On dissolution of a firm, where is the bank overdraft transferred?
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Realisation Account.
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On dissolution of a firm, where is the bank overdraft transferred?
Realisation Account.
What happens when a partner is unable to contribute towards the deficiency of their capital account?
They are considered insolvent, and the unrecoverable amount is treated as a capital loss for the firm.
How much was realized from the sale of Plant and Machinery?
Rs. 4,250.
What is the first application of the firm's assets during dissolution?
To pay the debts of the firm to third parties.
Who agreed to bear all realization expenses?
Sita.
What is the journal entry for the sale of assets and recovery of bad debts?
Bank A/c Dr. 1,57,825 To Realisation A/c 1,57,825.
What were the actual expenses on realization paid by the firm?
Rs. 450.
What is the Realisation (loss) amount for Anju, Manju, and Sanju?
Anju: Rs. 21,360, Manju: Rs. 7,120, Sanju: Rs. 7,120.
Where is a partner’s loan account transferred upon dissolution of a firm?
Realisation Account.
What was the total amount realized from the sale of all assets?
Rs. 10,350.
How are unrecorded assets taken over by a partner shown in the accounts?
Credit of Realisation Account.
Where are unrecorded liabilities paid shown in the accounts?
Debit of Realisation Account.
What are some reasons for the dissolution of a partnership firm?
Retirement of a partner, death of a partner, insolvency of a partner, completion of the venture, and expiry of the partnership period.
What is the total amount of assets transferred in the Realisation Account?
1,17,925.
What was the amount of unrecorded investments?
Rs. 10,000.
What was the total amount of liabilities on the balance sheet?
Rs. 2,00,000.
What is the profit-sharing ratio among Sita, Rita, and Meeta?
2:2:1.
What was the total amount of liabilities in the balance sheet as of March 31, 2017?
Rs. 12,500.
What is the book value of the remuneration paid to Vibha?
Rs. 13,000.
How much profit was transferred to Supriya's Capital Account?
1,755.
What entry is made when a creditor accepts an asset as part payment?
Realisation A/c Dr. To Bank A/c for the cash payment.
How much was the dissolution expense paid by Anubha?
Rs. 7,800.
What happens when a creditor accepts an asset worth more than the amount due?
The excess amount will be credited to the Realisation Account.
How are liabilities like creditors treated in the absence of payment information after being transferred to the Realisation Account?
Never paid.
According to the Garner vs. Murray case, how is a capital loss borne by solvent partners?
It is borne in the ratio of their capitals as on the date of dissolution.
What is the total amount realized from assets in the Realisation Account?
3,17,500.
How much less were the debtors recovered during the dissolution?
5% less than the recorded amount.
What is the journal entry for the transfer of liabilities to the Realisation Account?
Liabilities (individually) Dr. To Realisation A/c.
To where are accumulated profits and reserves transferred during dissolution?
Partners’ Capital Accounts.
What remuneration was allowed to Shobha for dissolution work?
Rs. 15,000.
What types of assets are transferred to the Realisation Account?
All assets except cash in hand, bank balance, and fictitious assets.
What was the reason for dissolving the partnership firm?
The partners decided to dissolve the firm.
What happens to a Partner’s Capital Account if a partner takes over an asset?
The Partner’s Capital Account is debited.
What is the requirement when a creditor accepts a fixed asset in payment of his dues?
No entry is required.
How much did the debtors realize after a 5% discount?
Rs. 20,425.
If a firm agrees to pay a partner a fixed amount for realisation work, where is this amount debited?
It is debited to the Realisation Account.
What is the total amount of Sonu's capital in the Partners Capital Accounts?
Rs. 1,22,900.
How much does Anju agree to pay for the debtors amounting to Rs. 2,00,000?
Rs. 1,85,000.
What was the amount settled for the bank loan?
Rs. 1,30,000.
How much did Romesh pay for the investments he took over?
Rs. 8,100.
What were the realisation expenses incurred?
Rs. 1,500.
What type of liabilities are transferred to the Credit side of the Realisation Account?
