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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
The Partnership Deed of C and D, who are equal partners, provides that any partner may retire on giving six months’ notice. The retiring partner is to be paid: (a) the amount to the credit of his Capital and Current Accounts; (b) his share of profit to the date of retirement, on the basis of the average profit of the three preceding completed years; (c) half the amount of the goodwill of the firm, calculated at 1½ times the average profit of the three preceding completed years. C gave notice on 31st March, 2024 to retire on 30th September, 2024, when his Capital Account stood at ₹6,000 (Cr.) and his Current Account at ₹500 (Dr.). Profits for the three years ended 31st March were: 2022 – ₹2,800; 2023 – ₹2,200; 2024 – ₹1,600. What amount is due to C?
Average profit = (2,800 + 2,200 + 1,600) / 3 = ₹2,200. C’s share of profit for 6 months = 2,200 × 1/2 × 6/12 = ₹550. Firm’s goodwill = 2,200 × 1½ = ₹3,300; C’s share (half) = ₹1,650, borne by D.
C’s CURRENT ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Balance b/d | 500 | By Profit & Loss Suspense A/c (share of profit) | 550 |
| To C’s Capital A/c (transfer) | 1,700 | By D’s Current A/c (share of goodwill) | 1,650 |
| Total | 2,200 | Total | 2,200 |
C’s CAPITAL ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To C’s Loan A/c | 7,700 | By Balance b/d | 6,000 |
| By C’s Current A/c | 1,700 | ||
| Total | 7,700 | Total | 7,700 |
Amount due to C (transferred to his Loan Account) = ₹7,700.
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.30 - 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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