S.

50 Double Entry Book Keeping-CBSE XI

terms of retirement were
On the above date, Kumar retired. The and to Aarti for 4,000
Prem for 8,000
goodwill to
umarsold his share of 1,000 and building
by 7,.000.
to be undervalued by
Stock wasfound
(ii) Investments were sold for 11,000.
of 7,000.
(iv) There was an unrecorded creditor which was contributed by Prem
Kumar in cash
was paid to
() An amount of 30,000
balance amount
of Kumar was settled by accepting
of 2:1. The
and Aarti in the ratio
a Bill of Exchange in favour of Kumar. and the Balance Sheet of
Accounts of partners
repare the Revaluation Account, Capital (CBSE2020
the reconstituted firm.
Capital
Accounts: Prem- 48,000
Ans. Gain (Profit) 2,000; Partners'
on Revaluation-7

Aarti- 28,400; Balance Sheet Total-7

99,000.
50%, 30%% and 20% respectively
sharing profits
as
Q.5. Kavya, Manya and Navita were partners
stood as follows:
On 31st March, 2016, their Balance Sheet
Assets
Liabilities 140,000 Fixed Assets
8.90,00
Creditors 2.00,000
General Reserve 1,00,000 Investments
Stock 1,30,000
Capitals: 4,00,000
Kavya 6,00,000 Debtors 30,000 3,70,000
5,00,000 Provision for Bad Debts
Less:
Manya 1,50,00
4,00,000 15,00,000 Bank
Navita
17,40,000 17.40,000
and Navita agreed to continue the business on
On the above date, Kavya retired and Manya
the following terms:
7 and it was decided to adjust Kavya's share of
(a) Firm's goodwill was valued at 60,000
in the Capital Accounts of continuing partners
goodwill
(b) There claim for Workmen's Compensation to the extent of 4,000.
was a

(c) Investments were revalued R2,13,000.

at

10%.
(d) Fixed Assets were to be depreciated by
(e) Kavya was to be paid 20,000 through a bank draft and the balance was transferred
to her loan account which will be paid in two equal annual instalments together with
interest 10% p.a.
Accounts and Kavya's Loan Account till it is
Prepare Revaluation Account, Partners' Capital
(CBSE Delhi 2018 C)
finally paid.
Ans.
Dr.
REVALUATION ACCOUNT

Particulars Particulars
4,000 By Investments Ac 13,000
To Workmen's Compensation Claim A/c
To Fixed Assets A/c 89,000 By Loss on Revaluation transferred to:
Kavya's Capital A/c 40,000
Manya's Capital A/c 24,000
Navita's Capital Alc 16.000 80,000
93,000 93,000
 Scanner 5.51

Dr. PARTNERS' CAPITAL ACCoUNTS Cr

Particulars
Kavya Manya Navita Particulars Kavya Manya Navita

To Revaluation A/c 40,000 24,000 16,000 By Balance b/d 6,00,000 5,00,000 4,00,000
To Kavya's Capital A/c 18,000 12,000 8y General Reserve A/c 50,000 30,000 20,000
(WN 1 and 2) By Manya's Capital A/c 18,000
To Bank A/c (Paid) 20,000 By Navita's Capital A/c 12,000
To Kavya's Loan A/c 6,20,000
To Balance cld
4,88,000 3,92,000|
6,80,000 5,30,000 4,20,000 6.80,000 5,30.000 4.20,000

Dr KAVYA'S LOAN ACCOUNT Cr

Date Particulars Date Particulars
2016 2016
March 31 To Balance cld 6,20,000 March 31 By Kavya's CapitalA/c 6,20,000
2017 2016
March 31 To BankA/cR3,10000+R62,000) 3,72,000 April 1 By Balanceb/d 6,20,000
March 31To Balance cld 3,10,000 2017
March 31 By Interest A/c 62,000
R6,20,000 x 10/100)
6,82,000 6,82,000
2018 2017
March 31 To Bank AWc 341,000 April By Balance bld 3,10,000
R3,10.000+731,000) 2018
March 31 By Interest A/c 31,000
R3,10,000 x 10/100)
3,41,000
3,41,000
Working Notes:
will be the same as their old profit-sharing ratio
1. Unless agreed otherwise, gaining ratio of remaining partners
(In the given question, it is 3:2).
30,000, which is contributed by Manya and Navita in their
2. Kavya's share of goodwill 60,000
= x 5/10 =
gaining ratio. Thus,
Manya's contribution =7 30,000 x 3/5=7 18,000;
Navita's contribution =7 30,000 x 2/5=R12,000.

