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Accountancy · 2025 · 6 marks
Reconstitution of a Partnership Firm – Admission of a PartnerRevaluation of Assets and Reassessment of Liabilities6 markslong answer
CBSE 2025 · Region 1 · Set 1 · Q26
Aryan and Adya were partners in a firm sharing profits and losses in the ratio of 3: 1. Their Balance Sheet on 31st March, 2024 was as follows:…
Aryan and Adya were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 1. Their Balance Sheet on 31st March, $\displaystyle 2024$ was as follows : Balance sheet of Aryan and Adya as at 31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Machinery | $\displaystyle 3,90,000$ | |
| Aryan $\displaystyle 3,20,000$ | Furniture | $\displaystyle 80,000$ | |
| Adya $\displaystyle 2,40,000$ | $\displaystyle 5,60,000$ | Debtors $\displaystyle 90,000$ | |
| Workmen's Compensation Reserve | $\displaystyle 20,000$ | Less : provision for doubtful debts $\displaystyle 1,000$ | $\displaystyle 89,000$ |
| Bank loan | $\displaystyle 60,000$ | Stock | $\displaystyle 77,000$ |
| Creditors | $\displaystyle 48,000$ | Cash | $\displaystyle 32,000$ |
| Profit & Loss Account | $\displaystyle 20,000$ | ||
| $\displaystyle 6,88,000$ | $\displaystyle 6,88,000$ |
Dev was admitted into the firm on 1st April, $\displaystyle 2024$ for l/5th share in the profits of the firm on the following terms : (i) Dev will bring capital proportionate to his share in the profits of the firm. (ii) Goodwill of the firm was valued at ₹ $\displaystyle 2,00,000$ and Dev will bring his share of goodwill premium in cash. (° . $\displaystyle 111$) Machinery was revalued at ₹ $\displaystyle 4,50$,000. (° . iv) A provision for doubtful debts was to be created at $\displaystyle 5$% on debtors. (v) A liability of ₹ $\displaystyle 3,500$ included in creditors was not likely to arise. Prepare Revaluation Account and Partners' Capital Accounts on I)ev's admission.
Ashish, Vinit and Reema were partners sharing profits and losses in the ratio of $\displaystyle 2$ : $\displaystyle 2$ : 1. Their Balance Sheet on 31st March, $\displaystyle 2024$ was as follows : Balance sheet of Ashish, Vinit and Reema as at 31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Patents | $\displaystyle 80,000$ | |
| Ashish $\displaystyle 2,00,000$ | Furniture | $\displaystyle 3,00,000$ | |
| Vinit $\displaystyle 2,00,000$ | Stock | $\displaystyle 1,70,000$ | |
| Reema $\displaystyle 1,00,000$ | $\displaystyle 5,00,000$ | Debtors $\displaystyle 80,000$ | |
| General Reserve | $\displaystyle 50,000$ | Less : provision for doubtful debts $\displaystyle 8,000$ | $\displaystyle 72,000$ |
| Bills Payable | $\displaystyle 80,000$ | Cash | $\displaystyle 48,000$ |
| Creditors | $\displaystyle 40,000$ | ||
| $\displaystyle 6,70,000$ | $\displaystyle 6,70,000$ |
(i)
Goodwill of the firm was valued at ₹ $\displaystyle 60,000$ and the same was adjusted into the capital accounts of Ashish and Reema who will share profits in future in the ratio of $\displaystyle 3$ : 2. (ii) Value of stock was to be reduced by ₹ $\displaystyle 10$,000. (iii) Patents are found undervalued by $\displaystyle 20$% . (iv) Vinit was paid ₹ $\displaystyle 20,000$ immediately on retirement and the balance was transferred to his loan account carrying interest @ $\displaystyle 8$% p.a. Pass necessary journal entries on Vinit's retirement.
Marking-scheme solution
Books of Aryan and Adya
Dr. Revaluation A/c Cr.
Particulars Amount Particulars Amount
(₹) (₹)
To Provision for doubtful debts $\displaystyle 3,500$ By Machinery A/c $\displaystyle 60,000$
To Profit transferred to: By Creditors A/c $\displaystyle 3,500$
Aryan’s Capital A/c $\displaystyle 45,000$
Adya’s capital A/c. $\displaystyle 15,000$ $\displaystyle 60,000$
$\displaystyle 63,500$ $\displaystyle 63,500$
Dr. Partners’ Capital Accounts Cr.
Particulars Aryan Adya Dev Particulars Aryan Adya Dev
(₹) (₹) (₹) (₹) (₹) (₹)
To Profit & Loss A/c $\displaystyle 15,000$ $\displaystyle 5,000$ By balance b/d $\displaystyle 3,20,000$ $\displaystyle 2,40,000$
To balance c/d $\displaystyle 3,95,000$ $\displaystyle 2,65,000$ $\displaystyle 1,65,000$ By Cash A/c $\displaystyle 1,65,000$
By Premium for
goodwill A/c $\displaystyle 30,000$ $\displaystyle 10,000$
By Workmen
Compensation $\displaystyle 15,000$ $\displaystyle 5,000$
Reserve
By Revaluation A/c $\displaystyle 45,000$ $\displaystyle 15,000$
$\displaystyle 4,10,000$ $\displaystyle 2,70,000$ $\displaystyle 1,65,000$ $\displaystyle 4,10,000$ $\displaystyle 2,70,000$ $\displaystyle 1,65,000$
Q. (b) Ashish, Vinit and Reema were partners sharing…
Ans.
Books of Ashish, Vinit and Reema
Journal
Date Particulars L.F. Dr. Cr.
Amount Amount
(₹) (₹)
$\displaystyle 2024$
Mar.31 Patents A/c Dr. $\displaystyle 20,000$
To Revaluation A/c $\displaystyle 20,000$
(Patents were found undervalued by $\displaystyle 20$%)
Revaluation A/c Dr. $\displaystyle 10,000$
To Stock A/c $\displaystyle 10,000$
(Value of stock reduced)
Revaluation A/c Dr. $\displaystyle 10,000$
To Ashish’s Capital A/c $\displaystyle 4,000$
To Vinit’s Capital A/c $\displaystyle 4,000$
To Reema’s Capital A/c $\displaystyle 2,000$
(Profit on revaluation credited to partners’ capital accounts)
General Reserve A/c Dr. $\displaystyle 50,000$
To Ashish’s Capital A/c $\displaystyle 20,000$
To Vinit’s Capital A/c $\displaystyle 20,000$
To Reema’s Capital A/c $\displaystyle 10,000$
(General Reserve credited to partners’ capital accounts)
Ashish’s Capital A/c Dr. $\displaystyle 12,000$
Reema’s Capital A/c Dr. $\displaystyle 12,000$
To Vinit’s Capital A/c $\displaystyle 24,000$
(Vinit’s share of goodwill adjusted in the capital accounts of
Ashish and Reema in the gaining ratio)
Vinit’s Capital A/c Dr. $\displaystyle 2,48,000$
To Cash A/c $\displaystyle 20,000$
To Vinit’s Loan A/c $\displaystyle 2,28,000$
(Vinit was paid ₹$\displaystyle 20,000$ on retirement, and the balance
transferred to his loan account)
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