Question

J, K and L were partners in a firm sharing profits in the ratio of 4:5:1.
On 31st March, 2018 their firm was dissolved. On this date the Balance
Sheet showed a balance of 1,34,000 in debtors account and a balance
of 14,000 in provision for bad debts account. Both the accounts were
closed by transferring their balances to realisation account. 4,000 of
the debtors became bad and nothing could be realised from them on
dissolution. K agreed to look after the dissolution work for which he was
allowed a remuneration of 16,000. K also agreed to bear dissolution
expenses for which he was allowed a lumpsum payment of 4,000.
Actual dissolution expenses were 6,500 and the same were paid from
the firm's cash. Loss on dissolution amounted to 37,000.
Pass necessary journal entries for the above transactions in the books of
the firm on its dissolution.​

Answer 1

Answer:

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Answer 2

Journal Entries

Explanation:

Dissolving a partnership firm means discontinuing the business under the name of the said partnership firm. In this case, all liabilities are finally settled by selling off assets or transferring them to a particular partner, settling all accounts that existed with the partnership firm.

Any profit/ loss is transferred to partners in their profit sharing ratio as agreed by them in the partnership deed.  

Dissolving a partnership firm is different from dissolving a partnership. In the former case, the firm ends its name and hence cannot do business in the future. But in case of dissolving a partnership, the existing partnership is dissolved by consent or on happening of a certain event, but the firm can retain its existence if remaining partners enter into a new partnership agreement.

Pls refer to the pic below