All external liabilities.
How are accumulated losses transferred to Capital Accounts?
In profit sharing ratio.
What is the journal entry for a liability that a partner takes responsibility to discharge?
Realisation A/c Dr. To Partner’s Capital A/c.
What is prepared to ascertain the net effect of realisation of assets and payment of liabilities during dissolution?
A Realisation Account.
How should the assets be applied after paying the firm's debts?
To pay each partner proportionately for advances, then for capital, and finally divide any residue among partners in their profit sharing ratio.
What is the total amount of liabilities in the balance sheet?
Rs. 1,05,500.
What were the final amounts paid to Supriya and Monika?
42,355 to Supriya and 18,070 to Monika.
What was the agreed value for the plant and machinery taken over by Sonu?
60,000.
What was the value of the unrecorded asset taken over by Rita?
Rs. 200.
What were the realisation expenses recorded in the Realisation Account?
1,500.
What is the balance in the Realisation Account termed as?
Profit or loss on realisation.
What is the significance of the General Reserve Account in the dissolution process?
To transfer profit in realisation to partners' capital accounts.
What percentage discount was given to other creditors?
10%.
What is the entry for dissolution expenses paid by the firm?
Realisation A/c Dr. 6,500 To Cash / Bank A/c 6,500.
What is the total amount recorded in the Realisation Account for Sonu and Ashu?
Rs. 2,14,900.
What are the total assets listed in the Realisation Account?
Stock, Furniture, Debtors, Plant and Machinery.
What is the entry when a partner pays realisation expenses on behalf of the firm?
Realisation A/c Dr. To Partner’s Capital A/c.
What is the order of applying the property of the firm and private property of partners when both debts exist?
Firm's property is applied first to firm debts, then surplus is divided among partners for private liabilities; private property is applied first to private debts.
What is transferred to the Debit side of the Realisation Account?
All assets (except cash/bank and fictitious assets).
What is the purpose of the Realisation Account in the dissolution of a partnership firm?
To record the realization of assets and settlement of liabilities.
What amount was paid to creditors and for realisation expenses?
49,500.
When realisation expenses are paid by the firm on behalf of a partner, where are these expenses debited?
Realisation Account.
What is the profit-sharing ratio between Supriya and Monika?
3:2.
What is the journal entry for the closure of asset accounts during the dissolution of a partnership firm?
Debit all asset accounts and credit the Realisation Account.
What is the total amount of liabilities in the balance sheet of Anju, Manju, and Sanju as of March 31, 2017?
Rs. 4,85,000.
What is the precedence of secured loans over unsecured loans during dissolution?
Secured loans have precedence over unsecured loans.
What is the journal entry for the settlement of any unrecorded liability?
Realisation A/c Dr. To Bank A/c.
What is one reason for the dissolution of a partnership?
When a partner is guilty of misconduct likely to adversely affect the business.
What triggers the reconstitution of a partnership firm?
Admission, retirement, or death of a partner.
What happens to the business during the dissolution of a partnership?
The business is not terminated.
What is the profit transferred to Sonu's and Ashu's capital accounts?
Rs. 900 to Sonu and Rs. 300 to Ashu.
What was the total amount of liabilities in the Balance Sheet of Sumit, Amit, and Vinit?
Rs. 2,90,000.
What discount was applied to creditors and bills payable?
10%.
What is the purpose of the Realisation Account in partnership accounts?
To transfer assets and liabilities during the dissolution of a partnership.
What is the purpose of the Realisation Account in the dissolution of a partnership firm?
To record the assets and liabilities during the dissolution process.
How are sundry debtors treated in the Realisation Account?
Transferred at gross value, with the provision for doubtful debts credited to the Realisation Account.
What amount was recorded as an unrecorded liability in the Realisation Account?
20,000 (Bhawan loan).
What entry is made when Nayana takes over half of the stock at a discount?
Nayana’s Current A/c Dr. 15,750 To Realisation A/c 15,750.
