T S Grewal Solutions 2026-27 [Class 12] – Dissolution of a Partnership Firm – Q 01 to 10

Solution for Q 01 to 10 of Chapter 7 of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Dissolution of a Partnership Firm from Partnership Accounts class 12. These Solutions are based on topics Journal entries at the time of dissolution.

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.

These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 1

Mrs X is an outsider

Outsider loans are always paid before partner loan

Order	Whose loan	Amount
1	Mrs X Loan	500000
2	Y Loan	250000

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Question 10

Here question specifically ask to pass the entry after all assets and liabilities are already transferred

So we will pass entries only for settlement

a)	Bank A/c Dr..	88000
	To Realization A/c		88000
	(Being amount realized from debtor earlier w/o as bad)

b)	No entry for settlement of creditor against stock
	For Balance payment following entry will be passed :
	Realization A/c Dr..	50000
	To Bank A/c		50000
	(Being amount paid to creditor, (121000 - 71000))

c)	Raja Loan A/c Dr..	18000
	To Cash A/c		17000
	To Realization A/c		1000
	(Being amount paid for Raja Loan A/c)

	Note : Any outside liability is closed thorugh realization A/c
	So any profit/loss gets automatically adjusted in realization A/c
	But partner's loan is not paid through realization A/c
	So any profit/loss to be separately transferred to realization
	as firm has earned profit dueto less payment of liability

d)	Simar Capital A/c Dr..	52000
	To Realization A/c		52000
	(Bein investments taken over by Simar)

	Bank A/c Dr..	12000
	To Realization A/c		12000
	(Being investments sold, entry to be made at amount realised)

e)	Realization A/c Dr..	19000
	To Cash A/c		19000
	(Being realization expenses paid by firm)

f)	Realization A/c Dr..	30000
	To Simar Capital A/c		12000
	To Raja Capital A/c		12000
	To Rita Capital A/c		6000
	(Being profit on dissolution distributed)

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Question 2

Assets realised	1500000

Order	Liability	Amount
1	Om's Loan	125000	(Outsider)
2	Creditors	250000	(Outsider)
3	Ajay's Loan	200000	Partner Loan
4	Ajay Capital	400000	Partner capital
5	Vijay Capital	350000	Partner capital
	Total	1325000

Excess (1500000 - 1325000) = 175000

To be distributed between Ajay and Vijay in profit ratio

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Question 3

Sanjay Capital A/c Dr..	15000
To Realization A/c		15000
(Being unrecorded furniture taken over by partner)

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Question 4

a)	Realization A/c Dr..	160000
	To Land and Buildings A/c		160000
	(Being Land and Building transferred to realization A/c)

b)	Bank A/c Dr..	294000
	To Realization A/c		294000
	(Being amount realized on sale of buildings)

	Working Note :
i)	Calculation of net proceeds from sale after Brokers Commission

	Sale Value of land and building				300000
	Less - Commission @ 2%				6000
	Net Proceeds				294000

ii)	Brokers commission is always calculated in sale value and not on book value

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Question 5

a)	Realization A/c Dr..	10000
	To X's Capital A/c		10000

b)	Realization A/c Dr..	15000
	To Machinery A/c		15000
	(Being Machinery transferred to Realization A/c)

	Creditor A/c Dr..	22000
	To Realization A/c		22000
	(Being Creditor transferred to Realization A/c)

	Realization A/c Dr..	10000
	To Bank A/c		10000
	(Being balance payment made to Rakesh)

	Working Note :
i)	No entry passed for transferring the machinery to Rakesh for settlement of part dues
ii)	When the balance payment made to Rakesh then the entry no 3 as above can be passed

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Question 6

a)	Realisation A/c	Dr	600
	To Harsh Capital A/c			600

b)	Realisation A/c	Dr	25000
	To Mohan Capital A/c			20000
	To Cash A/c			5000

c)	Realization A/c Dr..		50000
	To Motor Car A/c			50000
	(Being Motor Car transferred to realization A/c)

	Creditor A/c Dr..		40000
	To Realization A/c			40000
	(Being creditor transferred to realization A/c)

	No entry for settlement of asset against liability

Working Note :

Point No c)

First we transfer motor car to realization A/c at book value

Then we transfer creditor to realization A/c at book value

Then no entry will be passed for settlement of creditor against motor car

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Question 7 (a)

i)	Creditors A/c Dr..		85000
	To Realization A/c			85000
	(Being creditors transferred to realization A/c)

ii)	Realization A/c Dr..		43000
	To Investment A/c			43000
	(Being investment transferred to realization A/c at BV)

iii)	Realisation A/c	Dr	40000
	To Cash A/c			40000

Working Note :

No entry to be passed when assets transferred to settle a liability.

