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DK Goel Class 12 Accountancy Chapter 5 Solutions

DK Goel Class 12 Accountancy Chapter 5 Solutions

Q: 2. What is the correct order for the settlement of accounts upon the dissolution of a firm according to the Indian Partnership Act, 1932?

According to Section 48 of the Indian Partnership Act, 1932, the funds realised from the sale of firm assets must be applied in a specific order for settlement. The correct sequence is:First, to pay off the realisation expenses.Second, to pay the debts of the firm to third parties (external liabilities), such as creditors and loans.Third, to repay any loans or advances made by partners to the firm, over and above their capital contribution.Finally, any remaining surplus is distributed among the partners in their profit-sharing ratio to settle their capital account balances.

Q: 5. What is the correct accounting treatment for Goodwill in the books when a firm is dissolved?

During the dissolution of a firm, Goodwill is treated just like any other asset. If Goodwill already appears in the balance sheet, it is transferred to the debit side of the Realisation Account along with other assets. If any amount is received from its sale, it is credited to the Realisation Account. If Goodwill is not sold or nothing is mentioned about its realisation, its value is considered nil. This is different from its treatment during admission or retirement, where it is adjusted through the partners' capital accounts without opening a Goodwill account.

DK Goel Solutions Class 12 Volume 1 Chapter 5 - Dissolution of a Partnership Firm

Accountancy is a complex subject dealing with recording and calculating the economic entities of a financial and non-financial institution. The subject covers a wide area regarding auditing, tax management, and working at a partnership firm. DK Goel accountancy class 12 solutions Chapter 5 PDF to enhance your Exam Preparation and Score High Marks.

DK Goel Solutions Class 12 Accountancy Volume 1 Chapter 5 PDF

A partnership firm is an organization that is formed by two or more people to run a firm and share its profit and loss. The Indian Partnership Act 1932 governs these companies and sets rules.

When a partner dies or retires, an existing partnership gets dissolved, and a firm runs on the same name as decided by members. Students will learn the rules mandated in section 39 of the Partnership act by referring to Dissolution of Partnership Firm Class 12 DK Goel Solutions.

Breaking or discontinuation of the relationship, which ends the existence of a business is explained in the solution. A Class 12 student has to calculate the wound-up affairs like selling off assets, profits, losses, and liabilities in a balance sheet.

Dk Goel Accountancy Class 12 Solutions Dissolution PDF

Dissolution of a partnership may take place with or without any intervention of the court. Students will learn to calculate the particulars needed in settlements of debts by solving questions from Dissolution of Partnership Firm Class 12 DK Goel Solutions.

The particulars of the balance sheet like private debts, bank loans, intangible assets, general reserve, etc. fall under the assets and liability section. To help students understand these complex equations, the DK Goel Solution comes in PDF format.

A student can easily access and download the solutions at their convenience. Students of Class 12 who desire to score flying grades in boards can refer to the solutions for revision.

DK Goel Accountancy Class 12 Solutions Chapter 5 PDF

Board exams are crucial for every Class 12 student as the scores obtained help in deciding the field of study. Therefore, regular practice of exercises and question papers is mandatory. Dissolution of Partnership Firm Class 12 DK Goel Solutions are in a step-by-step format to strengthen a student’s knowledge of Accountancy.

The DK Goel class 12 book presents pupils with a variety of theories and topics. Students require a firm foundation and must understand the technicalities of accountancy to get the best grades in their exams.

Chapter 5: Partner Death or Retirement

Download DK Goel Accounting Solutions for Class 12 Retirement or a partner's death: Effect of a partner's retirement or death on profit sharing ratio, goodwill treatment (as per AS 26), revaluation of assets and reassessment of liabilities, adjustment of cumulative profits, and reserves, capital account adjustments, and balance sheet preparation. Preparation of the retiring partner's loan account. Calculation of the profit share of the dead partner up to the date of death. Preparation of capital accounts for a deceased partner, an executor's account, and a balance sheet.

