Q31 to 40 Retirement of a Partner TS Grewal Solutions 2025-26

In this article, I have provided Q31 to 40 Retirement of a Partner TS Grewal Solutions 2025-26. You can find the solutions of specifically Q31 to Q40 here. If you have any doubts regarding any of these questions, you can ask in the comments. I will try to resolve your doubts as soon as possible.

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Question 31: (Alfa, Beta, and Gama)

Alfa, Beta and Gama are in partnership sharing profits in the ratio of 5:3:2.Their Balance Sheet on 1st April, 2025, the day Beta decided to retire from firm, was as follows:

Liabilities	₹	Assets	₹
Alfa’s Capital	3,00,000	Building	2,50,000
Beta’s Capital	2,00,000	Machinery	1,50,000
Gama’s Capital	2,00,000	Investments	2.50,000
General Reserve	1,00,000	Debtors	1,00,000
Sundry Creditors	1,00,000	Stock	50,000
		Cash at Bank	1,00,000
	9,00,000		9,00,000

The terms of retirement were:

(i) Beta takes goodwill from Alfa for ₹ 30,000 and from Gama for ₹ 40,000 for foregoing his share of profits.

(ii) Stock to be appreciated by 20% and building by 50,000.

(iii) Investments were sold for 2,70,000.

(iv) Beta is paid by bank draft.

Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.

Answer:

Revaluation A/c
Particulars	₹	Particulars	₹
Gain		Building	50,000
Capital A/cs:		Investments	20,000
Alfa’s 40,000		Stock	10,000
Beta’s 24,000
Gama’s 16,000	80,000
	80,000		80,000

Capital A/c
Particulars	Alfa	Beta	Gama	Particulars	Alfa	Beta	Gama
To Beta’s Capital A/c	30,000	–	40,000	By Balance B/d	3,00,000	2,00,000	2,00,000
To Bank A/c	–	3,24,000	–	By Revaluation A/c	40,000	24,000	16,000
To Balance C/d	3,60,000	–	1,96,000	By General Reserve	50,000	30,000	20,000
				By Alfa’s Capital A/c	–	30,000	–
				By Gama’s Capital A/c	–	40,000	–
	3,90,000	3,24,000	2,36,000		3,90,000	3,24,000	2,36,000

Balance Sheet
Liabilities	₹	Assets	₹
Alfa’s Capital	3,60,000	Building	3,00,000
Beta’s Capital	1,96,000	Machinery	1,50,000
Sundry Creditors	1,00,000	Debtors	1,00,000
		Stock	60,000
		Cash at Bank	46,000

	9,00,000		9,00,000

Question 32: (Kanika, Disha, and Kabir)

Kanika, Disha and Kabir were partners sharing profits in the ratio of 2 : 1 : 1. On 31st March, 2025, their Balance Sheet was as under:

Liabilities	(₹)	Assets	(₹)
Trade creditors	53,000	Bank	60,000
Employees’ Provident Fund	47,000	Debtors	60,000
Kanika’s Capital	2,00,000	Stock	1,00,000
Disha’s Capital	1,00,000	Fixed assets	2,40,000
Kabir’s Capital	80,000	Profit and Loss A/c	20,000

	4,80,000		4,80,000

Kanika retired on 1st April, 2025. For this purpose, the following adjustments were agreed upon:
(a) Goodwill of the firm was valued at 2 years’ purchase of average profits of three completed years preceding the date of retirement. The profits for the year:
2023 were ₹ 1,00,000 and for 2024 were ₹ 1,30,000.
(b) Fixed Assets were to be increased to ₹ 3,00,000.
(c) Stock was to be valued at 120%.
(d) The amount payable to Kanika was transferred to her Loan Account.
Prepare Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the reconstituted firm.

Answer:

Revaluation Account
Dr.	Cr.
Particulars			₹	Particulars	₹
Revaluation Profit				Fixed Assets	60,000
Kanika’s Capital		40,000		Stock	20,000
Disha’s Capital		20,000
Kabir’s Capital		20,000	80,000
			80,000		80,000

Partners’ Capital Account
Dr.					Cr.
Particulars	Kanika	Disha	Kabir	Particulars		Kanika	Disha	Kabir
Profit & Loss A/c	10,000	5,000	5,000	Balance b/d		2,00,000	1,00,000	80,000
Kanika’s Capital A/c		35,000	35,000	Disha’s Capital A/c		35,000
Kanika’s Loan A/c	3,00,000			Kabir’s Capital A/c		35,000
Balance c/d		80,000	60,000	Revaluation		40,000	20,000	20,000

	3,10,000	1,20,000	1,00,000			3,10,000	1,20,000	1,00,000

Balance Sheetas on March 31, 2025
Liabilities		(₹)	Assets	(₹)
Employees’ Provident Fund		47,000	Bank	60,000
Trade Creditors		53,000	Sundry Debtors	60,000
Kanika’s Loan A/c		3,00,000	Stock	1,20,000
Capitals			Fixed Assets	3,00,000
Disha	80,000
Kabir	60,000	1,40,000
		5,40,000		5,40,000

Working Notes:
WN1: Calculation of Goodwill

Goodwill=Average Profits×Number of Years’ Purchase

Average Profits=Total ProfitsNumber of Years=1,00,000+1,30,000−20,000/3=2,10,000/3=₹ 70,000

Goodwill=70,000×2=₹ 1,40,000

Kanika’s share=1,40,000×2/4=70,000 (to be borne by gaining partners in gaining ratio)

Note: Since no information is given about the share of gain, it is assumed that the old partners are gaining in their old profit sharing ratio.

