|
|
What is Realisation A/c(April 96) or
What do you mean by Realisation A/c(April 99)
Realisation Account is a special account prepared in the case of dissolution
of the partnership firm. It is prepared to record the realisation of assets
and payment of liabilities. The balance in the Realisation Account represents
profit or loss on realisation and is divided among the partners in their profit
sharing ratio.
When all the partners are insolvent how the deficiency is treated(April 96,
April 98)
When all the partners are insolvent, their capital deficiency is transferred
to a special account known as the Deficiency Account (also known as Profit
and Loss Account). The available cash together with what is received from
the private estate of partners, is paid to creditors. The unpaid balance is
transferred to the Deficiency Account. This step will close the Deficiency
Account and Capital Account.
State the important rules laid down in Garner Vs. Murray decision(November
96) or
Bring out 2 important decisions in Garner Vs. Murray case(April 97)
or
Mention the significant features of Garner Vs. Murray decision(November
97) or
Bring out 2 important decisions of Garner Vs. Murray(April 98, November
2002) or
Write the decision in Garner Vs. Murray case(April 99)
1.
The loss arising out of capital deficiency due to insolvency is a capital
loss.
2.
Such loss due to insolvency should be shared by the solvent partners in their
capital ratio just before dissolution.
3.
The solvent partners should bring in their share of realisation loss in cash.
4.
If there is any other partner whose capital is showing a debit balance(other
than the insolvent partner), he need not share the capital deficiency of the
insolvent partner.
What do you mean by dissolution of partnership firm(November
99)
According to Section 39 of the Indian Partnership Act, 1932, "the dissolution
of partnership between all the partners of a firm is called the dissolution
of the firm." Thus, the dissolution of a firm is the complete breakdown
of a partnership and the partners do not continue the firm. The dissolution
of the firm refers to closing down the activities of the firm.
Who is an insolvent partner(November 99)
If a partner's Capital A/c shows a debit balance on the dissolution of the
firm, he is to pay the debit balance to the firm to settle this account. But
if such a partner is unable to satisfy his debt to the firm, then he is said
to be insolvent. A partner is said to be insolvent when he is unable to meet
his capital deficiency fully or partly out of his private estate.
How would you treat an unrecorded asset taken over by one of the partners at the time of dissolution of a firm(April 2000)
At the time of dissolution, if there is an unrecorded asset and when a partner takes over the asset, the Realisation Account is to be credited by the concerned partners capital account. The concerned partners Capital Account will be debited with the amount of the unrecorded asset.
Mention any 4 circumstances under which a partnership firm is dissolved(November 2000)
1.
On the death, retirement or insolvency of one, few or all the partners and the remaining partners decide to discontinue the business.
2.
On the completion of a particular partnership venture in the case of partnership for a particular venture and the partners decide to discontinue the business.
3.
In the case of partnership at will, a firm is dissolved when any partner calls for dissolution of the firm by giving 14 days of prior notice.
4.
By the order of the court.