One of the core disciplines in the commerce curriculum is accounting. Hundreds of students struggle every year to do well in the course. Students who have a weak foundation in accountancy perceive this subject to be the most difficult and lose scores on the exam.

At the same time, few people believe that the exam days are enough time to prepare for a good grade. Accountancy is, in fact, one of the most popular disciplines among commerce students. However, students will not benefit from memorizing theories before the examination.

Accounting is all about having a clear grasp of concepts and logic, as well as the ability to put them into practice. Scoring full marks in the Class 12 test is a piece of cake if pupils are entirely aware of the principles and their practical application. The biggest issue, however, is keeping track of the program and covering all of the chapters in Accountancy Class 12.

The accounting syllabus for class 12 teaches students a variety of ideas and theories. Students require a firm foundation and must understand the technicalities of accountancy to get the best grades in their exams.

One of the key aspects of a student's career is the Class 12 Board test. This score will assist students in gaining admission to top-tier educational institutions in the future. As a result, every student hopes to do well in the examination. Accounting is heavily weighted in determining the overall proportion of pupils. Accountancy provides students with a plethora of options for building a successful profession.

How to Get Ready for Accountancy in 12th Grade?

Accounting is a discipline with a lot of theories and concepts. The accounting syllabus for class 12 is broken into two parts: Volume 1 and Volume 2. Volume 1 has a total of 5 chapters, while Volume 2 has a total of 6 chapters. As a result, students must memorize each chapter to consolidate their understanding. Here are some of the most successful, tried-and-true strategies for acing the class 12 Accountancy exam:

Make a list of your theories first: Each chapter is jam-packed with definitions, illustrations, definitions, concepts, applications, and examples. Before diving into the value-based challenges, review all of the theories to solidify your understanding of the topics.

Solve a lot of problems in each chapter: Once you've gained a good understanding of a topic, move on to a bunch of questions about it. Complete all of the chapter's questions. Begin with the easiest level and work your way up. Students will be exposed to a variety of new concepts and their applications as they work on the tasks.

The top study materials and books are as follows: In today's world, there is a wealth of free accounting content or books available on the internet. The students, on the other hand, must carefully select the best option. Students can get top-notch advice from DK Goel Class 12 Accountancy Solutions. All of these textbooks are expertly crafted using Prof. DK Goel's extensive knowledge and experience. Expert faculties supplement the DK Goel Solutions as the most premium textbooks.

Examine prior year's question papers: At the end of each chapter in the DK Goel textbook, you'll find the previous year's questions. Students must practice all of the questions to master every detail of a chapter. If they get stuck on a concept, they can look up information in the textbook.

Examine sample papers and take mock examinations in accounting: Sample papers are created to provide pupils with an idea of the questioning pattern and to provide the most important questions. Students can also take practice exams to test their knowledge and prepare for the real thing. Mock tests are the most effective technique for pupils to gain confidence in an exam-like setting.

Read Chapter 5 of DK Goel Solutions Class 12: Retirement or Death of a Partner below. These solutions are based on the current year's Class 12 DK Goel Accountancy book, which is used by commerce stream students, as well as the questions in each chapter.

When a partner retires or dies, the accounting implications of this transition might be significant. Students should be able to account for such events in a partnership form and pass the accounting entries accurately so that the partnership firm's financial statements reflect the correct status.

The chapter provides several questions that will be beneficial to Accountancy students in Class 12 and will also assist in the development of strong concepts that will be beneficial in your career. These solutions are completely free and will assist you in preparing for your Class 12 Accounting exam. Simply scroll down and read the answers that have been provided.

There are four questions in DK Goel Accountancy Class 12 Solutions Chapter 5 PDF, detailed in a table format.

DK Goel Accountancy Class 12 Solutions Chapter 5 Dissolution of Partnership Firm Question 1

The first question requires students to calculate variables in the balance sheet. There are different particulars in assets like cash in hand is Rs. 3920, added with capital account Rs.15000 and sundry is Rs. 1,74,230. While the liability section contains creditors amount Rs. 23,150 added with the capital account of A which is 1,25,000 and capital account of b for Rs. 45,000. This calculation makes a total of Rs. 1,93,150 for both assets and liability. Students are needed to make a balance sheet with an equal amount from assets and liability. So, there are no issues in wound-up amounts.

