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Accountancy · 2025 · 6 marks
Reconstitution of a Partnership Firm – Admission of a PartnerAdjustment for Accumulated Profits and Losses6 markslong answer
CBSE 2025 · Region 5 · Set 2 · Q23
Kishore and Ranjan were partners in a firm sharing profits and losses in the ratio of 3: 2. On 1st April, 2024, their Balance Sheet was as follows:…
Kishore and Ranjan were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. On 1st April, $\displaystyle 2024$, their Balance Sheet was as follows :
Balance Sheet of Kishore and Ranjan as at 1st April, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Sundry Creditors | $\displaystyle 1,80,000$ | Cash in hand | $\displaystyle 30,000$ |
| General Reserve | $\displaystyle 20,000$ | Debtors | $\displaystyle 1,20,000$ |
| Capitals : | Stock | $\displaystyle 1,50,000$ | |
| Kishore $\displaystyle 6,00,000$ | Furniture | $\displaystyle 1,00,000$ | |
| Ranjan $\displaystyle 4,00,000$ | $\displaystyle 10,00,000$ | Land and Building | $\displaystyle 8,00,000$ |
| $\displaystyle 12,00,000$ | $\displaystyle 12,00,000$ |
On the above date, Singh was admitted as a new partner on the following terms : (i) Singh will bring ₹ $\displaystyle 1,50,000$ as his capital and *s $\displaystyle 50,000$ as his share of goodwill premium. (ii) The value of stock will be reduced by $\displaystyle 10$% and Land and Building will be appreciated by $\displaystyle 10$%. (iii) Furniture will be revalued at $\displaystyle 90$,000. (iv) A provision for doubtful debts will be created on sundry debtors at $\displaystyle 5$%. (v) Investments worth ₹ $\displaystyle 10,000$ not mentioned in the Balance Sheet will be taken into account. (vi) A creditor of $\displaystyle 1,000$ is not likely to claim his money and is to be written off. Pass necessary journal entries for the above transactions in the books of the firm on Sing f's admission.
Arti, Bharti and Gayatri were partners in a firm sharing profits and losses in ratio of $\displaystyle 5$ : $\displaystyle 3$ : 2. Their Balance Sheet as at 31st March, $\displaystyle 2024$ was a follows :
Balance Sheet of Arti, Bharti and Gayatri as at 31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 1,50,000$ | Cash at Bank | $\displaystyle 1,30,000$ |
| General Reserve | $\displaystyle 1,30,000$ | Debtors | $\displaystyle 70,000$ |
| Employees' Provident Fund | $\displaystyle 25,000$ | Stock | $\displaystyle 1,05,000$ |
| Workmen Compensation Fund | $\displaystyle 75,000$ | Machinery | $\displaystyle 1,40,000$ |
| Capitals : | Building | $\displaystyle 2,00,000$ | |
| Arti $\displaystyle 2,00,000$ | Patents | $\displaystyle 5,000$ | |
| Bharti $\displaystyle 1,00,000$ | Profit and Loss A/c | $\displaystyle 80,000$ | |
| Gayatri $\displaystyle 50,000$ | $\displaystyle 3,50,000$ | ||
| $\displaystyle 7,30,000$ | $\displaystyle 7,30,000$ |
On the above date, Arti retired from the firm on the following terms : (i) Goodwill of the firm was valued at ₹ $\displaystyle 3,00$,000. (ii) A provision of $\displaystyle 5$% for doubtful debts was to be created on debtors. (iii) Machinery was to be depreciated by $\displaystyle 10$% and building was to be appreciated by $\displaystyle 22$,500. (iv) Patents were considered as valueless and hence had to be written off. (v) A claim of $\displaystyle 15,000$ was admitted for workmen compensation. Prepare Revaluation Account and Partners' Capital Accounts on Arti's retirement.
Marking-scheme solution
Books of Kishore, Ranjan and Singh
Journal
Date Particulars L.F Dr. Amount Cr. Amount
₹ ₹
$\displaystyle 2024$ Cash A/c / Bank A/c Dr. $\displaystyle 2,00,000$
April $\displaystyle 1$ To Singh’s Capital A/c $\displaystyle 1,50,000$
To Premium for goodwill A/c $\displaystyle 50,000$
(Amount brought in by Singh as share of
capital and share of premium for goodwill)
,, Premium for goodwill A/c Dr. $\displaystyle 50,000$
To Kishore’s Capital A/c $\displaystyle 30,000$
To Ranjan’s Capital A/c $\displaystyle 20,000$
(Adjustment for goodwill in sacrificing ratio)
,, General Reserve A/c Dr. $\displaystyle 20,000$
To Kishore’s Capital A/c $\displaystyle 12,000$
To Ranjan’s Capital A/c $\displaystyle 8,000$
(Distribution of general reserve in old ratio)
,, Revaluation A/c Dr. $\displaystyle 31,000$
To Stock A/c $\displaystyle 15,000$
To Furniture A/c $\displaystyle 10,000$
To Provision for doubtful debts A/c $\displaystyle 6,000$
(Assets revalued and provision for doubtful
debts created)
,, Land & Building A/c Dr. $\displaystyle 80,000$
Investments A/c Dr. $\displaystyle 10,000$
Creditors A/c Dr. $\displaystyle 1,000$
To Revaluation A/c $\displaystyle 91,000$
(Assets revalued and liabilities reassessed )
,, Revaluation A/c Dr. $\displaystyle 60,000$
To Kishore’s Capital A/c $\displaystyle 36,000$
To Ranjan’s Capital A/c $\displaystyle 24,000$
(Distribution of gain on revaluation in old
ratio)
Q.(b) Arti, Bharti and Gayatri were partners…………..
Ans.
Dr. Revaluation A/c Cr.
Particulars Amount Particulars Amount
To Provision for doubtful $\displaystyle 3,500$ By Building A/c $\displaystyle 22,500$
debts A/c
To Machinery A/c $\displaystyle 14,000$
To Patents A/c $\displaystyle 5,000$
$\displaystyle 22,500$ $\displaystyle 22,500$
Dr. Partners’ Capital A/c Cr.
Particulars Arti Bharti Gayatri Particulars Arti Bharti Gayatri
To Profit & Loss A/c $\displaystyle 40,000$ $\displaystyle 24,000$ $\displaystyle 16,000$ By Balance b/d $\displaystyle 2,00,000$ $\displaystyle 1,00,000$ $\displaystyle 50,000$
By Bharati’s
To Aarti’s Capital A/c - $\displaystyle 90,000$ $\displaystyle 60,000$ Capital A/c $\displaystyle 90,000$ - -
By Gayatri’s
To Aarti’s Loan A/c $\displaystyle 4,05,000$ - - Capital A/c $\displaystyle 60,000$ - -
To Balance c/d - $\displaystyle 43,000$ $\displaystyle 12,000$ By General Reserve $\displaystyle 65,000$ $\displaystyle 39,000$ $\displaystyle 26,000$
By Workmen $\displaystyle 30,000$ $\displaystyle 18,000$ $\displaystyle 12,000$
Compensation Fund
$\displaystyle 4,45,000$ $\displaystyle 1,57,000$ $\displaystyle 88,000$ $\displaystyle 4,45,000$ $\displaystyle 1,57,000$ $\displaystyle 88,000$
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