What should be done if the firm's assets are insufficient to cover its liabilities?
Partners must contribute from their net private assets.
What amount was credited to the Bank Account from Manju's capital?
Rs. 1,40,120.
How are partner’s capital accounts closed on dissolution of the firm?
Through Realisation Account.
What entry is made when a partner takes over an asset?
Partner’s Capital A/c Dr. To Realisation A/c.
How much stock did Nayana take over during the dissolution?
50% of the stock at 10% less than its book value.
What happens to a firm upon dissolution?
The firm ceases to conduct business and must settle its accounts.
How are losses treated during the dissolution of a partnership?
Losses are paid first out of profits, then out of partners' capital, and lastly by partners individually in their profit sharing ratio.
How are asset accounts closed in the Realisation Account?
By transferring them to the debit of Realisation Account at their book values, excluding cash and bank.
What was the total profit in realisation transferred to partners' capital accounts?
13,500.
What does the Realisation Account record?
The sale of assets, payment of liabilities, and realisation expenses.
What is the journal entry for the closure of liability accounts during the dissolution of a partnership firm?
Debit the Realisation Account and credit all liability accounts.
How is the profit or loss on realisation transferred?
It is transferred to partners’ capital accounts in their profit sharing ratio.
Can a partnership firm be dissolved without court intervention?
Yes, it can be dissolved without court intervention or by court order.
How is the realisation profit transferred to partners' current accounts?
Realisation A/c Dr. 15,575 To Nayana’s Current A/c 5,788 To Arushi’s Current A/c 5,787.
What is the journal entry for the settlement of a creditor by transferring fixed assets?
Debit the Creditor's Account and credit the relevant Asset Account.
What is the journal entry for a loss on realisation?
Partners’ Capital A/c (individually) Dr. To Realisation A/c.
What is the journal entry for expenses of realisation paid by a partner on behalf of the firm?
Debit the Realisation Account and credit the Partner's Capital Account.
How much did Amit take over his wife's loan during the dissolution?
Rs. 40,000.
What was the total amount of sundry creditors recorded?
48,000.
What happens to a Partner’s Capital Account if a liability is assumed by that partner?
The Partner’s Capital Account is credited.
What is the profit-sharing ratio among Sonia, Rohit, and Udit?
5:3:2.
What happens when a creditor accepts an asset worth more than the due amount?
Bank A/c Dr. To Realisation A/c for the difference.
What is the journal entry for payment of realisation expenses incurred by the firm?
Realisation A/c Dr. To Bank A/c.
What is the total capital of Nayana and Arushi as of March 31, 2017?
Rs. 1,50,000 (Nayana: Rs. 1,00,000 + Arushi: Rs. 50,000).
How is profit on realisation transferred to partners' capital accounts?
Realisation A/c Dr. To Partners’ Capital A/c (individually).
How much did the creditors receive after the 2% deduction?
Rs. 1,960.
What is the entry for transferring the Workman Compensation Reserve to partners' current accounts?
Workman Compensation Reserve A/c Dr. 15,000 To Nayana’s Current A/c 7,500 To Arushi’s Current A/c 7,500.
What does the private property of a partner exclude?
The personal properties of the partner's wife and children.
What is the journal entry for the realisation of unrecorded assets including goodwill?
Bank A/c Dr. To Realisation A/c.
How much did Rohit pay for the realisation expenses?
Rs. 12,000.
What was the selling price of the machinery during the dissolution?
Rs. 70,000.
What was the total amount realized from the sale of stock?
Rs. 1,50,000.
What is the final entry for paying the amounts due to partners?
Nayana’s Capital A/c Dr. 87,538 Arushi’s Capital A/c Dr. 73,287 To Bank A/c 1,60,825.
What is the journal entry for the payment of loans due to partners?
Partner’s Loan A/c Dr. To Bank A/c.
What was the total amount of assets in Romesh and Bhawan's Balance Sheet?
5,00,000 Rs.
What is the amount of the bank loan listed in the liabilities?
60,000 Rs.
