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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Alfa, Beta and Gama are in partnership sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet on 1st April, 2025, the day Beta decided to retire, was as follows: Capitals – Alfa ₹3,00,000, Beta ₹2,00,000, Gama ₹2,00,000; General Reserve ₹1,00,000; Sundry Creditors ₹1,00,000 (Total ₹9,00,000); Building ₹2,50,000, Machinery ₹1,50,000, Investments ₹2,50,000, Debtors ₹1,00,000, Stock ₹50,000, Cash at Bank ₹1,00,000 (Total ₹9,00,000). Terms of retirement: (i) Beta takes goodwill from Alfa for ₹30,000 and from Gama for ₹40,000 for foregoing his share of profits. (ii) Stock to be appreciated by 20% and Building by ₹50,000. (iii) Investments were sold for ₹2,70,000. (iv) Beta is paid by bank draft. Prepare the Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.
REVALUATION ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Profit transferred to: | By Building A/c | 50,000 | |
| Alfa’s Capital A/c 40,000 | By Investments A/c | 20,000 | |
| Beta’s Capital A/c 24,000 | By Stock A/c | 10,000 | |
| Gama’s Capital A/c 16,000 | 80,000 | ||
| Total | 80,000 | Total | 80,000 |
PARTNERS’ CAPITAL ACCOUNTS
| Particulars | Alfa | Beta | Gama | Particulars | Alfa | Beta | Gama |
|---|---|---|---|---|---|---|---|
| To Beta’s Capital A/c | 30,000 | – | 40,000 | By Balance b/d | 3,00,000 | 2,00,000 | 2,00,000 |
| To Bank A/c | – | 3,24,000 | – | By Revaluation A/c | 40,000 | 24,000 | 16,000 |
| To Balance c/d | 3,60,000 | – | 1,96,000 | By General Reserve A/c | 50,000 | 30,000 | 20,000 |
| By Alfa’s Capital A/c | – | 30,000 | – | ||||
| By Gama’s Capital A/c | – | 40,000 | – | ||||
| Total | 3,90,000 | 3,24,000 | 2,36,000 | Total | 3,90,000 | 3,24,000 | 2,36,000 |
BALANCE SHEET as at 1st April, 2025 (after Beta’s Retirement)
| Liabilities | ₹ | Assets | ₹ |
|---|---|---|---|
| Alfa’s Capital | 3,60,000 | Building | 3,00,000 |
| Gama’s Capital | 1,96,000 | Machinery | 1,50,000 |
| Sundry Creditors | 1,00,000 | Debtors | 1,00,000 |
| Stock | 60,000 | ||
| Cash at Bank | 46,000 | ||
| Total | 6,56,000 | Total | 6,56,000 |
Note: Cash at Bank = ₹1,00,000 (opening) + ₹2,70,000 (sale of investments) – ₹3,24,000 (paid to Beta) = ₹46,000.
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.31 - Retirement of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Retirement of a Partner.
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