Page 6 - LN DISSOLUTION OF FIRM

(Being liability against workmen’s compensation fund transferred to

Realisation A/c and balance Distributed among partners.

C. For Realisation of Assets (Whether recorded or unrecorded)
a. When assets are sold for cash
Cash/Bank A/c Dr.

To Realisation A/c

(Being assets sold for cash)

b. When assets are taken over by any partner.
Partner’s Capital A/c Dr.

To Realisation A/c

(Being assets taken over by any partner)

c. When assets are taken over by any creditor in part of full payment his
dues :
I. In case of Full Settlement:

i. NO ENTRY is passed for the transfer of assets to the creditor.
ii. NO ENTRY is passed for the payment to creditor.

II. In case of Part Settlement:

i. NO ENTRY is passed for the transfer of assets to the creditor.

ii. The agreed amount of asset is deducted from the claims of it creditors

and the balance is paid to him.
Note :

1. The realized value of each asset must be given at the time of

dissolution.
D. For Payment of Liabilities
a. When liabilities are paid in cash
Realisation A/c Dr.

To Cash/Bank A/c

(Being liabilities paid in cash)

b. When liabilities are taken over by any partner
Realisation A/c Dr.

To Partner’s Capital A/c