Can the court order a firm to be dissolved when a partner becomes insane?
Yes.
What was Anubha's remuneration for overseeing the dissolution process in case (e)?
Rs. 12,000.
What was the limit of dissolution expenses that Anubha agreed to bear in case (f)?
Rs. 6,000.
What is the initial balance in the Bank Account for the year 2017?
30,000 (Dr.).
What is the total amount of the Realisation (assets) in the dissolution of the partnership firm?
Rs. 2,63,000.
What was the total amount of liabilities in the Balance Sheet as of March 31, 2017?
Rs. 2,70,000.
What is the total amount of assets in the balance sheet of Anju, Manju, and Sanju as of March 31, 2017?
Rs. 5,80,000.
What was the realized amount for stock?
Rs. 7,000.
Where is the fixed amount for realisation work credited?
It is credited to the Capital Account.
What is the entry for Anubha's remuneration?
Realisation A/c Dr. 12,000 To Anubha's Capital A/c 12,000.
What percentage of book value does Sanju take over the remaining debtors?
80%.
How much did Anubha pay in dissolution expenses on behalf of the firm?
Rs. 9,500.
What is the accounting treatment when a firm is dissolved?
The books of account are closed, and profit or loss from realisation is computed.
What is the journal entry when a partner discharges the liability of the firm?
Debit the Liability Account and credit the Partner's Capital Account.
What was the total amount of the bank loan paid by Bhawan?
Rs. 60,000 plus one year interest at 6%.
How much did the furniture realize during the dissolution?
Rs. 30,000.
How much loss is transferred to Anju's capital account?
Rs. 21,360.
What are the activities involved in winding up a dissolved partnership firm?
Selling the firm's assets, paying liabilities, and discharging claims of the partners.
What was the total amount realized from the sale of machinery?
Rs. 48,000.
What must the aggregate amount payable to partners equal?
The amount available in bank and cash accounts.
What is the entry for remuneration given to Vibha?
Realisation A/c Dr. 12,000 To Vibha's Capital A/c 12,000.
What was the selling price of the building during the dissolution?
Rs. 51,000.
What is the journal entry for the sale of assets during the dissolution of a partnership firm?
Debit the Bank Account and credit the Realisation Account.
What is the journal entry for the sale of assets?
Bank A/c Dr. To Realisation A/c.
What happens to the partnership when a firm is dissolved?
Dissolution of the firm necessarily brings in dissolution of the partnership.
What is done with assets and liabilities during the dissolution of a firm?
Assets are sold and liabilities are paid off.
What is the total amount of liabilities recorded in the Realisation Account?
Rs. 81,600.
What is the book value of the buildings that Manju takes over after the 10% deduction?
Rs. 1,80,000.
What is the entry for remuneration payable to Anubha?
Realisation A/c Dr. 8,500 To Anubha's Capital A/c 8,500.
How are accumulated profits transferred to partners' capital accounts?
General Reserve A/c Dr. To Partners’ Capital A/c (individually).
What is the journal entry for the payment of a partner's loan during dissolution?
Debit the Partner's Loan Account and credit the Bank Account.
Is the closure of books required during the dissolution of a partnership?
No, because the business is not terminated.
What is the journal entry for transferring liabilities to the Realisation Account?
Debit Sundry Creditors A/c Rs. 48,000; Debit Provision for Doubtful Debts A/c Rs. 500; Credit Realisation A/c Rs. 48,500.
Under what circumstances can a court order the dissolution of a partnership firm?
When a partner becomes insane or permanently incapable of performing their duties.
What is the meaning of dissolution of a partnership firm?
It refers to the end of the partnership relationship among all partners.
What is the total amount of capital for Bhawan?
2,00,000 Rs.
How much was realized from the sale of buildings?
Rs. 1,90,000.
How much was the stock sold for?
42,000.
What happens to the existing partnership when a partner is admitted, retires, or dies?
The existing partnership is dissolved, but the firm may continue under the same name if the partners decide.
Is a partner's loan transferred in the Realisation Account?
