CBSE 2025, Set 2

Question

(b) Geeta, Sita and Meeta were partners sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet on 31st March, 2024 was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) | |---|---|---|---| | Capitals: | | Patents | 1,00,000 | | Geeta 3,00,000 | | Furniture | 2,50,000 | | Sita 2,00,000 | | Stock | 1,50,000 | | Meeta 1,50,000 | 6,50,000 | Debtors 1,00,000 | | | General Reserve | 60,000 | Less: Prov 10,000 | 90,000 | | Bills Payable | 50,000 | Cash | 70,000 | | Creditors | 40,000 | Profit & Loss A/c | 1,40,000 | | **Total** | **8,00,000** | **Total** | **8,00,000** |

On the above date, Sita retired on the following terms:
(i) Goodwill of the firm was valued at ₹ 1,00,000 and the same was adjusted into the capital accounts of Geeta and Meeta who will share profits in future in the ratio of 3:2.
(ii) Value of stock was to be reduced by ₹ 20,000.
(iii) Patents are found undervalued by 20%.
(iv) Sita was paid ₹ 50,000 immediately on retirement and the balance was transferred to her loan account carrying interest @ 8% p.a.

Pass necessary journal entries on Sita's retirement.

Edvaya · Accepted Answer

The correct answer is Subjective. **Books of Geeta, Sita and Meeta - Journal** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Patents A/c ...Dr.     To Revaluation A/c (Patents were found undervalued by 20%. Book value 1,00,000 is 80% of original. True value=1,25,000. Increase=25,000) | | 25,000 | 25,000 | | | Revaluation A/c ...Dr.     To Stock A/c (Value of stock reduced) | | 20,000 | 20,000 | | | Revaluation A/c ...Dr.     To Geeta's Capital A/c     To Sita's Capital A/c     To Meeta's Capital A/c (Profit on revaluation credited to partners in 5:3:2) | | 5,000 | 2,500 1,500 1,000 | | | General Reserve A/c ...Dr.     To Geeta's Capital A/c     To Sita's Capital A/c     To Meeta's Capital A/c (General Reserve credited to partners in 5:3:2) | | 60,000 | 30,000 18,000 12,000 | | | Geeta's Capital A/c ...Dr. Sita's Capital A/c ...Dr. Meeta's Capital A/c ...Dr.     To Profit & Loss A/c (Accumulated loss written off in 5:3:2) | | 70,000 42,000 28,000 | 1,40,000 | | | Geeta's Capital A/c ...Dr. Meeta's Capital A/c ...Dr.     To Sita's Capital A/c (Sita's share of goodwill 1,00,000 × 3/10 = 30,000 adjusted in the gaining ratio 1:2. Geeta=10k, Meeta=20k) | | 10,000 20,000 | 30,000 | | | Sita's Capital A/c ...Dr.     To Cash A/c     To Sita's Loan A/c (Sita paid 50,000, bal 1,57,500 trans to loan A/c. *Cap bal = 2L+1.5k+18k-42k+30k=2,07,500*) | | 2,07,500 | 50,000 1,57,500 |

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Accountancy > Accounting For Partnership Firms > Retirement Of A Partner

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Liabilities	Amount (₹)	Assets	Amount (₹)
Capitals:		Patents	1,00,000
Geeta 3,00,000		Furniture	2,50,000
Sita 2,00,000		Stock	1,50,000
Meeta 1,50,000	6,50,000	Debtors 1,00,000
General Reserve	60,000	Less: Prov 10,000	90,000
Bills Payable	50,000	Cash	70,000
Creditors	40,000	Profit & Loss A/c	1,40,000
Total	8,00,000	Total	8,00,000