CBSE 2025, Set 1

Question

(b) Ashish, Vinit and Reema were partners sharing profits and losses in the ratio of 2:2:1. Their Balance Sheet on 31st March, 2024 was as follows:

| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals: | | Patents | 80,000 |
| Ashish 2,00,000 | | Furniture | 3,00,000 |
| Vinit 2,00,000 | | Stock | 1,70,000 |
| Reema 1,00,000 | 5,00,000 | Debtors 80,000 | |
| General Reserve | 50,000 | Less: Prov 8,000 | 72,000 |
| Bills Payable | 80,000 | Cash | 48,000 |
| Creditors | 40,000 | | |
| **Total** | **6,70,000** | **Total** | **6,70,000** |

On the above date, Vinit retired on the following terms:
(i) Goodwill of the firm was valued at ₹ 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 3:2.
(ii) Value of stock was to be reduced by ₹ 10,000.
(iii) Patents are found undervalued by 20%.
(iv) Vinit was paid ₹ 20,000 immediately on retirement and the balance was transferred to his loan account carrying interest @ 8% p.a.

Pass necessary journal entries on Vinit's retirement.

Edvaya · Accepted Answer

The correct answer is Subjective. **Books of Ashish, Vinit and Reema - Journal** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Patents A/c ...Dr.     To Revaluation A/c (Patents were found undervalued by 20%. Note: Book value 80k is 80% of original. True value=1,00k. Increase=20k) | | 20,000 | 20,000 | | | Revaluation A/c ...Dr.     To Stock A/c (Value of stock reduced) | | 10,000 | 10,000 | | | Revaluation A/c ...Dr.     To Ashish's Capital A/c     To Vinit's Capital A/c     To Reema's Capital A/c (Profit on revaluation credited to partners' capital accounts in 2:2:1) | | 10,000 | 4,000 4,000 2,000 | | | General Reserve A/c ...Dr.     To Ashish's Capital A/c     To Vinit's Capital A/c     To Reema's Capital A/c (General Reserve credited to partners in 2:2:1) | | 50,000 | 20,000 20,000 10,000 | | | Ashish's Capital A/c ...Dr. Reema's Capital A/c ...Dr.     To Vinit's Capital A/c (Vinit's share of goodwill 60k × 2/5 = 24k adjusted in the gaining ratio 1:1) | | 12,000 12,000 | 24,000 | | | Vinit's Capital A/c ...Dr.     To Cash A/c     To Vinit's Loan A/c (Vinit paid 20k, bal 2,28,000 trans to loan A/c) | | 2,48,000 | 20,000 2,28,000 |

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Accountancy > Accounting For Partnership Firms > Retirement Of A Partner

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Liabilities	Amount (₹)	Assets	Amount (₹)
Capitals:		Patents	80,000
Ashish 2,00,000		Furniture	3,00,000
Vinit 2,00,000		Stock	1,70,000
Reema 1,00,000	5,00,000	Debtors 80,000
General Reserve	50,000	Less: Prov 8,000	72,000
Bills Payable	80,000	Cash	48,000
Creditors	40,000
Total	6,70,000	Total	6,70,000