CBSE Class 12 Accountancy 2026: question 24
Set in the CBSE Class 12 board exam of 2026, paper 67/5/1, 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 – Admission of a Partner
Asha and Indra were partners in a firm sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet on 31st March, 2025 was as following :
Balance Sheet of Asha and Indra as at 31st March, 2025
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals : | Plant and Machinery | 4,05,000 | |
| Asha 4,00,000 | Furniture | 1,20,000 | |
| Indra 3,00,000 | 7,00,000 | Debtors 80,000 | |
| General Reserve | 50,000 | Less : Provision for doubtful debts 4,000 | 76,000 |
| Creditors | 20,000 | Stock | 1,54,000 |
| Cash at bank | 15,000 | ||
| 7,70,000 | 7,70,000 |
On 1st April, 2025, Suraj was admitted for 1/4th share in the profits of the firm on the following terms :
(i) Suraj will bring capital proportionate to his share in the profits of the firm.
(ii) Goodwill of the firm was valued at ₹ 1,00,000 and Suraj will bring his share of goodwill premium in cash.
(iii) Furniture was taken over by Asha at ₹ 1,00,000.
(iv) A liability of ₹ 5,000 included in creditors was not likely to arise.
(v) Plant and Machinery was revalued at ₹ 4,35,000.
Prepare Revaluation Account and Partners' capital accounts on Suraj's admission. Show the calculation of proportionate capital clearly.
Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/5/1.
Hints
Open one hint at a time and try again before the next.
Hint 1
Furniture taken over by Asha below book value is a revaluation loss and a debit to her capital.
Hint 2
A liability that will not arise is a revaluation gain.
Hint 3
Suraj's capital is based on the adjusted capitals of the old partners.
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 Account
Particulars ₹ Particulars ₹ To Furniture (1,20,000 − 1,00,000) 20,000 By Creditors 5,000 To Gain transferred to: By Plant and Machinery (4,35,000 − 4,05,000) 30,000 Asha's Capital A/c 9,000 Indra's Capital A/c 6,000 35,000 35,000 - ½ mark
Goodwill. Suraj's share = 1,00,000 × 1/4 = ₹ 25,000, brought in cash and credited to Asha and Indra in their sacrificing ratio 3 : 2 (₹ 15,000 and ₹ 10,000). General Reserve ₹ 50,000 goes to them in 3 : 2.
- 2½ marks
Partners' Capital Accounts
Particulars Asha (₹) Indra (₹) Suraj (₹) Particulars Asha (₹) Indra (₹) Suraj (₹) To Furniture A/c 1,00,000 By Balance b/d 4,00,000 3,00,000 To Balance c/d 3,54,000 3,36,000 2,30,000 By General Reserve 30,000 20,000 By Premium for Goodwill 15,000 10,000 By Revaluation A/c 9,000 6,000 By Bank A/c 2,30,000 4,54,000 3,36,000 2,30,000 4,54,000 3,36,000 2,30,000 - 1 mark
Proportionate capital. Adjusted capitals of Asha and Indra = 3,54,000 + 3,36,000 = ₹ 6,90,000 for 3/4 share. Total capital = 6,90,000 × 4/3 = ₹ 9,20,000; Suraj's capital = 9,20,000 × 1/4 = ₹ 2,30,000.
Answer: Revaluation gain ₹ 15,000 (Asha ₹ 9,000, Indra ₹ 6,000); capitals Asha ₹ 3,54,000, Indra ₹ 3,36,000; Suraj brings ₹ 2,30,000 capital and ₹ 25,000 goodwill premium
Where the marks are
- Revaluation Account (2 marks)
- Goodwill premium in sacrificing ratio (½ mark)
- Capital accounts (2½ marks)
- Proportionate capital ₹ 2,30,000 (1 mark)
Revise the chapter
- Chapter: Reconstitution of a Partnership Firm – Admission of a Partner (notes, formulas, where marks are lost and every past question)
- Topic: Treatment of Goodwill on Admission
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