No, it is not transferred.
What was the total profit transferred to the partners' capital accounts?
Rs. 530.
What entry is made for transferring Arushi's current account balance to her capital account?
Arushi Current A/c Dr. 23,287 To Arushi’s Capital A/c 23,287.
What is the profit-sharing ratio among Anju, Manju, and Sanju?
3:1:1.
What is the profit-sharing ratio between Romesh and Bhawan?
3:2.
What is the total amount of liabilities in the Balance Sheet of Sonu and Ashu?
2,08,000.
What was the total loss transferred to Romesh and Bhawan's capital accounts?
Rs. 19,000.
What changes can lead to the dissolution of a partnership?
Change in existing profit-sharing ratio among partners or admission of a new partner.
What was the total amount of assets in the Balance Sheet as of March 31, 2017?
Rs. 6,60,000.
What is the journal entry for transferring assets to the Realisation Account?
Debit Realisation A/c Rs. 1,60,000; Credit Debtors, Stock, Furniture, and Machinery.
What were the actual dissolution expenses paid by the firm in case (e)?
Rs. 9,500.
What were the actual expenses paid by Anubha in case (f)?
Rs. 7,600.
What is the entry for agreed remuneration to a partner undertaking dissolution work?
Realisation A/c Dr. To Partner’s Capital A/c.
How is the payment of liabilities recorded in the Realisation Account?
Realisation A/c Dr. To Bank A/c, with the same value as the amount assets are taken over.
What constitutes compulsory dissolution of a firm?
Insolvency of all partners, illegality of the business, or events making it unlawful to continue the partnership.
What is the journal entry for transferring Nayana's current account balance to her capital account?
Nayana Capital A/c Dr. 12,462 To Nayana’s Current A/c 12,462.
What are some contingencies that can lead to the dissolution of a firm?
Expiry of a fixed term, completion of ventures, death of a partner, or adjudication of a partner as insolvent.
What was the realization amount for machinery?
Rs. 50,000.
What are the total assets and liabilities recorded in the Realisation Account?
Total assets: 1,98,575; Total liabilities: 1,98,575.
What was the amount of the creditor that was not claimed?
Rs. 2,600.
Does the dissolution of a firm necessarily involve the dissolution of partnership?
True.
What happens to all accounts of a firm in case of dissolution?
All accounts are closed.
What was the amount of stock listed in the assets?
2,00,000 Rs.
What was the realized amount for fixed assets?
Rs. 42,000.
What is one way a firm can be dissolved by agreement?
With the consent of all partners or in accordance with a contract between them.
Does the court intervene in the dissolution of a partnership?
No, because it is dissolved by mutual agreement.
What are the total expenses of dissolution?
Rs. 2,200.
What is the significance of the Bank Account in the dissolution process?
To record cash transactions related to the dissolution.
What was the value of stock taken by Ashwani?
Rs. 8,000.
What was the total amount of assets realized from the investments?
Rs. 1,00,000 (given to creditors) + Rs. 45,000 (taken over by Vinit).
What entry is made when a partner brings in cash for a debit balance in their capital account?
Bank A/c Dr. To Partner’s Capital A/c.
What is the amount of dissolution expenses in case (a)?
Rs. 6,500.
What remuneration was given to Vibha for overseeing the dissolution process in case (c)?
Rs. 12,000.
What was the amount of investments listed in the assets?
1,40,000 Rs.
What was the amount received from debtors taken over by Ashu?
69,000.
According to Section 39 of the Partnership Act 1932, what is the dissolution of partnership between all partners called?
Dissolution of the firm.
What discount was given when paying creditors?
What is the entry for dissolution expenses paid by Anubha on behalf of the firm?
Realisation A/c Dr. 1,600 To Anubha's Capital A/c 1,600.
What is the total amount of stock taken over by Manju at book value?
Rs. 83,000.
What is the journal entry for the realization of assets?
Debit Bank A/c Rs. 69,425; Credit Realisation A/c Rs. 69,425.
How is the balance paid to partners whose capital accounts show a credit balance?
