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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 7 · Set 1 · Q24
Uma and Umesh were partners in a firm sharing profits and losses in the ratio of 2: 3. On 31st March, 2024, their Balance Sheet was as follows:…
Uma and Umesh were partners in a firm sharing profits and losses in the ratio of $\displaystyle 2$ : 3. On 31st March, $\displaystyle 2024$, their Balance Sheet was as follows :
Balance Sheet of Uma and Umesh as at 31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Land and Building | $\displaystyle 10,00,000$ | |
| Uma $\displaystyle 5,00,000$ | Furniture | $\displaystyle 1,00,000$ | |
| Umesh $\displaystyle 7,50,000$ | $\displaystyle 12,50,000$ | Debtors $\displaystyle 80,000$ | |
| Creditors | $\displaystyle 50,000$ | Less : Provision for doubtful debts $\displaystyle 5,000$ | $\displaystyle 75,000$ |
| General Reserve | $\displaystyle 75,000$ | Stock | $\displaystyle 40,000$ |
| Workmen Compensation Fund | $\displaystyle 25,000$ | Bank | $\displaystyle 1,95,000$ |
| Outstanding Electricity Bill | $\displaystyle 10,000$ | ||
| $\displaystyle 14,10,000$ | $\displaystyle 14,10,000$ |
On the above date, Daya was admitted as a new partner on the following terms : (i) The new profit sharing ratio of Uma, Umesh and Daya will be $\displaystyle 2$ : $\displaystyle 3$ : 5. (ii) Daya will bring $\displaystyle 10,00,000$ as her capital and ₹ $\displaystyle 2,00,000$ as her share of goodwill premium. (iii) The value of Land and Building will be increased by ₹ $\displaystyle 2,00$,000. (iv) Furniture will be depreciated by $\displaystyle 10$%. (v) ₹ $\displaystyle 3,000$ bad debts will be written off and a provision for bad and doubtful debts be created @ $\displaystyle 5$% of debtors. (vi) Outstanding electricity bill will be paid off. Pass necessary journal entries for the above transactions on Daya's admission.
Naval, Nyaya and Nritya were partners in a firm sharing profits and losses in the ratio of $\displaystyle 3$ : $\displaystyle 5$ : 2. On 31st March, $\displaystyle 2024$, their Balance Sheet was as follows : Balance Sheet of Naval, Nyaya and Nritya as at
31st March, $\displaystyle 2024$
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capitals : | Land and Building | $\displaystyle 9,50,000$ | |
| Naval $\displaystyle 2,00,000$ | Plant and Machinery | $\displaystyle 2,00,000$ | |
| Nyaya $\displaystyle 3,00,000$ | Furniture | $\displaystyle 50,000$ | |
| Nritya $\displaystyle 5,00,000$ | $\displaystyle 10,00,000$ | Stock | $\displaystyle 70,000$ |
| General Reserve | $\displaystyle 80,000$ | Debtors $\displaystyle 95,000$ | |
| Mrs. Naval's Loan | $\displaystyle 2,00,000$ | Less : Provision for doubtful debts $\displaystyle 5,000$ | $\displaystyle 90,000$ |
| Creditors | $\displaystyle 1,50,000$ | Bank | $\displaystyle 70,000$ |
| $\displaystyle 14,30,000$ | $\displaystyle 14,30,000$ |
On the above date, Nyaya retired from the firm on the following terms : (i) Goodwill of the firm was valued at ₹ $\displaystyle 1,20,000$ and N a a's share of the same was to be adjusted through the capital accounts of remaining partners. (ii) Land and Building was to be increased by $\displaystyle 50$,000. (iii) Plant and Machinery will be depreciated by $\displaystyle 10$%. (iv) All debtors were found to be good, hence provision for bad debts was not required. (v) Investments of $\displaystyle 65,000$ were unrecorded. (vi) Amount payable to Nyaya was transferred to his loan account. Prepare Revaluation Account and Partners' Capital Accounts on Nyaya's retirement.
Marking-scheme solution
In the books of Uma, Umesh and Daya
Journal
Date Particulars L.F Dr. Cr.