Adjustment of Capital
and losses in the ratio of
Q.6. Leena, Madan and Naresh were partners in a firm sharing profis
follows:
2:2:3. On 31st March, 2015, their Balance Sheet was as
BALANCE SHEET as at 31st March, 2015

Liabilities Assets

Trade Creditors 1,60,000 Land and Building 10,00,000

Bank Overdraft 44,000 Machinery 5,00,000
Long-term Debts 4,00,000 Furniture 7,00,000
Employees Provident Fund 76,000 Investments 2,00,000
Capital A/cs: Closing Stock 8,00,000
Sundry Debtors 4,00,000
Leena 12,50,000
Madan 8,00,000 Bank 80,000
Naresh 10,50,000 31,00,000 Deferred Advertisement Expenditure 1,00,000
37,80,000 37,80,000
 S.52 Double Entry Book Keeping-CBSE XII

On 31st March, 2015, Madan retired from the firm and the remaining partners decided to carry
on the business. It was decided to revalue assets and liabilities as under:
) Land and Building be appreciated by 2,40,000 and Machinery be depreciated by 10%
i) 50% of Investments were taken over by the retiring partner at book value
A n old customer Mohit whose account was written off as bad debt had promised to pay
7,000 in settlement of his full debt of R 10,000
(iv) Provision for Doubtful Debts was to be made at 5% on debtors.
(v) Closing Stock will be valued at market price which is 1,00,000 less than the book value
(vi) Goodwill of the firm be valued at5,60,000 and Madan's share of goodwill be adjusted
in the accounts of Leena and Naresh. Leena and Naresh decided to share future
profits
and losses in the ratio of 3:2
(vii) The total capital of the new firm will be 32,00,000 which will be in the proportion of
the profit-sharing ratio of Leena and Naresh.

(vii) Amount due to Madan was settled by accepting a Bill of Exchange in his favour payable
after 4 months.

PrepareRevaluation Account, Partners'

Capital Accounts and Balance Sheet of the firm
Madan's retirement. after
(AI 2016 C)
Ans.
Dr.
REVALUATION ACCOUNT
Particulars
Particulars
To Machinery A/c
To Closing Stock A/c
50,000 By Land and Building A/c
2,40,000
1,00,000
To Provision for Doubtful Debts A/c
To Gain (Profit) on Revaluation transferred to: 20,000
Leena's Capital A/c 20,000
Madan's Capital A/c
Naresh's Capital A/c
20,000
30,000 70,000
2,40,000
240,000
Dr.
PARTNERS'CAPITAL ACCOUNTS
Particulars Leena Madan Cr.
Naresh Particulars
Leena Madan Naresh
To Deferred Advertisement
By Balance b/d
Expenses Alc 28,571 28,571 42,858 By Revaluation A/c (Gain) 12,50,000 8,00,000 10,50,000
To Madan's Capital Alc 1,60.000 By Leena's Capital A/c 20,000 20.000 30,000
To Naresh's Capital A/c 16,000 (WN 1,2 and 3) 1.60.000 16,000
To Investments Ac
1,00.000 By Bank A/c
To Bills Payable Alc 8.51,4429
8,54,571 2,26,858
(Balancing Figure)
To Balance cld (WN 4) 19,20,000 12.80,000
21.24571 9,80,000 13,22,858 21,24,571 9,80,000 13,22,858
 Scanner S.53

BALANCE SHEET as at 1st April, 2015

Liabilities
Assets
Trade Creditors 1.60,000 Landand Building 12,40,000
Bank Overdraft 44,000 Machinery 450.000
8.51,429 Funiture 7,00,000
Bills Payable
7,00.000
Long-termDebts 4.00.000 ClosingStock
Employees' Provident Fund 76,000 Investments 1,.00,.000
Capital A/cs: Debtors 4,00,000
19,20,000 Provision for DoubtfulDebts 20,000 3.80,000
Leena Less:
12,80,00032,00.000 Bank (WN 5) 11,61,429
Naresh

47,31429 47.31429

Working Notes:

1. Calculation of Gain ofeach Partner:

New Profit Share-Old Profit Share
Gain of a Partner=
2 3 14-15-1.
Leena's Gain=57 21-10
2
35 35 Naresh's
Gain 7 35 35
will compensate
sacrificed. As Leena is the only gaining partner, she
Negative result indicates that Naresh has
not only the retiring partner (Madan)
but also the sacrificing partner (Naresh).
x 1/35=7 16,000.
Naresh's Share of Goodwill 75,60,000
=
2.

