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X and Y were… (Class 12 Accountancy SQP 2026-27, Q25A)

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AccountancyCBSE Class 12 · Sample paper, session 2026-27 · 6 marks · Long answer

CBSE Class 12 Accountancy sample paper 2026-27: question 25(A)

From the official CBSE sample question paper for 2026-27, section A, question 25(A), for 6 marks. Try it first; the hints and our step-by-step solution are below.

Q25(A) · 6 marks · Long answerReconstitution of a Partnership Firm – Admission of a Partner

X and Y were partners sharing profits in the ratio of 1: 2. Their Balance Sheet as at 31st March 2026 was as follows:

Liabilities₹Assets₹
Creditors30,000Cash20,000
Outstanding Expenses4,000Debtors40,000
Capitals: X 1,50,000Less: Prov. for doubtful debts500 → 39,500
Y 3,00,0004,50,000Stock1,20,000
General Reserve6,000Furniture30,000
Machinery2,72,500
Patents5,000
Profit and Loss A/c3,000
4,90,0004,90,000

They agreed to admit Z for 1/4th share on 1st April 2026 on the following terms:
i. Goodwill of the firm was valued at ₹60,000 and Z was to bring in a new and updated machinery costing ₹ 5,000 as a part payment against his share of premium for goodwill and the furniture for the balance of his share of goodwill premium.
ii. ₹ 10,000 were receivable from a debtor who was declared insolvent, only 50% of the amount could be recovered in cash by selling his assets.
iii. Provision for doubtful debts to be raised to 10% of the value of revised debtors.
iv. Patents were valueless.
v. Stock was found to be overvalued by 20%.
vi. ₹ 3,500 be provided for an unforeseen liability.
vii. Z to bring in capital equal to 1/4th of the combined capital of X and Y after all adjustments.
Pass required journal entries on the admission of Z and also prepare Balance Sheet of the reconstituted firm.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

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

Hint 1

Goodwill brought in kind is debited to the assets brought.

Hint 2

Bad debts are first met from the existing provision.

Hint 3

Z's capital is 1/4 of X and Y's adjusted capitals, as the question says.

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. Goodwill. Z's share = 1/4 × ₹ 60,000 = ₹ 15,000, brought as machinery ₹ 5,000 and furniture ₹ 10,000, and shared by X and Y in their sacrificing (old) ratio 1 : 2.

    ParticularsDr. (₹)Cr. (₹)
    Machinery A/c Dr.5,000
    Furniture A/c Dr.10,000
    To Premium for Goodwill A/c15,000
    (Being machinery and furniture brought by Z for his share of goodwill)
    Premium for Goodwill A/c Dr.15,000
    To X's Capital A/c5,000
    To Y's Capital A/c10,000
    (Being premium for goodwill shared in sacrificing ratio)
    1 mark

  2. Insolvent debtor (₹ 10,000; 50% recovered) and use of the old provision.

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.5,000
    Bad Debts A/c Dr.5,000
    To Debtors A/c10,000
    (Being 50% recovered from an insolvent debtor)
    Provision for Doubtful Debts A/c Dr.500
    Revaluation A/c Dr.4,500
    To Bad Debts A/c5,000
    (Being bad debts met from provision and the rest charged to revaluation)
    1 mark

  3. Revaluation. New provision 10% of ₹ 30,000 = ₹ 3,000; patents ₹ 5,000 written off; stock overvalued by 20%: true value ₹ 1,20,000 × 100/120 = ₹ 1,00,000 (fall ₹ 20,000); unforeseen liability ₹ 3,500. Total loss = 4,500 + 31,500 = ₹ 36,000, shared 1 : 2.

    ParticularsDr. (₹)Cr. (₹)
    Revaluation A/c Dr.31,500
    To Provision for Doubtful Debts A/c3,000
    To Patents A/c5,000
    To Stock A/c20,000
    To Unforeseen Liability A/c3,500
    (Being decrease in assets and new liability recorded)
    X's Capital A/c Dr.12,000
    Y's Capital A/c Dr.24,000
    To Revaluation A/c36,000
    (Being revaluation loss shared 1 : 2)
    1 mark

  4. Reserve, accumulated loss and Z's capital. X = 1,50,000 + 5,000 + 2,000 − 12,000 − 1,000 = ₹ 1,44,000; Y = 3,00,000 + 10,000 + 4,000 − 24,000 − 2,000 = ₹ 2,88,000; Z brings 1/4 × ₹ 4,32,000 = ₹ 1,08,000.

    ParticularsDr. (₹)Cr. (₹)
    General Reserve A/c Dr.6,000
    To X's Capital A/c2,000
    To Y's Capital A/c4,000
    (Being general reserve distributed)
    X's Capital A/c Dr.1,000
    Y's Capital A/c Dr.2,000
    To Profit and Loss A/c3,000
    (Being debit balance of profit and loss written off)
    Bank A/c Dr.1,08,000
    To Z's Capital A/c1,08,000
    (Being capital brought in by Z)
    1 mark

  5. Balance Sheet of X, Y and Z as at 1st April, 2026. Cash = 20,000 + 5,000 + 1,08,000 = ₹ 1,33,000.

    Liabilities₹Assets₹
    Creditors30,000Cash1,33,000
    Outstanding Expenses4,000Debtors 30,000 less provision 3,00027,000
    Unforeseen Liability3,500Stock1,00,000
    Capital: X1,44,000Furniture40,000
    Capital: Y2,88,000Machinery2,77,500
    Capital: Z1,08,000
    5,77,5005,77,500
    2 marks

Answer: Revaluation loss ₹ 36,000 (X ₹ 12,000, Y ₹ 24,000); capitals X ₹ 1,44,000, Y ₹ 2,88,000, Z ₹ 1,08,000; Balance Sheet total ₹ 5,77,500

Where the marks are

  • Goodwill brought in kind and distributed (1 mark)
  • Insolvent debtor entries (1 mark)
  • Revaluation entries (1 mark)
  • Reserve, P&L and Z's capital (1 mark)
  • Balance Sheet (2 marks)

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 2026-27: 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.