Amount (₹) Amount (₹)
$\displaystyle 2024$ Bank A/c Dr. $\displaystyle 12,00,000$
March $\displaystyle 31$ To Daya’s Capital A/c $\displaystyle 10,00,000$
To Premium for Goodwill A/c $\displaystyle 2,00,000$
(Cash brought in by Daya as capital
and share of goodwill)
,, Premium for Goodwill A/c Dr. $\displaystyle 2,00,000$
To Uma’s Capital A/c $\displaystyle 80,000$
To Umesh’s Capital A/c $\displaystyle 1,20,000$
(Goodwill brought in by Daya shared by
old partners in the ratio of their sacrifice)
,, Land & Building A/c Dr. $\displaystyle 2,00,000$
To Revaluation A/c $\displaystyle 2,00,000$
(Increase in the value of assets recorded
on revaluation)
,, Revaluation A/c Dr. $\displaystyle 10,000$
To Furniture A/c $\displaystyle 10,000$
(Decrease in the value of assets recorded
on revaluation)
,, Bad Debts A/c Dr. $\displaystyle 3,000$
To Debtors A/c $\displaystyle 3,000$
(Bad debts written off)
,, Provision for doubtful debts A/c Dr. $\displaystyle 3,000$
To Bad Debts A/c $\displaystyle 3,000$
(Bad debts adjusted from the provision)
,, Revaluation A/c Dr. $\displaystyle 1,850$
To Provision for doubtful debts A/c $\displaystyle 1,850$
(Provision for doubtful debts created)
,, Outstanding Electricity Bill A/c Dr. $\displaystyle 10,000$
To Bank A/c $\displaystyle 10,000$
(Amount paid for outstanding
electricity bill)
Revaluation A/c Dr. $\displaystyle 1,88,150$
,, To Uma’s Capital A/c $\displaystyle 75,260$
To Umesh’s Capital A/c $\displaystyle 1,12,890$
(Profit on revaluation of assets and
re-assessment of liabilities transferred
partners in old profit sharing ratio)
,, General Reserve A/c Dr. $\displaystyle 75,000$
To Uma’s Capital A/c $\displaystyle 30,000$
To Umesh’s Capital A/c $\displaystyle 45,000$
(Undistributed profit transferred to partners
in old ratio)
,, Workmen Compensation Fund A/c Dr. $\displaystyle 25,000$
To Uma’s Capital A/c $\displaystyle 10,000$
To Umesh’s Capital A/c $\displaystyle 15,000$
(Workmen compensation fund transferred
to partners in old ratio)
Or
Q.(b) Naval, Nyaya and Nritya………..
Ans.
Dr. Revaluation A/c Cr.
Particulars Amount (₹) Particulars Amount (₹)
To Plant & Machinery A/c $\displaystyle 20,000$ By Land & Building A/c $\displaystyle 50,000$
To Gain on Revaluation By Investment A/c $\displaystyle 65,000$
transferred to:- By Provision for doubtful
Naval’s Capital A/c $\displaystyle 30,000$ debt A/c $\displaystyle 5,000$
Nyaya’s Capital A/c $\displaystyle 50,000$
Nritya’s Capital A/c $\displaystyle 20,000$ $\displaystyle 1,00,000$
$\displaystyle 1,20,000$ $\displaystyle 1,20,000$
Dr. Partners’ Capital A/c Cr.
Particulars Naval Nyaya Nritya Particulars Naval Nyaya Nritya
(₹) (₹) (₹) (₹) (₹) (₹)
To Nyaya’s $\displaystyle 36,000$ $\displaystyle 24,000$ By Balance b/d $\displaystyle 2,00,000$ $\displaystyle 3,00,000$ $\displaystyle 5,00,000$
Capital A/c
To Nyaya’s Loan $\displaystyle 4,50,000$ By Revaluation $\displaystyle 30,000$ $\displaystyle 50,000$ $\displaystyle 20,000$
A/c A/c
To Balance c/d $\displaystyle 2,18,000$ $\displaystyle 5,12,000$ By General $\displaystyle 24,000$ $\displaystyle 40,000$ $\displaystyle 16,000$
Reserve A/c
By Naval’s $\displaystyle 36,000$
Capital A/c
By Nritya’s $\displaystyle 24,000$
Capital A/c
$\displaystyle 2,54,000$ $\displaystyle 4,50,000$ $\displaystyle 5,36,000$ $\displaystyle 2,54,000$ $\displaystyle 4,50,000$ $\displaystyle 5,36,000$
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