3. Madan's Share of Goodwill =

5,60,000 x 2/7 7 1,60,000.
of the Partners in the New Firm:
4. Capital
Leena's Capital in New Firm =R 32,00,000x 3/5=719,20,000
x 2/5=R 12,80,000.
Naresh's Capital in New Firm=R 32,0,000
BANK ACCOUNT
5.Dr.
Particulars Particulars
11,61,429
To Balance b/d 80,000 By Balance cld
To Leena's Capital A/c 8,54,571
To Naresh's Capital A/c 2,26,858
11,61,429
11,61,429
bad debt has promised to
old customer Mohit whose account was written off as
6, (i/),
Adjustment No. an
be treated as debtor and
was in writing, it could
pay7,000, is not to be treated as debtors. If this promise
for Doubtful Debts would
Revaluation Account would have credited by
7,000. And also, Amount of Provision
revaluation would be 76,650.
In effect Gain (Profit) on
have increased by 350 (i.e, 5% of 7,000).
losses in the ratio of
in a firm sharing profits and
Q.7. Radha, Manas and Arnav were partners
March, 2019 was as follows:
3:1:1. Their Balance Sheet as at 31st
2019
MANAS AND ARNAV as at 31st March,
BALANCE SHEET OF RADHA,

Liabilities Assets
Furniture 4,60,000
Capital A/cCS 2,00.000
Investments
Radha 4,00,000 240.000
Stock
Manas 3,00.000 2,20,000
Arnav 2,00,000 9,00,000 Debtors
2,10,000
nvestment Fluctuation Fund 1,10,000Less: Provisionfor Doubtful Debts 10.000
Creditors 2.50.000 Cash 1.50.000
12.60,000
12,60,000
S.54 Double Entry Book KeepingCBSE XII
Manas retired on 1st April, 2019. It was agreed that:
(6) Stock was to be appreciated by 20%
() Provision for Doubtful Debts was to be increased to 15,000
(Gil) Value of fumiture was to be reduced by 3,000
(iv) Market value of investments was 1,90,000.
() Goodwill of the firm was valued at 2,00,000 and Manas's share was adjusted in the
accounts of Radha and Amav.
(vi) Manas was paid R68,000 in cash and the balance was transferred to his loan account,
(vi) Capitals of Radha and Arnav were to be in proportion to their new profit-sharing
ratio. Surplus/deficit, if any, in their capital accounts was to be adjusted
Current Accounts.
through
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the
reconstituted firm. (CBSE 2020)
Ans. Gain (Profit) on Revaluation:R 40,000; Radha's Current A/c (Dr. Balance): R 50,000;
Current A/c (Cr.
Armav's
Balance): 50,000; Manas's Loan Account: 3,00,000; Balance
12.72,000.
Sheet Total:
Q.8. Xavier, Yusuf and Zaman were
partners in a firm sharing profits in the ratio of 4 :3:2.
On 1st April, 2014, their Balance Sheet was as
follows:
Liabilities
Sundry Creditors
Assets
41,400 Cash at Bank
Capital A/cs: 33,000
Sundry Debtors 30,450
Xavier
Yusuf
1,20,000 Less: Provision for Bad Debts
1,050
90,000 29,400
Stock
Zaman 48,000
60,000 2.70,000 Plant and Machinery
Land and Building 51,000
3,11400 1.50,000
3,11,400
Yusuf had been
suffering from ill
health and thus gave notice of
An agreement retirement from the
was, therefore, entered into as on 1st firm.
as follows: April, 2014, the terms of which
were
() That land and building be appreciated by 10%.
(i) The provision for bad debts is no
longer necessary.
(ii) That stock be
appreciated by 20%.
(iv) That goodwill of the firm be fixed at
intoXavier's and Zaman's 54,000. Yusuf's share of the
the ratio of 2:1. Capital Accounts, who are going to sharesame be adjusted
future profits in
(v) The entire capital of the
newly constituted firm be
necessary cash so that the future capitals of Xavierreadjusted by bringing in or
and Zaman will paving
sharing ratio. be in their profit
Prepare Revaluation Account and Partners' Capital Accounts.
(AI 2015)
 Scanner S.55

Ans.
Dr. REVALUATION ACCOUNT
Particulars
Particulars
To Gain (Profit) transferred to: By Land and Building Alc 15,000
Xavier's Capital A/c 11400 By Provision for Bad Debts Ac 1.050
Yusuf's Capital AC 8,550 By Stock A/c 9.600
Zaman's Capital A/c 5,700 25,650
25,650 25,650

