000

​

Capitals :

A 150000

B 90000 2,40,000

​

Assets Amount

Cash at bank 7,000

Less Provision 1,800

Balance Sheet

Particulars

Credit ₹

Debit ₹

Date

L.F

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Creditors A/c Dr. Provision for Doubtful Debts A/c Dr.

To Realisation A/c

(Transfer of outside liabilities and provision for doubtful debts to realisation A/c)

​

​

21,800

20,000

1,800

​

​

Liabilities Amount

​

Capitals :

A 150000

B 90000 2,40,000

​

Assets Amount

Cash at bank 7,000

Balance Sheet

Particulars

Credit ₹

Debit ₹

Date

L.F

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Bank A/c Dr.

To Realisation A/c

(Amount realised on sale of Assets)

Stock 45,000

Machinery 32,000

Debtors 35,000

Land & Building 1,50,000

​

2,62,000

2,62,000

​

Particulars

Credit ₹

Debit ₹

Date

L.F

Assets Amount

Cash at bank 7,000

Debtors 40,000

Less Provision 1,800 38,200

Stock 54,800

Machinery 40,000

Land & Building 1,20,000

Stock ₹45,000, Machinery 20% less than book value, Debtors ₹35,000, Land and Building ₹30,000 more than book value

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Realisation A/c Dr.

To Bank A/c

(Creditors paid at a discount 5%)

​

Realisation A/c Dr.

To Bank A/c

(The payment of realisation expenses)

​

19,000

​

​

1,200

19,000

​

​

1,200

Particulars

Credit ₹

Debit ₹

Date

L.F

Creditors were agreed to accept 5% less. Expenses of realisation of assets amounted to ₹1,200

Liabilities Amount

Creditors 20,000

​

Capitas :

A 150000

B 90000 2,40,000

​

2,60,000

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Realisation A/c Dr.

To Debtors A/c

To Stock A/c

To Machinery A/c

To Land & Building A/c

(Transfer of various assets to realisation A/c)

​

40,000

54,800

40,000

1,20,000

2,54,800

2018

March 31

Machinery

40,000

Land & Building

1,20,000

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Machinery

40,000

Land & Building

1,20,000

Creditors A/c Dr. Provision for Doubtful Debts A/c Dr.

To Realisation A/c

(Transfer of outside liabilities to realisation A/c)

​

​

21,800

20,000

1,800

​

​

Creditors

20,000

Provision for Doubtful Debts

1,800

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Machinery

40,000

Land & Building

1,20,000

Creditors

20,000

Provision for Doubtful Debts

1,800

Bank A/c Dr.

To Realisation A/c

(Amount realised on sale of Assets)

​

​

2,62,000

2,62,000

​

Bank (Assets realised)

2,62,000

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Machinery

40,000

Land & Building

1,20,000

Creditors

20,000

Provision for Doubtful Debts

1,800

Bank (Assets realised)

2,62,000

Realisation A/c Dr.

To Bank A/c

(Creditors paid at a discount 5%)

​

Realisation A/c Dr.

To Bank A/c

(The payment of realisation expenses)

​

19,000

​

​

1,200

19,000

​

​

1,200

Bank (Creditors paid)

19,000

Bank (Expenses paid)

1,200

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Machinery

40,000

Land & Building

1,20,000

Creditors

20,000

Provision for Doubtful Debts

1,800

Bank (Assets realised)

2,62,000

Bank (Creditors paid)

19,000

Bank (Expenses paid)

1,200

2,83,800

2,83,800

8,800

Profit on realisation transferred to capital accounts :

A’s Capital A/c (3/5) 5,280

B’s Capital A/c (2/5) 3,520

A and B shared profits in the ratio of 3:2

Realisation A/c Dr.

To A’s Capital A/c

To B’s Capital A/c

(Profit on realisation transferred to partners’ capital accounts)

​

5,280

3,520

8,800

​

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B

Particulars

Balance b/d

CAPITAL ACCOUNTS

A

1,50,000

Date

31/03/18

B

Particulars

A

Date

90,000

Liabilities Amount

​

Capitals :

A 150000

B 90000 2,40,000

​

Assets Amount

Cash at bank 7,000

Balance Sheet

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B

Particulars

Balance b/d

CAPITAL ACCOUNTS

A

1,50,000

Date

31/03/18

B

Particulars

A

Date

90,000

A and B shared profits in the ratio of 3:2

Realisation A/c Dr.

