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Accountancy · 2026 · 6 marks
Reconstitution of a Partnership Firm – Admission of a PartnerAdjustment for Accumulated Profits and Losses6 markslong answer
CBSE 2026 · Region 3 · Set 2 · Q25
Anand and Bir were partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March, 2025, their Balance Sheet was as follows:…
Anand and Bir were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. On 31st March, $\displaystyle 2025$, their Balance Sheet was as follows :
Balance Sheet of Anand and Bir as on 31st March, $\displaystyle 2025$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 45,000$ | Cash | $\displaystyle 9,000$ |
| Workmen Compensation Fund | $\displaystyle 15,000$ | Debtors | $\displaystyle 36,000$ |
| Capitals : | |||
| Anand $\displaystyle 90,000$ | Stock | $\displaystyle 45,000$ | |
| Bir $\displaystyle 60,000$ | $\displaystyle 1,50,000$ | Furniture | $\displaystyle 30,000$ |
| Plant and Machinery | $\displaystyle 90,000$ | ||
| $\displaystyle 2,10,000$ | $\displaystyle 2,10,000$ |
On 1st April, $\displaystyle 2025$, they admitted Vishal as a new partner for $\displaystyle 1$/6th share in the profits of the firm. It was agreed that : (i) Vishal will bring ₹ $\displaystyle 45,000$ as his capital and ₹ $\displaystyle 15,000$ for his $\displaystyle 2$' t share of goodwill premium. (ii) Stock was to be reduced by $\displaystyle 10$% and machinery was to be appreciated by $\displaystyle 10$%. (iii) Furniture was revalued at ₹ $\displaystyle 27$,000. (iv) $\displaystyle 5$% provision for bad debts was to be created and $\displaystyle 600$ were T to be provided for outstanding repair bill. (v) There were unrecorded investments of ₹ $\displaystyle 3,000$ which were to be recorded. (vi) A creditor of $\displaystyle 900$ was not likely to claim his money and T hence was to be written off. Pass necessary journal entries for the above transactions in the books of the firm on Vishal's admission.
Radha, Shyam and Meera were partners in a firm sharing profits and losses equally. Their Balance Sheet as at 31st March, $\displaystyle 2025$ was as follows :
Balance Sheet of Radha, Shyam and Meera as at 31st March, $\displaystyle 2025$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Patents | $\displaystyle 1,80,000$ | |
| Radha $\displaystyle 4,00,000$ | Building | $\displaystyle 6,90,000$ | |
| Shyam $\displaystyle 4,00,000$ | Debtors | $\displaystyle 2,70,000$ | |
| Meera $\displaystyle 4,00,000$ | Stock | $\displaystyle 3,60,000$ | |
| $\displaystyle 12,00,000$ | Bank | $\displaystyle 1,80,000$ | |
| General Reserve | $\displaystyle 3,00,000$ | ||
| Creditors | $\displaystyle 1,80,000$ | ||
| $\displaystyle 16,80,000$ | $\displaystyle 16,80,000$ |
Shyam retired from the firm on the above date on the following terms : (i) The new profit sharing ratio between the remaining partners was agreed at $\displaystyle 3$ : 2. (ii) The value of stock was to be reduced by ₹ $\displaystyle 1,20$,000. (iii) Patents were considered as valueless and hence were to be written off. (iv) Goodwill of the firm was valued at ₹ $\displaystyle 6,00,000$ on Shyam's retirement. (v) Shyam was paid ₹ $\displaystyle 1,00,000$ immediately on his retirement and the balance was transferred to his loan account. Prepare Revaluation Account and Partners' Capital Accounts.
Marking-scheme solution
In the Books of Anand, Bir and Vishal
Journal
Date Particulars L.F. Amount Amount
(₹) (₹)
$\displaystyle 2025$
April $\displaystyle 1$ Cash / Bank A/c Dr. $\displaystyle 60,000$
To Vishal’s Capital A/c $\displaystyle 45,000$
To Premium for Goodwill A/c $\displaystyle 15,000$
(Capital and goodwill brought in by Vishal)
April $\displaystyle 1$ Premium for Goodwill A/c Dr. $\displaystyle 15,000$
To Anand’s Capital A/c $\displaystyle 9,000$
To Bir’s Capital A/c $\displaystyle 6,000$
(Premium divided among sacrificing partners in
sacrificing ratio)
April $\displaystyle 1$ Workmen’s Compensation Fund A/c Dr. $\displaystyle 15,000$
To Anand’s Capital A/c $\displaystyle 9,000$
To Bir’s Capital A/ c $\displaystyle 6,000$
(Workmen compensation fund divided among
old partners in old ratio)
April $\displaystyle 1$ Revaluation A/c Dr. $\displaystyle 9,900$
To Furniture A/c $\displaystyle 3,000$
To Stock A/c $\displaystyle 4,500$
To Provision for Doubtful Debts A/c $\displaystyle 1,800$
To Outstanding Repair Bill A/c $\displaystyle 600$
(Decrease in assets and increase in liabilities
brought into the books)
April $\displaystyle 1$ Machinery A/c Dr. $\displaystyle 9,000$
Investments A/c Dr. $\displaystyle 3,000$
Creditors A/c Dr. $\displaystyle 900$
To Revaluation A/c $\displaystyle 12,900$
(Increase in assets and decrease in liabilities
brought into the books)
April $\displaystyle 1$ Revaluation A/c Dr. $\displaystyle 3,000$
To Anand’s Capital A/c $\displaystyle 1,800$
To Bir’s Capital A/c $\displaystyle 1,200$
(Gain on revaluation transferred to old partners’
capital account in old profit-sharing ratio)
Q. Radha, Shyam and Meera were partners …
Ans.
Dr. Revaluation A/c Cr.
Particulars Amount Particulars Amount
(₹) (₹)
To Stock A/c $\displaystyle 1,20,000$ By Capital A/c (loss)
To Patents A/c $\displaystyle 1,80,000$ Radha $\displaystyle 1,00,000$
Shyam $\displaystyle 1,00,000$
Meera $\displaystyle 1,00,000$ $\displaystyle 3,00,000$
$\displaystyle 3,00,000$ $\displaystyle 3,00,000$
Dr. Partners’ Capital Account Cr.
Particulars Radha Shyam Meera Particulars Radha Shyam Meera
(₹) (₹) (₹) (₹) (₹) (₹)
To By
Revaluati balance
on A/c b/d $\displaystyle 4,00,000$ $\displaystyle 4,00,000$ $\displaystyle 4,00,000$
(loss) $\displaystyle 1,00,000$ $\displaystyle 1,00,000$ $\displaystyle 1,00,000$
By
To General
$\displaystyle 1,00,000$ $\displaystyle 1,00,000$ $\displaystyle 1,00,000$
Shyam’s Reserve
$\displaystyle 1,60,000$ - $\displaystyle 40,000$
Capital A/c
A/c
By
To Cash Radha’s
$\displaystyle 1,00,000$ -
/Bank A/c Capital
$\displaystyle 1,60,000$ -
A/c
To By
Shyam’s - $\displaystyle 5,00,000$ - Meera’s
Loan A/c Capital - $\displaystyle 40,000$ -
A/c
To
Balance $\displaystyle 2,40,000$ - $\displaystyle 3,60,000$
c/d
$\displaystyle 5,00,000$ $\displaystyle 7,00,000$ $\displaystyle 5,00,000$ $\displaystyle 5,00,000$ $\displaystyle 7,00,000$ $\displaystyle 5,00,000$
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