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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Punit, Ramit and Akshit were partners sharing profits equally. Akshit retired on 1st April, 2024. Punit and Ramit decided to continue the business and share profits in the ratio of 3 : 2. They also decided to give effect to the change in values of assets and liabilities without changing their book values. The book values and revised values were: Land ₹5,50,000 / ₹8,50,000; Building ₹2,50,000 / ₹2,10,000; Computers ₹1,00,000 / ₹70,000; Computer Softwares ₹5,00,000 / ₹4,00,000; Sundry Creditors ₹70,000 / ₹60,000; Workmen Compensation Claim – / ₹5,000. Pass an adjustment entry.
Net gain on revaluation = (Land 3,00,000 + Creditors 10,000) – (Building 40,000 + Computers 30,000 + Software 1,00,000 + WCC 5,000) = ₹3,10,000 – ₹1,75,000 = ₹1,35,000. As book values are unchanged, this is adjusted in the gaining/sacrificing ratio: Punit gains 1/3 – 3/5 = 4/15; Ramit gains 1/3 – 2/5 = 1/15; Akshit sacrifices 1/3 (5/15).
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2024 Apr 1 | Punit’s Capital A/c Dr. (1,35,000 × 4/15) | 36,000 | ||
| Ramit’s Capital A/c Dr. (1,35,000 × 1/15) | 9,000 | |||
| To Akshit’s Capital A/c (1,35,000 × 5/15) | 45,000 | |||
| (Net gain on revaluation adjusted through capitals in the gaining/sacrificing ratio without altering book values) |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 5 Q.26 - Retirement of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Retirement of a Partner.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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