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Sanjay and Vijay were… (Class 12 Accountancy 2026, Q25a)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 6 marks · Long answer

CBSE Class 12 Accountancy 2026: question 25(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, 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

Sanjay and Vijay were partners in a firm sharing profits and losses in the ratio of 4 : 3. On 1st April, 2025 they admitted Babul as a new partner for th share in the profits of the firm. On Babul's admission, the following was agreed upon :

(i) The new profit sharing ratio of Sanjay, Vijay and Babul will be 3 : 3 : 4.

(ii) The goodwill of the firm will be valued at four years purchase of the average profits of the last three years. The profits of the previous three years were :

YearProfit (₹)
2022-2316,500
2023-2417,500
2024-2518,500

(iii) Babul will bring his share of goodwill premium in cash, half of which will be withdrawn by Sanjay and Vijay.

(iv) On Babul's admission, revaluation of assets and reassessment of liabilities resulted in a loss of ₹ 70,000.

(v) At the time of Babul's admission, the firm had a General Reserve of ₹ 28,000.

(vi) After making necessary adjustments relating to goodwill, loss on revaluation and general reserve, the capital accounts of Sanjay and Vijay showed balances of ₹ 3,50,000 and ₹ 2,50,000 respectively. Babul brought proportionate capital for his 2/5th share in the profits of the firm.

Showing your workings clearly pass necessary journal entries for the above transactions in the books of the firm on Babul's admission.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

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

Hint 1

A new ratio is given, so find each old partner's sacrifice separately.

Hint 2

Revaluation and reserves go in the old ratio 4 : 3.

Hint 3

Babul's 2/5 capital is based on the old partners' 3/5.

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. Workings. Average profit = (16,500 + 17,500 + 18,500)/3 = ₹ 17,500; goodwill = 4 × 17,500 = ₹ 70,000; Babul's share = 2/5 × 70,000 = ₹ 28,000. Sacrifice: Sanjay 4/7 − 3/10 = 19/70, Vijay 3/7 − 3/10 = 9/70, ratio 19 : 9. Babul's capital = (3,50,000 + 2,50,000) × 5/3 × 2/5 = ₹ 4,00,000.

    1 mark
  2. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.28,000
    To Premium for Goodwill A/c28,000
    (Being goodwill premium brought in by Babul)
    ½ mark
  3. ParticularsDr. (₹)Cr. (₹)
    Premium for Goodwill A/c Dr.28,000
    To Sanjay's Capital A/c19,000
    To Vijay's Capital A/c9,000
    (Being premium shared in sacrificing ratio 19 : 9)
    1 mark
  4. ParticularsDr. (₹)Cr. (₹)
    Sanjay's Capital A/c Dr.9,500
    Vijay's Capital A/c Dr.4,500
    To Bank A/c14,000
    (Being half the premium withdrawn)
    1 mark
  5. ParticularsDr. (₹)Cr. (₹)
    Sanjay's Capital A/c Dr.40,000
    Vijay's Capital A/c Dr.30,000
    To Revaluation A/c70,000
    (Being revaluation loss shared in old ratio 4 : 3)
    General Reserve A/c Dr.28,000
    To Sanjay's Capital A/c16,000
    To Vijay's Capital A/c12,000
    (Being general reserve shared in old ratio)
    2 marks
  6. ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.4,00,000
    To Babul's Capital A/c4,00,000
    (Being proportionate capital brought in by Babul)
    ½ mark

Answer: Goodwill ₹ 70,000; premium ₹ 28,000 to Sanjay ₹ 19,000 and Vijay ₹ 9,000, half withdrawn (₹ 9,500 and ₹ 4,500); revaluation loss ₹ 40,000 and ₹ 30,000; reserve ₹ 16,000 and ₹ 12,000; Babul's capital ₹ 4,00,000

Where the marks are

  • Workings: goodwill, sacrificing ratio 19 : 9, proportionate capital (1 mark)
  • Premium brought (½ mark)
  • Premium distributed (1 mark)
  • Withdrawal (1 mark)
  • Revaluation loss and reserve (2 marks)
  • Capital brought (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 paper2026 board paper, set 67/1/1: 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.