Class 12 Accountancy - Chapter Dissolution of a Partnership Firm NCERT Solutions | State the accounting treatment at the ti
State the accounting treatment at the time of dissolution of a firm for:
i. Unrecorded assets ii. Unrecorded liabilities
(i) Accounting Treatment for Unrecorded Assets Unrecorded asset is an asset, which have not been shown in the books of account or which has been written off in the books of accounts, but the asset is still available in physical condition. Sometimes it is sold outside for cash and sometimes it is taken away by the partner. The accounting treatment for unrecorded asset will be there according
to the situation.
(a) When the unrecorded asset is sold for cash the following Journal Entry will be there:
Cash A/c. Dr.
To Realisation A/c
(Being unrecorded assets sold for cash)
(b) When the unrecorded asset is taken over by any partner the following Journal Entry will be there:
Partners Capital A/c Dr.
To Realisation A/c
(Being unrecorded assets taken over by the partner)
(ii) Accounting Treatment for Unrecorded Liabilities Unrecorded liabilities are
those liabilities, which have not been shown in the books of account. But at the time of dissolution they are required to be paid off. The following Journal Entry will be there as per situation.
(a) When the unrecorded liability is paid off the following Journal Entry will be there:
Realisation A/c. Dr.
To Cash A/c
(Being unrecorded liability paid in cash)
(b) When the unrecorded liability is taken over by a partner. The following
Journal Entry will be there:
Realisation A/c. Dr.
To Partners Capital A/c
(Being unrecorded liability taken over by the partner)
More Questions From Class 12 Accountancy - Chapter Dissolution of a Partnership Firm
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State the difference between dissolution of partnership and dissolution of partnership firm.
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On dissolution, how will you deal with partner’s loan if it appears on the
(a) assets side of the balance sheet, (b) liabilities side of balance sheet. - Q:-
What is a Realisation Account?
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How deficiency of crditors is paid off at the time of dissolution of firm.
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Reproduce the format of Realisation Account.
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State the order of settlement of accounts on dissolution.
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On what account realisation account differs from revaluation account.
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Distinguish between firm’s debts and partner’s private debts.
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Explain the process dissolution of partnership firm?
Popular Questions of Class 12 Accountancy
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Mohan and Shyam are partners in a firm. State whether the claim is valid if the partnership agreement is silent in the following matters:
(i) Mohan is an active partner. He wants a salary of Rs. 10,000 per year;
(ii) Shyam had advanced a loan to the firm. He claims interest @ 10% per annum;
(iii) Mohan has contributed Rs. 20,000 and Shyam Rs. 50,000 as capital. Mohan wants equal share in profits.
(iv) Shyam wants interest on capital to be credited @ 6% per annum. - Q:-
Identify various matters that need adjustments at the time of admission of a new partner.
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What are the different ways in which a partner can retire from the firm?
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State whether the following statements are true or false:
(i) Valid partnership can be formulated even without a written agreement between the partners;
(ii) Each partner carrying on the business is the principal as well as the agent for all the other partners;
(iii) Maximum number of partners can be 50;
(iv) Methods of settlement of dispute among the partners can’t be part of the partnership deed;
(v) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner;
(vi) Interest on partner’s loan is to be given @ 12% p.a. if the deed is silent about the rate. - Q:-
Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
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Write the various matters that need adjustments at the time of retirement of partner/partners.
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What is sacrificing ratio? Why is it calculated?
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On what occasions sacrificing ratio is used?
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If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?
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Why there is need for the revaluation of assets and liabilities on the admission of a partner?
Recently Viewed Questions of Class 12 Accountancy
- Q:-
Define Partnership Deed.
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State whether the following statements are true or false:
(i) Valid partnership can be formulated even without a written agreement between the partners;
(ii) Each partner carrying on the business is the principal as well as the agent for all the other partners;
(iii) Maximum number of partners can be 50;
(iv) Methods of settlement of dispute among the partners can’t be part of the partnership deed;
(v) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner;
(vi) Interest on partner’s loan is to be given @ 12% p.a. if the deed is silent about the rate. - Q:-
Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
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Explain why it is considered better to make a partnership agreement in writing.
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Reena and Raman are partners with capitals of Rs. 3,00,000 and Rs. 1,00,000 respectively. The profit for the year ended March 31, 2017 was Rs. 1,80,000, before paying rent for her personal building to be used as godown for firm to Reena payable at Rs. 5000 per month. Interest on capital is to be allowed at 6% p.a. Raman was entitled to a salary of Rs. 30,000 p.a. The drawings of partners were Rs. 30,000 and 20,000. The interest on drawings to be charged to Reena was Rs. 1,000 and to Raman, Rs. 500.
Assuming that Reena and Raman are equal partners. State their share of profit after necessary appropriations.
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Priya and Kajal are partners in a firm, sharing profits and losses in the ratio of 5:3. The balance in their fixed capital accounts, on April 1, 2016 were: Priya, Rs. 6,00,000 and Kajal, Rs. 8,00,000. The profit of the firm for the year ended March 31, 2017 was Rs, 1,26,000. Calculate their shares of profits: (a) when there is no agreement in respect of interest on capital, and (b) when there is an agreement that the interest on capital will be allowed @ 12% p.a.
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Write the various matters that need adjustments at the time of retirement of partner/partners.
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