Again, they have to prepare the realization account so that the debit and credit account total is similar. Here the total rounds up to Rs. 1,99,240 and the sundry assets is Rs. 1,74,230 (Rs. 1,93,150 – 18,920).

DK Goel Accountancy Class 12 Solutions Dissolution PDF Question 2

In the second question, a journal has to be formed by students by calculating particulars in debit and credit format. Here debit is calculated while credit is subtracted from the total amount. It starts with Rs.500 as a debit for realization account and partner capital which is paid to the bank, making the credit clear. The bank account has an amount of Rs. 25,000 and realization amount of Rs. 5000, both of which are paid to the creditor. Moreover, the realization account of A’s capital account is settled by paying the amount of Rs. 400 (2/10x 20,000). The net cash realized is calculated by subtracting the realization account Rs. 5000 from the bank account amount of Rs. 25,000.

DK Goel Accountancy Class 12 Solutions Chapter 5 PDF Question 3

The third question from Dissolution of Partnership Firm Class 12 DK Goel Solutions makes students calculate the particulars in debit and credit amount in the journal of a company. Here the realization account has a debit of Rs. 12,000 which is credited to the bank account as a loan paid. The realization account to A’s capital is Rs. 400, and other debts are made for the purposes like a’s and b’s capital Rs. 28,000, bank account (b’s stock) RS. 1200 and realization account Rs. 2000.

Dissolution of Partnership Firm DK Goel Solutions Question 4

This fourth question requires students to calculate the realization account posting of the transaction made by the company. The particulars on one side include assets Rs. 5,00,000 added with bank liabilities paid Rs. 1,00,000 and realization expenses paid Rs. 5000. The other side includes liabilities Rs. 1,00,000 added with bank assets sold Rs. 4,20,00 and Rs. 85,000 for loss on realization. This calculation makes the total on both sides to Rs. 6,05,000.

The Class 12 Accountancy exam gives weightage to remembering and understanding and applying and analysis. The marks, therefore, are divided between 80 marks for theoretical and 20 marks for the practical paper.

Marks Weightage on Chapter 5 Accountancy Volume 1

DK Goel Accountancy Class 12 Solutions Chapter 5 Dissolution of Partnership Firm	Marks
Unit 2. Accounting for partnership firms	30

Benefits of Revising From Dissolution of Partnership Firm DK Goel Solutions

Students will learn the partnership deed and particulars mentioned while creating the firm from Dissolution of Partnership Firm Class 12 DK Goel Solutions.
They will know the difference between fluctuating and fixed capital, profit and loss appropriation account, reevaluation of assets and liabilities by preparing the balance sheet, etc.
Understanding of the realization account and other related accounts for the balanced wound-up amount.

Students referring to the solution will be able to develop the skills required for pursuing the commerce stream as their field of study.

Access Other Chapters of DK Goel Solutions Class 12 Accountancy Volume 1

Access Other Chapters of DK Goel Solutions Class 12 Accountancy Volume 2

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FAQs on DK Goel Class 12 Accountancy Chapter 5 Solutions

1. How do you prepare the Realisation Account for the dissolution of a partnership firm as per the DK Goel textbook solutions?

Preparing the Realisation Account involves a systematic, step-by-step process to determine the profit or loss from the sale of assets and settlement of liabilities. The correct method is as follows:

Step 1: Transfer Assets: All assets of the firm (except for cash, bank balance, and fictitious assets) are transferred to the debit side of the Realisation Account at their book values.
Step 2: Transfer Liabilities: All external liabilities (creditors, bills payable, bank overdraft) are transferred to the credit side of the Realisation Account at their book values.
Step 3: Record Sale of Assets: The amount received from the sale of assets is recorded on the credit side of the Realisation Account as 'By Bank/Cash A/c'.
Step 4: Record Settlement of Liabilities: The actual payment made to settle the liabilities is recorded on the debit side as 'To Bank/Cash A/c'.
Step 5: Account for Expenses: Any expenses incurred during the dissolution process (realisation expenses) are debited to the account.
Step 6: Close the Account: The final balance in the Realisation Account represents either a profit (credit side > debit side) or a loss (debit side > credit side), which is then transferred to the partners' capital accounts in their profit-sharing ratio.