So no entry required for settling creditors against investment

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Question 7(b)

a)	Creditors A/c Dr..	16000
	To Realization A/c		16000
	(Being creditors transferred to realization A/c)

b)	Realization A/c Dr..	18000
	To Machinery A/c		18000
	(Being machinery transferred to realization A/c at BV)

Working Note :

No entry to be passed when assets transferred to settle a liability.

So no entry required for settling creditors against machinery

▶ Video Solution: Coming Soon

Question 7 (c)

i)	Creditors A/c Dr..		90000
	To Realization A/c			90000
	(Being creditors transferred to realization A/c)

ii)	Realization A/c Dr..		120000
	To Building A/c			120000
	(Being building transferred to realization A/c at BV)

iii)	Cash A/c	Dr	30000
	To Realization A/c			30000

Working Note :

No entry to be passed when assets transferred to settle a liability.

So no entry required for settling creditors against building

▶ Video Solution: Coming Soon

Question 8

a)	Realization A/c Dr..	7500
	Alok Capital A/c Dr..	2500
	To Cash/Bank A/c		10000
	(Being Realisation Expenses)

	OR
	Realization A/c Dr..	7500
	To Alok Capital A/c		7500

	Alok Capital A/c Dr..	10000
	To Cash A/c		10000

b)	Realization A/c Dr..	2000
	Ravi Capital A/c Dr..	3000
	To Cash/Bank A/c		5000
	(Being realization expenses partly borne by firm)

c)	Realisation A/c Dr..	10000
	To Amit Capital A/c		10000

d)	Realisation A/c Dr..	6000
	To Ajay Capital A/c		6000

Note : for point d) It is assumed that the realization expenses are paid by

Ajay. No entry will be passed for Rs 1000.

Note :

In the absence of information

In point no b) it is assumed that expenses are first paid by the firm

and later on will be partly recovered from Mr Ravi

Alternately, one can assume that firm has paid its share and

Mr Ravi will pay his share directly.

The journal entry will change with that assumption

Realisation A/c Dr..			2000
To Bank A/c				2000

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Question 9

Note : The initial 7-8 lines in question are of no use. Only point relevant from those lines is that

the assets and liabilities are already transferred to Realization A/c and so we need not pass

any entry for it.

i)	Dhwani's Loan A/c Dr..	50000
	To Bank A/c		42000
	To Realization A/c		8000
	(Being Dhwani's loan repaid)

ii)	Paavni's Loan A/c Dr..	40000
	To Realization A/c		40000
	(Being Paavni's loan settled through unrecorded asset)

(iii)	Charu's brother loan A/c Dr..	60000
	To Realization A/c		60000
	(This entry shown here only for information. It is already passed
	by Kavya. See note below**)

	Realization A/c Dr..	60000
	To Loan To Charu A/c		60000

iv)	Iknoor's Loan A/c Dr..	80000
	To Bank A/c		20000
	To Realization A/c		60000

Notes :

**Loan to Charu means that the loan given by firm to Charu

This is a loan given by firm to partner

This is usually directly settled by cash payment and is not taken to realization A/c/

Charu's brother loan means that the firm has taken loan from Charu's brother.

This is a third party liability for the firm

This is taken to realization A/c credit side first alongwith the other external liabilities

(This entry already passed by Kavya)

Now when this loan will be paid entry will be made Realization A/c Dr.. To Cash A/c

But here this loan is not settled through cash payment but it is settled through loan

given to partner. (Remember this is not transferred to realization A/c)

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Q 1-10 | Q 11-20 | Q 21-30 | Q 31-40 | Q 41-46

T S Grewal Solutions – Dissolution of a Partnership Firm– All Questions

T S Grewal Solutions Class 12 2026-27 – All Chapters

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