Dr. PARTNERS CAPITAL ACCOUNTS Cr

Particulars Xavier Yusuf Zaman Particulars Xavier Yusuf Zaman

To Yusuf's Capital A/c 12,000 6,000 By Balance bld 1.20,000 90,000 60,000
(WN 1and 2) By Revaluation A/c-Gain 11,400 8,550 5,700
To Yusuf's Loan A/c 1,16,550 By Xavier's Capital A/c 12,000
To Balance cdd 1,19400 59,700 By Zaman's Capital Alc 6.000
1,31400 116.550 65,700
1,31,400 1,16550 65,700
Working Notes:

1. Calculation of Gaining Ratio:

Xavier's Gain 24-18-12-Zaman's Gain= -

3
Gaining Ratio 7 0r 2:1

18,000 (i.e., 54,000 x 3/9) will be contributed by Xavier and Zaman in their
2. Yusuf's Share of Goodwill
gaining ratio of 2:1.
Yusuf's Retirement:
3. Calculation of Total Capital of New Firm after 1,19,400
Adjusted Old Capital of Xavier R(1,20,000+11400-12,000)
59,700
Adjusted Old Capital of Zaman R(60,000+5,700-6,000)
Total Capital of New Firm after Yusuf's Retirement 1.79,100

Calculation of cash to be brought in or paidof: Zaman

Xavier
Particulars

1,19,400 59,700
a) New Capital ( 1,79,100 in the ratio of 2:1)
1,19,400 59,700
(b) Adjusted Old Capital Nil Nil
) Cash to be brought in (paid off)(a-b)

7.DEATH OF A PARTNER

in a firm sharing profits and losses in the ratio of

1Danish, Ana and Pranjal are partners
5:3:2. Their books are closed on March 31st every year.
executors of Danish are entitled to:
Danish died 30th September, 2019. The
on
) His share of Capital, ie., T5,00,000 along with his share of goodwill. The total goodwill

of the firm was valtued at 60,000.

 S.56 Double Entry Book Keeping-CBSE
XI
(i) His share of profit up to his date of death on the basis of sales till date of death.
for the year ended March
Sales
31, 2019 was 2,00,000 and profit for the same year was
10% on sales, Sales shows a
growth trend of 20% and percentage of profit earningg is
reduced by 1%
(il) Amount payable to Danish was transferred to his executors.
Pass necessary Journal entries and show the workings clearly. (CBSE Sample Paper 2019)
Ans. ) For Adjustment of Goodtoill:
Dr. Ana's Capital A/c by 18,000 and Pranjal's Capital Alc by 12,000;
Cr. Danish's Capital
A/c by 30,000.
(i) For Danish's Share of Profit:
Dr. Profit & Loss
Suspense A/c and Cr. Danish's Capital A/c by 7 5,400.
(i) For Transfer of Balance of Danish's Capital to Danish's Executor's Alc:
Dr.
Danish's Capital A/c and Cr. Danish's Executor's A/c by 5,35,400.
Hint: Calculation of Danish's share of Profit till the
date of his death:
Expected Sales for 2019-20 7
2,00,000+ 20% of R2,00,000
2,00,000+ 40,000 7 2,40,000
=

Expected Profit 9% for 2019-20 10%-1%= 99%

Thus, Danish's share of Profit R
2,40,000 x 9/100 x 5/10 x 6/12 T 5,400.] =

Q.2. Shirish, Harit and Asha were

partners in a firm sharing profits in the ratio
died on 30th June, 2018. On this
date their Balance Sheet was of 5:4: 1. Shirish
follows:
BALANCE SHEET OF SHIRISH, HARIT
AND ASHA
as at 31st March, 2018
Liabilities
Assets
Capitals:
Shirish Plant and Machinery
Harit
1,00,000 Stock 5,60,000

Asha
2,00,000 Debtors 90,000

Profits for the year 2017-18

3,00.000 6,00,000 Cash 10,000

80,000 40,000
Bills Payable
20,000
7,00,000
7,00,000
According to the Partnership Deed, in addition to deceased
is entitled to: partner's capital, his executor
(i) Share in profits in the year of death on the
basis of
Profit for the year 2016-17 was 760,000. average of last two
years' profit.
Goodwill of the firm was to be valued at 2 years'
purchase ofaverage of last two years'
Prepare Shirish's Capital Account to be presented to his executor. profits.
(CBSE 2019)
Ans. Amount transferred to Shirish's Executor's Account 72,18,750.
 Scanner S.57

0.3. Pranav, Karan and Rahim were partners in a firm sharing profits and losses in the ratio of
2:2:1.On 31st March, 2017 their Balance Sheet was as follows:

