CBSE Class 12 Accountancy sample paper 2026-27: question 25(B)
From the official CBSE sample question paper for 2026-27, section A, question 25(B), for 6 marks. Try it first; the hints and our step-by-step solution are below.
Q25(B) · 6 marks · Long answerReconstitution of a Partnership Firm – Retirement/Death of a Partner
A, B and C were partners in a firm sharing profits in 2:2:1 ratio. On 31.3.2026, C retires from the firm. On the date of C's retirement, the Balance Sheet of the firm was as follows:
Balance Sheet of A, B and C as at 31.3.2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 54,000 | Bank | 45,000 |
| General Reserve | 10,000 | Debtor 12,000 | |
| Outstanding Rent | 4,400 | Less: Provision for doubtful debts 800 | 11,200 |
| Provision for Legal Claim | 12,000 | Stock | 18,000 |
| Capitals: | Furniture | 8,200 | |
| A 92,000 | Premises | 1,80,000 | |
| B 60,000 | Goodwill | 10,000 | |
| C 40,000 | 1,92,000 | ||
| 2,72,400 | 2,72,400 |
On C's retirement the goodwill of the firm was valued at ₹ 45,000.
After retirement the accountants of the firm worked out the following balance sheet, but they misplaced the papers on which Revaluation A/c and Partners' Capital were worked out.
Balance Sheet of A and B (After C's retirement) as at 31.3.2026
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Creditors | 54,000 | Bank | 34,600 |
| General Reserve | 5,000 | Debtor 12,000 | |
| Outstanding Rent | 4,400 | Less: Provision for doubtful debts 600 | 11,400 |
| Provision for Legal Claim | 14,400 | Stock | 16,200 |
| C's Loan | 40,000 | Furniture | 10,200 |
| Capitals: | Premises | 1,89,000 | |
| A 87,800 | |||
| B 55,800 | 1,43,600 | ||
| 2,61,400 | 2,61,400 |
On the basis of above information, you are required to help the accountants of the firm in preparing Revaluation A/c, and Partners Capital Accounts 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
Compare each item in the two balance sheets to rebuild the Revaluation Account.
Hint 2
Half the general reserve stays in the books: C must still get his share of it.
Hint 3
The fall in the bank balance is what C was paid in cash.
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.
- 2 marks
Revaluation figures from the two balance sheets: provision 800 → 600 (gain ₹ 200); legal claim 12,000 → 14,400 (loss ₹ 2,400); stock 18,000 → 16,200 (loss ₹ 1,800); furniture 8,200 → 10,200 (gain ₹ 2,000); premises 1,80,000 → 1,89,000 (gain ₹ 9,000).
Particulars ₹ Particulars ₹ To Provision for Legal Claim 2,400 By Provision for Doubtful Debts 200 To Stock 1,800 By Furniture 2,000 To Gain: A's Capital 2,800 By Premises 9,000 To Gain: B's Capital 2,800 To Gain: C's Capital 1,400 11,200 11,200 - 1 mark
Workings. Old goodwill ₹ 10,000 written off 2 : 2 : 1. Only ₹ 5,000 of the general reserve is distributed (2 : 2 : 1) and ₹ 5,000 is kept, so A and B pay C his 1/5 share of the kept reserve (₹ 1,000) in their gaining ratio 1 : 1. C's goodwill share = 45,000 × 1/5 = ₹ 9,000, paid ₹ 4,500 each. C's total = ₹ 50,400: ₹ 40,000 to loan (as in the new balance sheet) and ₹ 10,400 paid by bank (45,000 − 34,600).
- 3 marks
Partners' Capital Accounts
Particulars A (₹) B (₹) C (₹) Particulars A (₹) B (₹) C (₹) To Goodwill A/c 4,000 4,000 2,000 By Balance b/d 92,000 60,000 40,000 To C's Capital A/c (reserve kept) 500 500 By General Reserve A/c 2,000 2,000 1,000 To C's Capital A/c (goodwill) 4,500 4,500 By Revaluation A/c 2,800 2,800 1,400 To Bank A/c 10,400 By A's Capital A/c (goodwill) 4,500 To C's Loan A/c 40,000 By B's Capital A/c (goodwill) 4,500 To Balance c/d 87,800 55,800 By A's Capital A/c (reserve) 500 By B's Capital A/c (reserve) 500 96,800 64,800 52,400 96,800 64,800 52,400
Answer: Revaluation gain ₹ 7,000 (A ₹ 2,800, B ₹ 2,800, C ₹ 1,400); C paid ₹ 10,400 and ₹ 40,000 to loan; closing capitals A ₹ 87,800, B ₹ 55,800
Where the marks are
- Revaluation Account (2 marks)
- Workings for goodwill, reserve and C's settlement (1 mark)
- Partners' capital accounts (3 marks)
Revise the chapter
- Chapter: Reconstitution of a Partnership Firm – Retirement/Death of a Partner (notes, formulas, where marks are lost and every past question)
- Topic: Gaining Ratio
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