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Ankur and Vikram… (Class 12 Accountancy SQP 2025-26, Q20)

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AccountancyCBSE Class 12 · Sample paper, session 2025-26 · 3 marks · Short answer

CBSE Class 12 Accountancy sample paper 2025-26: question 20

From the official CBSE sample question paper for 2025-26, section A, question 20, for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q20 · 3 marks · Short answerReconstitution of a Partnership Firm – Admission of a Partner

Ankur and Vikram were partners sharing Profits &Losses in the ratio 3:2. They decided to share future Profits & Losses equally. On the date of reconstitution there was Investment Fluctuation Reserve of ₹ 4,00,000 in the books of accounts. Pass entries in the following cases
A. Value of Investment reduced by ₹ 2,50,000.
B. Value of Investment increased by ₹ 5,00,000.
C. There was no change in value of investments.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

Open one hint at a time and try again before the next.

Hint 1

The reserve first absorbs any fall in the value of investments.

Hint 2

Any reserve left over belongs to the old partners in the old ratio.

Hint 3

A rise in value is a revaluation gain, shared in the old ratio.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Case A (fall ₹ 2,50,000): the reserve meets the fall; the remaining ₹ 1,50,000 goes to the old partners in 3 : 2.

    ParticularsDr. (₹)Cr. (₹)
    Investment Fluctuation Reserve A/c Dr.4,00,000
    To Investment A/c2,50,000
    To Ankur's Capital A/c90,000
    To Vikram's Capital A/c60,000
    (Being fall in investments met from the reserve and balance credited to partners)
    1 mark

  2. Case B (rise ₹ 5,00,000): the whole reserve goes to partners in 3 : 2, and the rise in value is a revaluation gain, also shared 3 : 2.

    ParticularsDr. (₹)Cr. (₹)
    Investment Fluctuation Reserve A/c Dr.4,00,000
    To Ankur's Capital A/c2,40,000
    To Vikram's Capital A/c1,60,000
    (Being reserve credited to partners in old ratio)
    Investment A/c Dr.5,00,000
    To Revaluation A/c5,00,000
    (Being increase in value of investments)
    Revaluation A/c Dr.5,00,000
    To Ankur's Capital A/c3,00,000
    To Vikram's Capital A/c2,00,000
    (Being revaluation gain credited to partners in old ratio)
    1½ marks

  3. Case C (no change): the whole reserve is free and goes to partners in 3 : 2.

    ParticularsDr. (₹)Cr. (₹)
    Investment Fluctuation Reserve A/c Dr.4,00,000
    To Ankur's Capital A/c2,40,000
    To Vikram's Capital A/c1,60,000
    (Being reserve credited to partners in old ratio)
    ½ mark

Answer: A: IFR ₹ 4,00,000 to Investment ₹ 2,50,000, Ankur ₹ 90,000, Vikram ₹ 60,000. B: IFR to Ankur ₹ 2,40,000 and Vikram ₹ 1,60,000; Investment ₹ 5,00,000 to Revaluation; Revaluation gain to Ankur ₹ 3,00,000 and Vikram ₹ 2,00,000. C: IFR to Ankur ₹ 2,40,000 and Vikram ₹ 1,60,000

Where the marks are

  • Case A entry (1 mark)
  • Case B entries (1½ marks)
  • Case C entry (½ mark)

Revise the chapter

Practise this chapterBoard-style questions from Reconstitution of a Partnership Firm – Admission of a Partner, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2025-26: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.