What will be the accounting treatment of undistributed profits such as general reserve, credit balance of profit and loss account at the time of dissolution of firm?

Realisation account shows profit of Rs1,00,000. In which ratio will it be shared by the partners?

Verma and Sharma were partners sharing profits in the ratio of 3 : 1.  On 31-03-2011 their Balance Sheet was as follows :

                 Balance Sheets of Verma and Sharma

                            as on 31-03-2011

The firm was dissolved on 1-4-2011 and the Assets and Liabilities were settled as follows:

  (i) Creditors of Rs. 50,000 took over Land and Building in full settlement of their claim.

  (ii) Remaining Creditors were paid in cash.

  (iii) Machinery was sold at a depreciation of 30%.

  (iv) Debtors were collected at a cost of Rs. 500.

  (v) Expenses of realisation were Rs. 1,700.

Pass necessary Journal Entries for dissolution of the firm.

Angad, Raman and Harshit are partners in a firm.  They decided to dissolve their firm.  Pass necessary journal entries for the following after various assets (other than cash and bank) and their party liabilities have been transferred to Realisation Account.

(i) There was a stock of Rs. 90,000.  Raman took over 50% of the stock at 10% discount and remaining stock was sold at 40% profit on book value.

(ii) Profit and Loss Account was showing a credit balance of Rs. 15,000 which distributed among the partners.

(iii) A machinery which was not recorded in the books was sold for Rs. 2,000.

(iv) Angad was paid only Rs. 5,000 (in full settlement) for his loan to the firm which amounted to Rs. 5,500.

(v) Realisation expenses amount to Rs. 5,000 paid by Harshit.

(vi) There were 100 shares of Rs. 10 each in D.C.M.  Ltd. acquired at cost of Rs.1,200 which had been written off completely from the books.  These shares are valued at Rs. 9 each and divided among the partners in their profit sharing ratio.

Pass the necessary Journal entries for the following transactions on the dissolution of the firm of Sudha and Shiva after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account:

  (i) Sudha agreed to pay off her husband's loan Rs. 19,000

  (ii)A debtor whose debt of Rs. 9,300 was written off in the books paid Rs. 7,500 in full settlement.

  (iii) Shiva took over all investment at Rs. 13,300.

  (iv) Sundry creditors Rs. 10,000 were paid at 9% discount.

  (v) Realisation expenses Rs. 3,400 were paid by Sudha for which she was allowed Rs. 3,000.

  (vi) Loss on realisation Rs. 9,400 was divided between Sudha and Shiva in 3 : 2 ratio.

Anju, Manju and Sanju were partners in a firm sharing profits in the ratio of 2 : 2 : 1. On 28.2.2015, their Balance Sheet was a follow :

On this date, the firm was dissolved.  Anju was appointed to realise the assets.  Anju was to receive 5% Commission on the sale of assets (except cash) and was to bear all expenses of realisation.

Anju realised the assets as follows : Debtors Rs. 60,000, Stock Rs. 35,500, Investment Rs. 16,000, Plant 90% of the book value.  Expenses of relisation amounted to Rs. 7,500.  Commission received in advance was returned to the customers after deducting Rs. 3,000.

Firm has to pay Rs. 8,500 for Outstanding salary, not provided for earlier.  Compensation paid to employees amounted to Rs. 17,000.  This liability was not provided for in the above Balance Sheet.  Rs. 20,000 had to be paid for  provident fund.

Prepare Realisation Account, Capital Accounts of Partners and Bank Account.

A and B have been in business together for the last three years ending 31st March, 2015 at which date, they agreed to dissolve.  Their capital at the commencement of the three years before allowing 10% interest on capital were : 2012-13(profit) Rs.30,000, 2013-14 (profit) Rs. 22,200 and 2014-15 (loss) Rs. 5,380.  Drawings of each partner is Rs. 4,000 per year.  Creditors on the date of dissolution were Rs. 16,400.  The assets realised Rs. 85,000.  Expenses of dissolution amounted to Rs. 780.

Prepare (i) Capital Accounts before and after dissolution, (ii) Balance Sheet as on 31st March 2015, (iii) Bank A/c and (iv) Realisation Account.

Deepak, Kavita and kiran are partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1.  They decided to dissolve the partnership and appointed Deepak to realise the assets and pay the liabilities.  He is to receive 5% commission on the amounts finally paid to other partners as capital.  He was also to bear all the expenses of realisation.  The Balance Sheet of the firm on the date of dissolution was as follows:

Deepak realised the assets as follows: Debtors Rs. 24,000, Furniture Rs. 25,000, Machinery Rs. 80,000; stock at 60% of its book value and investments at 75% of its value. Expenses of realisation amounted to Rs. 2,000.  Firm had to pay Rs.5,000 for outstanding salaries not provided for earlier.  Commission received in advance is returned to the customer Rs. 25,000 had to be paid for employees' provident fund.
Prepare the necessary accounts.

The decision is Garner Vs Murray was given in:

Balance of realization A/c is transferred to the capital A/c of the partners in:

A person who declares by word of mouth as partner of the firm is called:

If no provision is made in agreement regarding the duration of the partnership:

Loss on realization is:

Loss on realization is distributed among partners:

If all the partners, but one, are solvent it is: