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Accountancy · 2026 · 3 marks
Reconstitution of a Partnership Firm – Retirement/Death of a PartnerTreatment of Goodwill3 marksshort answer
CBSE 2026 · Region 5 · Set 3 · Q18
Jatin, Karan and Sia were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. On 31st March, 2025, their Balance Sheet was as…
Jatin, Karan and Sia were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : $\displaystyle 2$ : 1. On 31st March, $\displaystyle 2025$, their Balance Sheet was as follows : Balance Sheet of Jatin, Karan and Sia as at 31st March, $\displaystyle 2025$
Jatin retired from the firm on the above date on the following terms : (i) Goodwill of the firm was valued at ₹ $\displaystyle 3,00,000$ and the same was to be treated without opening goodwill account. (ii) Revaluation of assets and reassessment of liabilities resulted in a loss of $\displaystyle 75$,000. (iii) Amount payable to Jatin was transferred to his loan account. Pass necessary journal entries for goodwill, general reserve and revaluation of assets and reassessment of liabilities on Jatin's retirement.
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Patents | $\displaystyle 4,05,000$ | |
| Jatin $\displaystyle 3,20,000$ | Land and Building | $\displaystyle 4,95,000$ | |
| Karan $\displaystyle 3,90,000$ | Stock | $\displaystyle 1,85,000$ | |
| Sia $\displaystyle 5,00,000$ | $\displaystyle 12,10,000$ | Debtors | $\displaystyle 1,78,000$ |
| General Reserve | $\displaystyle 50,000$ | Cash at bank | $\displaystyle 27,000$ |
| Creditors | $\displaystyle 30,000$ | ||
| $\displaystyle 12,90,000$ | $\displaystyle 12,90,000$ |
Marking-scheme solution
Books of Jatin, Karan and Sia
Journal
Date Particulars L.F. Dr. Cr.
Amount(₹) Amount(₹)
$\displaystyle 2025$ Karan’s Capital A/c Dr. $\displaystyle 80,000$
March $\displaystyle 31$ Sia’s Capital A/c Dr. $\displaystyle 40,000$
To Jatin’s Capital A/c $\displaystyle 1,20,000$
(Adjustment entry made for
goodwill)
General Reserve A/c Dr. $\displaystyle 50,000$
,, To Jatin’s Capital A/c $\displaystyle 20,000$
To Karan’s Capital A/c $\displaystyle 20,000$
To Sia’s Capital A/c $\displaystyle 10,000$
(General reserve transferred to all
partners in old ratio)
Jatin’s Capital A/c Dr. $\displaystyle 30,000$
,, Karan’s Capital A/c Dr. $\displaystyle 30,000$
Sia’s Capital A/c Dr. $\displaystyle 15,000$
To Revaluation A/c $\displaystyle 75,000$
(Loss on revaluation transferred to
all partners in old ratio)
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