BALANCE SHEET OF PRANAV, KARAN AND RAHIM as on 31st

March, 2017
Liabilities
Assets
Creditors 3,00,000 Fixed Assets 450.000
General Reserve 1.50.000 Stock 1.50000
Capitals: Debtors 2.00.000
Pranav 2,00,000 Bank 1,50,000
Karan 2.00,000
Rahim 1,00,000 5,00,000
9,50,000 9,50.000
Karan died on 12th June, 2017. According to the Partnership Deed, the legal representatives
of the deceased partner were entitled to the
following:
)Balance in his Capital Account.
() Interest on Capitale 12% p.a.
(Gii) Share of goodwill. Goodwill of the firm on Karan's death was valued at 60,000.
(v) Share in the profit of the firm till the date of his death, calculated on the basis of last
year's profit. The profit of the firm for the year ended 31st March, 2017 was5,00,000
Prepare Karan's Capital Account to be presented to his representatives.
(Delhi 2018
Ans.
Dr. KARAN'S CAPITAL ACCOUNT
Particulars Particulars
To Karan's Executors' A/c (Balancing Figure) 3,28,800 By Balanceb/d 2,00,000
By General Reserve A/c (R 1,50,000 x 2/5) 60,000
By Profit &Lo5s Suspense Ac 4,800
(Interest on Capital) (WN 1)
By Pranav's Capital A/c (WN 2) 6,.000
By Rahims Capital AVc (WN 2) 8,000
By Profit &Loss Suspense A/c (WN 3) 40,000
3,28,800 3.28800
Working Notes:
aran died on 12th June, 2017. Number of days from last Balance Sheet (ie, 31st March, 2017) tillthe date
ofdeath 30+31+1273 days.
erest on Capital 2,00,000 x 73/365 x 12/100=R4,800.
2.
arans Share of Goodwill=60,000x 2/5 R 24,000, which is contributed by Pranav and Rahim in their
gaining ratio, i.e.,
2:1.Thus,
ranav's contribution 24,000 x2/3 16,000;
Rahim's contribution 7 24,000 x 1/3- 8,000.
n sshare of profit til the date of death 5,00,000 x 73/365 x 2/5-7 40,000.
S.58 Double Entry Book Keeping-CBSE XI
firm sharing profits and losses in the ratio of
Q.4. Monu, Nigam and Shreya were partners in a
4:3:1.The firm closes its books on 31st March every year. As per the terms of Partnershin
hip
Deed on the death of any partner, the share of goodwill of the deceased partner will be
caleulated on the basis of 50% of the net profits credited to that partners Capital Account
unt
during the last four completed years before death.
Monu died on 1st July, 2015.
The profits for last four years were:

2012-13 2013-14 2014-15

Year 2011-12
1,05,000 30,000 84,000
Profit 97,000
His share of profit in the year of his death was to be calculated on the basis of sales. Sales
for the year ended 31st March, 2015 amounted to 21,00,000. From 1st April, 2015 to
30th June, 2015 the firm's sales were R 2,00,000.
Pass necessary Jourmal entries relating to the amount of goodwill and profit to be transferred
to Monu's Capital Acoount. Also show your workings clearly. (AI 2016 C

Ans. JOURNAL
Date Particulars LF. Dr.) Cr.
2015
July NigamsCapital A/c .Dr. 59,250
Shreya's Capital A/c .Dr. 19,750
To Monu's Capital A/c
(Monu's share of goodwill adjusted in Capital Accounts of
79,000
Nigam and Shreya in their gaining ratio of 3:1)32
Profit &Loss Suspense A/c .Dr. 4,000
To Monu's Capital A/c
4,000
Monu's share of estimated profit till the date of his death credited)
Working Notes:
1. Calculationof Goodwilland Monus Share of Goodwill:
Monu's Share of Goodwill 50/100 [R 97,000+ 1,05,000+7
30,000+84,000) x 4/8]= 79,000.
2 Calculation of Monu' Share of Profit till the date of death:
Monu's Share of Pront 5 84,000 (Profit) x 2,00,000x 4/8 4,000.
21,00,000 (Sales)
Q.5. A, B and Cwere partners in firm sharing profits and
a
losses in the ratio of 3:
C died on 30th June, 2016. After all the 2:1
necessary adjustments, his Capital
showed a credit balance of 70,600. C's executor was Account
andthe balance in three equal yearly instalments paid 10,600 on 1st July,
2016
starting from 30th June, 2017 with
interest 10% p.a. on the unpaid amount. 1The firm closes its
books on 31st March
every yea
Prepare C's Executors Account till the amount is finally paid. (CBSE 2019 )