CBSE Board Exam 2020: Check Important Questions & Answers for Class 12 Accountancy - Chapter 5 (Dissolution of Partnership Firm)
If you are appearing for CBSE Class 12th Board exams 2020, check this list of important questions and answers from Chapter 5 of Accountancy.
CBSE Class 12th Accountancy exam is scheduled for 5th March 2020. In this article we have complied a list of important questions from Chapter 5: Dissolution of Partnership Firm. Questions given below are important questions and are expected to be asked in Class 12 Accountancy board exam 2019-20
Ques1 Pass the necessary journal entry for treatment of Partner’s loan appearing on the asset side of the Balance Sheet in case of dissolution of a partnership firm.
Solution Partner’s Capital A/c Dr.
To Partner’s Loan A/c
(Being Partner’s Loan transferred to Partner’s Capital Account)
Ques 2 Varun and Arun are partners in a firm sharing profits and losses equally. On the date of dissolution of the partnership firm, Varun’s wife’sloan was Rs. 45,000, whereas Arun’s loan was Rs. 65,000. Which loan will be paid first and why ?
Solution Varun’s wife’s loan will be paid first as it’s an outside liability (third party liability)
Ques 3 At the time of dissolution of a partnership firm, the book value of sundry assets transferred to Realisation Account was Rs. 2,00,000. 50% of these sundry assets were taken by partner A at 20% discount, 40% of remaining assets were sold at a profit of 30% on cost. 5% of the balance was found obsolete and realised nothing. The remaining assets were taken over by a creditor in full settlement of his claim. Pass necessary journal entries for the above.
Cash/Bank A/c Dr 52,000
A's Capital A/c Dr 80,000
To Realisation A/c 1,32,000
(Being Assets realised and some taken over by Partner A).
Ques 4 Ashish and Kanav were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2018 their Balance Sheet was as follows :
On the above date they decided to dissolve the firm.
(i) Ashish agreed to take over furniture at Rs. 38,000 and pay off Mrs. Ashish’s loan.
(ii) Debtors realised Rs. 18,500 and plant realised 10% more.
(iii) Kanav took over 40% of the stock at 20% less than the book value. Remaining stock was sold at a gain of 10%.
(iv) Trade creditors took over investments in full settlement.
(v) Kanav agreed to take over the responsibility of completing dissolution at an agreed remuneration of Rs. 12,000 and to bear realization expenses. Actual expenses of realization amounted to Rs. 8,000. Prepare Revaluation Account.
Ques 5 Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3 : 2. On 31st March, 2018 the firm was dissolved. After the transfer of assets (other than cash in hand and at bank) and third party liabilities to the Realization Account, the following information was provided :
(i) Furniture of Rs. 70,000 was sold for Rs. 68,000 by auction and auctioneer’s commission amounted to Rs. 2,000.
(ii) Adiraj’s loan amounting to Rs. 35,000 was paid.
(iii) Out of the stock of Rs. 80,000, Karan 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.
(iv) A bills receivable of Rs. 3,000 under discount was dishonoured as the acceptor had become insolvent and hence the bill had to be met by the firm.
(v) Profit and Loss Account showed a debit balance of Rs. 56,000.
(vi) Realization expenses amounted to Rs. 2,000 which were paid byAdiraj.
Pass the necessary journal entries for the above transactions on the dissolution of the firm.
Ques 6 State any two grounds on the basis of which court may order for the dissolution of partnership firm.
Solution At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:
(a) when a partner becomes insane;
(b) when a partner becomes permanently incapable of performing his duties as a partner;
(c) when a partner is guilty of misconduct which is likely to adversely affect the business of the firm;
(d) when a partner persistently commits breach of partnership agreement;
(e) when a partner has transferred the whole of his interest in the firm to a third party;
(f) when the business of the firm cannot be carried on except at a loss; or
(g) when, on any ground, the court regards dissolution to be just and equitable.
Ques 7 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 Rs. 6,00,000 was taken over by Gaurav at 50% and stock worth Rs. 5,000 was taken over by a creditor of Rs. 9,000 in full settlement of his claim.
(ii) Land and building (book value Rs. 3,00,000) was sold for Rs. 4,00,000 through a broker who charged 2 % commission.
(iii) The remaining creditors were paid Rs. 76,000 in full settlement of their claim and the remaining assets were taken over by Vaibhav for Rs. 17,000.
(iv) Bank loan of Rs. 3,00,000 was paid along with interest of Rs. 21,000.
Pass necessary journal entries for the above transactions in the books of the firm.
Ques 8 Give the accounting entry for unrecorded assets in case of reconstitution of a partnership firm.
Solution Sundry Assets Dr.
To Revaluation A/c
(Being Unrecorded asset recorded)
Ques 9 State any two situations when a partnership firm can be compulsorily dissolved.
Solution A firm is compulsorily dissolved in the following cases:
(i) When all the partners or all but one partner become insolvent.
(ii) When the business of the firm becomes illegal
(iii) When some event has taken place which makes the business of the firm unlawful for the partners to carry on the business.
Ques 10 Michael, Jackson and John were partners in a firm sharing profits in the ratio of 3 : 1 : 1. On 31st March, 2017, they decided to dissolve their firm. On that date their Balance Sheet was as follows :
It was agreed that :
(i) Michael was to take over Furniture at Rs. 2,600 and Debtors amounting to Rs. 40,000 at Rs. 34,400 and the Creditors of Rs. 10,000 were to be paid by him at this figure.
(ii) Jackson was to take over all the stock in trade at Rs. 14,000 and some of the other Sundry Assets at Rs. 28,800 (being 10% less than book value).
(iii) John was to take over the remaining Sundry Assets at 90% of the book value and assumed the responsibility for the discharge of the loan.
(iv) The remaining debtors were sold to a debt collecting agency for 50% of the book value. The expenses of dissolution Rs. 600 were paid by John.
Prepare Realisation Account, Bank Account and Partners’ Capital Accounts.