More dissolution cases

The trickier dissolution questions are full of special items. Each one has a pair:

• Asset taken by a partner at an agreed value: his capital is debited, Realisation credited.
• Liability a partner agrees to pay: Realisation debited, his capital credited.
• Liability paid at a discount: Realisation is debited with the cash actually paid, not the book value.
• Unrecorded liability paid, or a contingent liability (such as a disputed bill) that turns into a real one and is paid: Realisation debited.
• Unrecorded asset sold: Realisation credited with the cash received.
• Commission or remuneration to a partner for handling the dissolution: Realisation debited, his capital credited.

Example: creditors of 50,000 are paid at a 2% discount. 2% of 50,000 = 1,000, so 49,000 is paid: Realisation Dr. To Bank 49,000.

Example: a partner is to get 5% commission on the amounts realised from the assets, and they bring in 2,00,000. Commission 10,000: Realisation Dr. To his Capital 10,000.

Remember: a partner's loan is never shared in the ratio; it is repaid to him in full, before the capitals.