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Accountancy · 2025 · 6 marks
Reconstitution of a Partnership Firm – Retirement/Death of a PartnerAdjustment for Revaluation of Assets and Liabilities6 markslong answer
CBSE 2025 · Region 6 · Set 3 · Q23
Ratan, Singh and Sharma were partners in a firm sharing profits and losses in the ratio of 2: 2: 1. Their Balance Sheet on 31st March, 2024 was as…
Ratan, Singh and Sharma were partners in a firm 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 Ratan, Singh and Sharma as at
31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | $\displaystyle 90,000$ | Bank | $\displaystyle 65,000$ |
| Outstanding Wages | $\displaystyle 10,000$ | Stock | $\displaystyle 1,50,000$ |
| General Reserve | $\displaystyle 3,00,000$ | Debtors $\displaystyle 90,000$ | |
| Capitals : | Less : Provision for Doubtful Debts $\displaystyle 5,000$ | $\displaystyle 85,000$ | |
| Ratan $\displaystyle 3,60,000$ | Plant and Machinery | $\displaystyle 2,50,000$ | |
| Singh $\displaystyle 2,40,000$ | Land and Building | $\displaystyle 4,50,000$ | |
| Sharma $\displaystyle 1,00,000$ | $\displaystyle 7,00,000$ | Profit and Loss A/c | $\displaystyle 1,00,000$ |
| $\displaystyle 11,00,000$ | $\displaystyle 11,00,000$ |
On 1st April, $\displaystyle 2024$ Sharma retired from the firm on the following terms : (i) Plant and Machinery is revalued at $\displaystyle 2,00$,000. (ii) Land and Building was to be appreciated by $\displaystyle 49,500$ and provision for bad debts will be maintained at $\displaystyle 5$% of the debtors. (iii) Sharma's share in the goodwill of the firm was valued at ₹ $\displaystyle 60,000$ and the retiring artner's share was adjusted through the capital accounts of remaining partners. (iv) Sharma was paid in cash brought by Ratan and Singh in such a way so as to make their capitals proportionate to their new profit sharing ratio. Prepare Revaluation Account and Partners' Capital Accounts.
Mita and Vihaan were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : 2. On 31st March, $\displaystyle 2024$ their Balance Sheet was as follows : Balance Sheet of Mita and Vihaan as at 31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Sundry Creditors | $\displaystyle 2,00,000$ | Cash | $\displaystyle 50,000$ |
| Capitals : | Sundry Debtors $\displaystyle 2,00,000$ | ||
| Mita $\displaystyle 4,00,000$ | Less : Provision for doubtful debts $\displaystyle 7,000$ | $\displaystyle 1,93,000$ | |
| Vihaan $\displaystyle 3,00,000$ | $\displaystyle 7,00,000$ | Stock | $\displaystyle 2,50,000$ |
| Plant and Machinery | $\displaystyle 3,50,000$ | ||
| Patents | $\displaystyle 57,000$ | ||
| $\displaystyle 9,00,000$ | $\displaystyle 9,00,000$ |
$\displaystyle 4$ On the above date, Zen was admitted as a new partner for th $\displaystyle 15$ share in the profits on the following terms : (i) Zen will bring $\displaystyle 3,00,000$ as his capital and his share of oodwill premium in cash. On Zen's admission, goodwill of the firm was valued at $\displaystyle 4,12$,500. (ii) The provision for bad debts will be maintained at $\displaystyle 5$% of the debtors. (iii) Stock will be valued at ₹ $\displaystyle 2,00,000$, plant and machinery at $\displaystyle 4,00,000$ and patents at $\displaystyle 1,20$,000. (iv) There was a bill of ₹ $\displaystyle 30,000$ for goods purchased which was omitted from the books. Pass necessary journal entries for the above transactions in the books of the firm on Zen's admission.
Marking-scheme solution
In the books of Ratan, Singh and Sharma
Dr. Revaluation A/c Cr.
Particulars Amount(₹) Particulars Amount(₹)
To Plant and Machinery A/c $\displaystyle 50,000$ By Land and Building A/c $\displaystyle 49,500$
By Provision for bad debts A/c $\displaystyle 500$
$\displaystyle 50,000$ $\displaystyle 50,000$
Dr. Partners’ Capital A/c Cr.
Particulars Ratan Singh Sharma Particulars Ratan Singh Sharma
(₹) (₹) (₹) (₹) (₹) (₹)
To Profit $\displaystyle 40,000$ $\displaystyle 40,000$ $\displaystyle 20,000$ By Balance b/d $\displaystyle 3,60,000$ $\displaystyle 2,40,000$ $\displaystyle 1,00,000$
and loss A/c
To Sharma’s $\displaystyle 30,000$ $\displaystyle 30,000$ By General $\displaystyle 1,20,000$ $\displaystyle 1,20,000$ $\displaystyle 60,000$
capital A/c Reserve A/c
To Bank/Cash $\displaystyle 2,00,000$ By Ratan’s
A/c capital A/c $\displaystyle 30,000$
To Balance $\displaystyle 4,50,000$ $\displaystyle 4,50,000$ By Singh’s
c/d capital A/c $\displaystyle 30,000$
By Bank A/c $\displaystyle 40,000$ $\displaystyle 1,60,000$
$\displaystyle 5,20,000$ $\displaystyle 5,20,000$ $\displaystyle 2,20,000$ $\displaystyle 5,20,000$ $\displaystyle 5,20,000$ $\displaystyle 2,20,000$
Q.(b) Mita and Vihaan were partners in a firm……………………
Ans.
In the books of Mita, Vihaan and Zen
Journal
Date Particulars L.F. Dr. Cr.
Amount(₹) Amount(₹)
$\displaystyle 2024$ Cash A/c Dr. $\displaystyle 4,10,000$
March $\displaystyle 31$
To Zen’s capital A/c $\displaystyle 3,00,000$
To Premium for Goodwill A/c $\displaystyle 1,10,000$
(Cash brought by Zen as capital and his share
of goodwill )
,, Premium for Goodwill A/c Dr. $\displaystyle 1,10,000$
To Mita’s capital A/c $\displaystyle 66,000$
To Vihaan’s capital A/c $\displaystyle 44,000$
(Zen’s share of goodwill distributed between
the old partners in sacrificing ratio)
,, Revaluation A/c Dr. $\displaystyle 83,000$
To Provision for Bad Debts A/c $\displaystyle 3,000$
To Stock A/c $\displaystyle 50,000$
To Outstanding Bill for Purchases A/c $\displaystyle 30,000$
(Revaluation account debited for increase in
provision for bad debts, decrease in stock and
recording bill for purchases)
,, Plant and Machinery A/c Dr. $\displaystyle 50,000$
Patents A/c Dr. $\displaystyle 63,000$
To Revaluation A/c $\displaystyle 1,13,000$
(Plant and machinery and patents revalued)
,, Revaluation A/c Dr. $\displaystyle 30,000$
To Mita’s capital A/c $\displaystyle 18,000$
To Vihaan’s capital A/c $\displaystyle 12,000$
(Gain on revaluation transferred to old
partners in old ratio)
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