To A’s Capital A/c

To B’s Capital A/c

(Profit on realisation transferred to partners’ capital accounts)

​

5,280

3,520

8,800

​

Realisation A/c

5,280

3,520

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B

Particulars

Balance b/d

CAPITAL ACCOUNTS

A

1,50,000

Date

31/03/18

B

Particulars

A

Date

90,000

Realisation A/c

5,280

3,520

1,55,280

93,520

1,55,280

93,520

1,55,280

93,520

Bank A/c

(Final Payment)

31/03/18

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B

Particulars

Balance b/d

CAPITAL ACCOUNTS

A

1,50,000

Date

31/03/18

B

Particulars

A

Date

90,000

A’s Capital A/c Dr.

B’s Capital A/c Dr.

To Bank A/c

(Final Payment made to partners)

​

​

2,48,800

1,55,280

93,520

​

Realisation A/c

5,280

3,520

1,55,280

93,520

1,55,280

93,520

1,55,280

93,520

Bank A/c

(Final Payment)

31/03/18

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

BANK ACCOUNT

Assets Amount

Cash at bank 7,000

Date

Date

31/03/18

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

Realisation A/c

2,62,000

BANK ACCOUNT

Date

Date

31/03/18

Bank A/c Dr.

To Realisation A/c

(Amount realised on sale of Assets)

​

​

2,62,000

2,62,000

​

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

Realisation A/c (Sale of Assets)

2,62,000

BANK ACCOUNT

Date

Date

31/03/18

Realisation A/c Dr.

To Bank A/c

(Creditors paid at a discount 5%)

​

Realisation A/c Dr.

To Bank A/c

(The payment of realisation expenses)

​

19,000

​

​

1,200

19,000

​

​

1,200

Realisation A/c (Creditors paid)

19,000

Realisation A/c (Expenses paid)

1,200

31/03/18

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

Realisation A/c (Sale of Assets)

2,62,000

BANK ACCOUNT

Date

Date

31/03/18

Realisation A/c (Creditors paid)

19,000

Realisation A/c (Expenses paid)

1,200

31/03/18

A’s Capital A/c Dr.

B’s Capital A/c Dr.

To Bank A/c

(Final Payment made to partners)

​

​

2,48,800

1,55,280

93,520

​

A’s Capital A/c

1,55,280

B’s Capital A/c

93,520

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

Realisation A/c (Sale of Assets)

2,62,000

BANK ACCOUNT

Date

Date

31/03/18

Realisation A/c (Creditors paid)

19,000

Realisation A/c (Expenses paid)

1,200

31/03/18

A’s Capital A/c

1,55,280

B’s Capital A/c

93,520

2,69,000

2,69,000

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Amount

Particulars

Amount

Particulars

Debtors

40,000

Stock

54,800

REALISATION ACCOUNT

Machinery

40,000

Land & Building

1,20,000

Creditors

20,000

Provision for Doubtful Debts

1,800

Bank (Assets realised)

2,62,000

Bank (Creditors paid)

19,000

Bank (Expenses paid)

1,200

2,83,800

2,83,800

8,800

Profit on realisation transferred to capital accounts :

A’s Capital A/c (3/5) 5,280

B’s Capital A/c (2/5) 3,520

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B

Particulars

Balance b/d

CAPITAL ACCOUNTS

A

1,50,000

Date

31/03/18

B

Particulars

A

Date

90,000

Realisation A/c

5,280

3,520

1,55,280

93,520

1,55,280

93,520

1,55,280

93,520

Bank A/c

(Final Payment)

31/03/18

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Amount

Particulars

Amount

Particulars

Balance b/d

7,000

Realisation A/c (Sale of Assets)

2,62,000

BANK ACCOUNT

Date

Date

31/03/18

Realisation A/c (Creditors paid)

19,000

Realisation A/c (Expenses paid)

1,200

31/03/18

A’s Capital A/c

1,55,280

B’s Capital A/c

93,520

2,69,000

2,69,000

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Mujeeb Rahiman C

HSST Commerce

GHSS Pattikkad

Malappuram Dt.

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Mujeeb Rahiman C

HSST Commerce

GHSS Pattikkad

Malappuram Dt.