Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
X, Y and Z were equal partners. On 31st March, 2025, their books showed General Reserve ₹26,000; Workmen Compensation Reserve ₹32,000; Profit & Loss A/c (Dr.) ₹11,000 and Advertisement Suspense A/c ₹2,000. On that date Z retired and X and Y decided to share future profits in the ratio of 3 : 2. Partners decided to show the accumulated profits, losses and reserves in the reconstituted firm’s Balance Sheet at their original values. Pass an adjustment entry.
Net accumulated profit = (General Reserve 26,000 + Workmen Compensation Reserve 32,000) – (P&L Dr. 11,000 + Advertisement Suspense 2,000) = ₹58,000 – ₹13,000 = ₹45,000. Gain/(Sacrifice): X = 1/3 – 3/5 = 4/15 (Gain); Y = 1/3 – 2/5 = 1/15 (Gain); Z = 1/3 (Sacrifice, 5/15).
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| X’s Capital A/c Dr. (45,000 × 4/15) | 12,000 | |||
| Y’s Capital A/c Dr. (45,000 × 1/15) | 3,000 | |||
| To Z’s Capital A/c (45,000 × 5/15) | 15,000 | |||
| (Net accumulated profits, losses and reserves adjusted through capitals in the gaining/sacrificing ratio) |
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.29 - 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.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Chapter 5 Q.29 - Retirement of a Partner" instantly.