2. What is the correct order for the settlement of accounts upon the dissolution of a firm according to the Indian Partnership Act, 1932?

According to Section 48 of the Indian Partnership Act, 1932, the funds realised from the sale of firm assets must be applied in a specific order for settlement. The correct sequence is:

First, to pay off the realisation expenses.
Second, to pay the debts of the firm to third parties (external liabilities), such as creditors and loans.
Third, to repay any loans or advances made by partners to the firm, over and above their capital contribution.
Finally, any remaining surplus is distributed among the partners in their profit-sharing ratio to settle their capital account balances.

3. How is a Partner's Loan Account treated during the dissolution process, and why is it not transferred to the Realisation Account?

A Partner's Loan Account is treated as an internal liability but is distinct from their capital. It is not transferred to the Realisation Account. Instead, it is paid off separately after all external liabilities of the firm have been settled in full. The payment is recorded by debiting the Partner's Loan Account and crediting the Cash/Bank Account. This is done because a partner's loan has priority over the repayment of partner's capital but is subordinate to the firm's external debts.

4. Why is a Realisation Account prepared during the dissolution of a firm, instead of a Revaluation Account?

The purpose of these two accounts is fundamentally different. A Revaluation Account is prepared when there is a change in the partnership agreement (like admission or retirement of a partner) but the business continues to operate. Its goal is to adjust the value of assets and liabilities to their current market price. In contrast, a Realisation Account is prepared only when the firm is being dissolved and the business is closing down permanently. Its sole purpose is to calculate the net profit or loss that arises from the process of selling all assets and paying off all liabilities to close the books of the firm.

5. What is the correct accounting treatment for Goodwill in the books when a firm is dissolved?

During the dissolution of a firm, Goodwill is treated just like any other asset. If Goodwill already appears in the balance sheet, it is transferred to the debit side of the Realisation Account along with other assets. If any amount is received from its sale, it is credited to the Realisation Account. If Goodwill is not sold or nothing is mentioned about its realisation, its value is considered nil. This is different from its treatment during admission or retirement, where it is adjusted through the partners' capital accounts without opening a Goodwill account.

6. How is the deficiency of an insolvent partner's capital account treated according to the Garner vs Murray rule?

When a partner becomes insolvent and cannot pay their capital deficiency, the loss is borne by the solvent partners. According to the Garner vs Murray rule, this deficiency is shared by the solvent partners not in their profit-sharing ratio, but in their capital ratio. The capital ratio is based on the partners' capital balances standing in the books just before the dissolution begins. This ensures that partners with more capital at stake bear a larger portion of the loss from an insolvent partner.

7. What is the journal entry for an unrecorded asset taken over by a partner during dissolution, and what is the logic behind it?

When an unrecorded asset is taken over by a partner, it represents a gain to the firm and a reduction in the amount the firm owes to that partner. The correct journal entry is:

Partner's Capital A/c ... Dr.
To Realisation A/c

The logic is that the Realisation Account is credited because the firm has 'realised' value from a previously unrecorded asset, which is a gain. The Partner's Capital Account is debited because the partner is essentially 'paying' for the asset by reducing the final amount they will receive from the firm upon settlement.

8. Where can I find reliable, step-by-step DK Goel Class 12 Accountancy Chapter 5 Solutions for the 2025-26 session?

For the 2025-26 academic session, you can find accurate and detailed step-by-step solutions for all practical problems in DK Goel Class 12 Accountancy Chapter 5 on Dissolution of a Partnership Firm right here on Vedantu. Our solutions are prepared by subject matter experts and strictly follow the latest CBSE guidelines and accounting principles to help you understand the correct methodology for solving complex problems involving the Realisation Account, Partners' Capital Accounts, and the final settlement of accounts.