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Sample Questions - Dissolution of a Partnership Firm | Crash Course of Accountancy - Class 12 - Commerce PDF Download

                                                                   Dissolution Test

Time – 50 mins

M.M.- 30

Q1. Write one distinction between dissolution of partnership and dissolution of firm? (1 mark)

Q2. Hema and Garima were partners in a firm sharing profits in the ratio of 3:2 . On March 31, 2015, their Balance Sheet was as follows:

Liabilities


Assets


Creditors

36,000

Bank

40,000

Garima's Husband's Loan

60,000

Debtors

76,000

Hema's Loan

40,000

Stock

2,00,000

Capitals:


Furniture

20,000

Hema 2,00,000

Garima 1,00,000

3,00,000

Leasehold Premises

1,00,000

On the above date the firm was dissolved. The various assets were realized and liabilities were settled as under:
(i) Garima agreed to pay her husband’s loan.
(ii) Leasehold Premises realized 1,50,000 and Debtors 2,000 less.
(iii) Half the creditors agreed to accept furniture of the firm as full settlement of their claim and remaining half agreed to accept 5% less.
(iv) 50% Stock was taken over by Hema on cash payment of 90,000 and remaining stock was sold for 94,000.
(v) Realisation expenses of 10,000 were paid by Garima on behalf of firm.
(vi) Pass necessary journal entries for the dissolution of the firm. (6 mark)

Q3. Parul, Payal and Pooja are partners. They decided to dissolve their firm. Pass necessary Journal entries for the following after various Assets (other than Cash and Bank) and the third party liabilities have been transferred to Realisation Account:
(a) There were total Debtors of Rs. 76,000. A Provision of Bad and Doubtful Debts also stood in the books at Rs. 6,000. Rs. 12,000 Debtors proved bad and rest paid the amount due.
(b) Parul agreed to pay off her husband's loan of Rs. 7,000 at a discount of 5%.
(c) The book value of assets (other than cash and bank) transferred to Realization Account is Rs. 1,00,000. 50% of the assets are taken over by a partner pooja, 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, realized nothing and remaining assets are handed over to a Creditor, in full settlement of his claim. (d) The firm had a debit balance of Rs. 27,000 in the Profit and Loss Account on the date of dissolution. ( e ) Pooja paid realisation expenses of Rs. 15,000 out of her pocket and she was to get a remuneration of Rs. 18,000 for completing the dissolution process. (5 mark)

Q4. Pass the necessary entries at the dissolution a partnership firm of Zulu and Bholu a. Realization expenses amounted to Rs.5000 were paid by the partner Bholu. b. Bholu was entitled a commission of Rs.2000 for the realization expenses which were Rs.5500. c. Realization expenses were Rs.4000 paid by the firm on behalf of Bholu who was given a commission of Rs.3000 for the same. d. Zulu was paid a commission of Rs.600 for the realization expenses and the actual expenses were Rs.480 paid by zulu by his private funds. e. Zulu decided took over the business in which assets realized Rs.60000 and liabilities amounted to Rs.10000. f. Loan from zulu to the firm was Rs.9000 and his capital account shows a debit balance of Rs.1000.    (6 mark)

Q5. Romesh and Bhawan were in partnership sharing profit and losses as 3:2. Their Balance Sheet as on March 31, 2012, was as follows:
Balance Sheet of Romesh and Bhawan as on March 31, 2012
Sample Questions - Dissolution of a Partnership Firm | Crash Course of Accountancy - Class 12 - Commerce

They decided to dissolve the firm. The following information is available:
1. Debtors were recovered 5% less. Stock was realised at books value and building was sold for Rs.51,000,
2. It is found that investment not recorded in the books amounted to Rs.10,000. The same were accepted by one creditor for this amount and other Creditors were paid at a discount of 10%. Bills payable were paid full,
3. Romesh took over some of the Investments at Rs.8,100 (book value less 10%). The remaining investment were taken over by Bhawan at 90% of the book value less Rs.900 discount,
4. Bhawan paid bank loan along with one year interest at 6% p.a, 5. An unrecorded liability of Rs.5,000 paid. Pass entires for dissolution. (6 mark)

Q6. 
Sample Questions - Dissolution of a Partnership Firm | Crash Course of Accountancy - Class 12 - Commerce
Sample Questions - Dissolution of a Partnership Firm | Crash Course of Accountancy - Class 12 - Commerce(6 mark)

The document Sample Questions - Dissolution of a Partnership Firm | Crash Course of Accountancy - Class 12 - Commerce is a part of the Commerce Course Crash Course of Accountancy - Class 12.
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FAQs on Sample Questions - Dissolution of a Partnership Firm - Crash Course of Accountancy - Class 12 - Commerce

1. What is the meaning of dissolution of a partnership firm?
Ans. Dissolution of a partnership firm refers to the process of ending a partnership agreement and the business operations of the firm. It involves settling the accounts, distributing the assets and liabilities among the partners, and terminating the legal relationship between them.
2. What are the reasons for the dissolution of a partnership firm?
Ans. There can be several reasons for the dissolution of a partnership firm, including: - Mutual agreement among the partners to end the business. - Expiry of the partnership term as specified in the agreement. - Death or retirement of a partner. - Insolvency or bankruptcy of a partner. - Misconduct or breach of partnership agreement by a partner. - Change in the business environment or objectives.
3. What is the process of settling accounts during the dissolution of a partnership firm?
Ans. During the dissolution of a partnership firm, the process of settling accounts involves the following steps: - Preparing a final account statement, which includes the value of all assets and liabilities of the firm. - Determining the capital balances of each partner based on their contributions and share in profits/losses. - Distributing the assets of the firm among the partners according to their capital balances. - Settling the liabilities of the firm, including payment to creditors. - If there is any surplus remaining after settling liabilities, it is distributed among the partners based on their profit-sharing ratio.
4. What are the legal formalities involved in the dissolution of a partnership firm?
Ans. The legal formalities involved in the dissolution of a partnership firm may vary depending on the jurisdiction and the terms of the partnership agreement. However, some common legal formalities include: - Giving public notice of the dissolution in newspapers or other designated publications. - Informing the registrar of firms about the dissolution and submitting the necessary documents. - Settling any pending legal disputes or claims against the firm. - Cancelling or transferring licenses, permits, or registrations associated with the firm. - Updating tax registrations and fulfilling tax obligations.
5. Can a dissolved partnership firm be revived or reconstituted?
Ans. Yes, a dissolved partnership firm can be revived or reconstituted under certain circumstances. If the dissolution was due to a mutual agreement among the partners or the expiry of the partnership term, the partners can choose to revive the firm by entering into a new partnership agreement. However, if the dissolution was due to death, retirement, or insolvency of a partner, the firm may need to be reconstituted with new partners. The process of revival or reconstitution may involve modifying the existing partnership agreement and fulfilling any legal formalities required by the jurisdiction.
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