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Alok, Deepak and… (Class 12 Accountancy SQP 2025-26, Q24)

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AccountancyCBSE Class 12 · Sample paper, session 2025-26 · 6 marks · Long answer

CBSE Class 12 Accountancy sample paper 2025-26: question 24

From the official CBSE sample question paper for 2025-26, section A, question 24, for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q24 · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner

Alok, Deepak and Manish were partners sharing Profit &Loss in the ratio 5:3:2. Deepak retired on March 31, 2025. On this date his dues after all adjustments related to Revaluation Gain/Loss, Accumulated Profits/Losses and Goodwill treatment came out to be ₹ 6,40,000. He was paid ₹ 40,000 through Furniture on retirement and it was agreed to pay balance in three equal annual instalments together with interest as per the rate permissible by act, in the absence of any agreement. First instalment being paid on March 31, 2026. You are required to pass entry for immediate payment to Deepak on retirement and prepare Deepak’s Loan Account till it is finally closed.

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

What rate of interest does the Partnership Act allow to a retiring partner when nothing is agreed?

Hint 2

Instalments are equal in principal; interest falls as the balance falls.

Hint 3

Close the account with the third payment.

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. Settlement on retirement (31st March, 2025): ₹ 40,000 by furniture, balance ₹ 6,00,000 to his loan.

    ParticularsDr. (₹)Cr. (₹)
    Deepak's Capital A/c Dr.6,40,000
    To Furniture A/c40,000
    To Deepak's Loan A/c6,00,000
    (Being Deepak's dues settled by furniture and transfer to loan)
    1 mark

  2. With no agreement, Section 37 of the Indian Partnership Act allows interest at 6% p.a. on the unpaid amount. Each instalment of principal = ₹ 6,00,000 / 3 = ₹ 2,00,000. Interest: year 1 on ₹ 6,00,000 = ₹ 36,000; year 2 on ₹ 4,00,000 = ₹ 24,000; year 3 on ₹ 2,00,000 = ₹ 12,000.

    1 mark

  3. Deepak's Loan A/c

    Particulars₹Particulars₹
    31.03.2026 To Bank A/c2,36,00031.03.2025 By Deepak's Capital A/c6,00,000
    31.03.2026 To Balance c/d4,00,00031.03.2026 By Interest A/c36,000
    6,36,0006,36,000
    31.03.2027 To Bank A/c2,24,00001.04.2026 By Balance b/d4,00,000
    31.03.2027 To Balance c/d2,00,00031.03.2027 By Interest A/c24,000
    4,24,0004,24,000
    31.03.2028 To Bank A/c2,12,00001.04.2027 By Balance b/d2,00,000
    31.03.2028 By Interest A/c12,000
    2,12,0002,12,000
    4 marks

Answer: Deepak's Capital Dr. ₹ 6,40,000 to Furniture ₹ 40,000 and Deepak's Loan ₹ 6,00,000; instalments paid ₹ 2,36,000 (2026), ₹ 2,24,000 (2027) and ₹ 2,12,000 (2028), interest at 6% ₹ 36,000, ₹ 24,000, ₹ 12,000

Where the marks are

  • Entry for settlement (1 mark)
  • Interest at 6% under the Act and equal instalments of ₹ 2,00,000 (1 mark)
  • Loan account for three years, closed in 2028 (4 marks)

Revise the chapter

Practise this chapterBoard-style questions from Reconstitution of a Partnership Firm – Retirement/Death 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.