Partners’ Capitals A/cs (individually) Dr. To Bank A/c.
What was the amount of cash at bank listed in the assets?
30,000 Rs.
What is the entry for the settlement of a loan by a firm to a partner?
Bank A/c Dr. To Loan to Partners A/c.
How much were the sundry creditors paid?
In full, Rs. 48,000.
What was the agreed value for the remaining investments taken over by Vinit?
Rs. 45,000.
How can a partnership at will be dissolved?
If any partner gives written notice to the others signifying their intention to dissolve the firm.
What percentage of debtors was realized?
90%.
What was the amount recovered for bad debts written off last year?
Rs. 1,200.
Who paid the dissolution expenses in case (b)?
Anubha.
What was Shobha's remuneration for overseeing the dissolution work in case (d)?
Rs. 15,000.
To which accounts are partner's current accounts transferred?
To the respective Partners' Capital Accounts.
What happens to the economic relationship between partners during the dissolution of a partnership?
It continues, though in a changed form.
What is the journal entry for transferring assets to the Realisation Account?
Debit Realisation A/c Rs. 65,500; Credit Stock A/c Rs. 7,500, Sundry Debtors A/c Rs. 21,500, Fixed Assets A/c Rs. 36,500.
What was the total amount of liabilities in Romesh and Bhawan's Balance Sheet?
3,00,000 Rs.
What is the profit-sharing ratio between Sonu and Ashu?
3:1.
What is the total amount of loss transferred to the capital accounts of Manju and Sanju?
Rs. 7,120 each.
What was the outstanding bill for repairs that had to be paid?
Rs. 2,000.
Is it true that dissolution of partnership cannot take place without court intervention?
False.
How much did Shobha agree to bear in dissolution expenses in case (d)?
Actual expenses paid by her amounted to Rs. 11,800.
What was the selling price of the remaining stock after Nayana took over?
Sold at a gain of 15%.
What is the key difference recognized by the Partnership Act regarding dissolution?
The difference between the breaking of relationships among all partners versus some partners.
What occurs after the dissolution of a partnership firm?
The existence of the firm ends, and no business is transacted except for activities related to closing the firm.
What was the loss transferred to Sonia's capital account?
Rs. 21,500.
Is it true that a partnership is dissolved when there is a death of a partner?
True.
What was the book value of the investments taken over by Bhawan?
90% of the book value less Rs. 900 discount.
What were the realisation expenses incurred?
Rs. 2,000.
What was Vibha's remuneration for overseeing the dissolution work in case (g)?
Rs. 14,000.
What were the total realisation expenses?
1,600.
What is the entry for transferring fictitious assets to partners' capital accounts?
Partners’ Capital A/c (individually) Dr. To Fictitious Asset A/c.
What is the journal entry for the settlement of capital accounts during dissolution?
Debit the Partner's Capital Accounts and credit the Bank Account.
How much did Bharat realize from debtors?
Rs. 38,000.
Can a firm be compulsorily dissolved when a partner decides to retire?
False.
What is the total amount of capital for Romesh?
1,00,000 Rs.
What is the journal entry for transferring liabilities to the Realisation Account?
Debit Creditors A/c Rs. 20,000; Debit Bank overdraft A/c Rs. 5,000; Credit Realisation A/c Rs. 25,000.
What was Anubha's remuneration for overseeing the dissolution work in case (f)?
Rs. 8,500.
What was the total amount of creditors in the Balance Sheet of Ashwani and Bharat?
Rs. 76,000.
What was the amount of the unrecorded liability that was paid?
Rs. 5,000.
What is the amount of loan recorded in the Realisation Account?
Rs. 12,000.
What was the realisation amount for buildings?
Rs. 1,30,000.
What is one of the learning objectives related to dissolution of partnership?
Differentiate between dissolution of partnership and dissolution of a partnership firm.
What was the amount of creditors listed in the liabilities?
80,000 Rs.
What was the total amount of bills payable listed in the liabilities?
40,000 Rs.