Question 33: (N, S, and G)

N, S and G were partners in a firm sharing profits and losses in the ratio of 2 : 3 : 5. On 31st March, 2016 their Balance Sheet was as under:

Liabilities		(₹)	Assets		(₹)
Creditors		1,65,000	Cash		1,20,000
General Reserve		90,000	Debtors	1,35,000
Capitals:			Less: Provision	15,000	1,20,000
N	2,25,000		Stock		1,50,000
S	3,75,000		Machinery		4,50,000
G	4,50,000	10,50,000	Patents		90,000
			Building		3,00,000
			Profit and Loss Account		75,000
		13,05,000			13,05,000

G retired on the above date and it was agreed that:
(a) Debtors of ₹ 6,000 will be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts will be maintained.
(b) Patents will be completely written off and stock, machinery and building will be depreciated by 5%.
(c) An unrecorded creditor of ₹ 30,000 will be taken into account.
(d) N and S will share the future profits in 2 : 3 ratio.
(e) Goodwill of the firm on G’s retirement was valued at ₹ 90,000.
Pass necessary Journal entries for the above transactions in the books of the firm on G’s retirement.

Answer:

Journal
Date	Particulars		L.F.	Debit(₹)	Credit(₹)
	General Reserve A/c	Dr.		90,000
	To N’s Capital A/c				18,000
	To S’s Capital A/c				27,000
	To G’s Capital A/c				45,000
	(Balance in reserve distributed among all partners in old ratio)

	N’s Capital A/c	Dr.		15,000
	S’s Capital A/c	Dr.		22,500
	G’s Capital A/c	Dr.		37,500
	To Profit & Loss A/c				75,000
	(Debit balance P&L A/c written off among all partners in old ratio)

	N’s Capital A/c	Dr.		18,000
	S’s Capital A/c	Dr.		27,000
	To G’s Capital A/c				45,000
	(Goodwill adjusted in gaining ratio)

	Revaluation A/c	Dr.		1,65,000
	To Patent A/c				90,000
	To Stock A/c				7,500
	To Machinery A/c				22,500
	To Building A/c				15,000
	To Creditors A/c				30,000
	(Decrease in assets and increase in liabilities debited to Revaluation A/c)

	Provision for Doubtful Debts A/c	Dr.		2,550
	To Revaluation A/c				2,550
	(Excess provision written back)

	N’s Capital A/c	Dr.		32,490
	S’s Capital A/c	Dr.		48,735
	G’s Capital A/c	Dr.		81,225
	To Revaluation A/c				1,62,450
	(Loss on revaluation debited to partners’ capital accounts in old ratio)

	G’s Capital A/c	Dr.		4,21,275
	To G’s Loan A/c				4,21,275
	(Amount due to G transferred to his loan A/c)

Working Notes:

WN1: Calculation of G’s Share of Goodwill

G’s share=Firm’s Goodwill×G’s Profit Share

G’s share=90,000×5/10=45,000 (to be borne by gaining partners in gaining ratio)

WN2: Calculation of Gaining Ratio
Gaining Ratio = New Ratio − Old Ratio
N’s gain=2/5−2/10=2/10

S’s gain=3/5−3/10=3/10Gaining Ratio=2:3

N’s share=45,000×2/5=18,000

S’s share=45,000×3/5=27,000

WN2: Calculation of Excess/Deficit Provision for Doubtful Debts

Required Provision @5%=1,35,000−6,000×5÷100=6,450

Existing Provision after writing bad-debts= 9,000

Excess Provision to be written back=2,550=9,000−6,450

WN3: Calculation of G’s Loan Balance
Amount due to G = Opening Capital + Credits – Debits

= 4,50,000 + (45,000 + 45,000) – (37,500 + 81,225)
= ₹ 4,21,275

Question 34: (Ashok, Bhaskar, and Chaman)

Ashok, Bhaskar and Chaman are partners in a firm, sharing profits and losses as Ashok 1/3, Bhaskar 1/2, and Chaman 1/6 respectively. The Balance Sheet of the firm as at 31^st March, 2024 was

Liabilities		₹	Assets		₹
Capital A/cs:			Building		5,00,000
Ashok	3,00,000		Plant and Machinery		4,00,000
Bhaskar	4,00,000		Furniture		1,00,000
Chaman	2,50,000	9,50,000	Stock		2,50,000
General Reserve		2,20,000	Debtors	1,80,000
Sundry Creditors		2,50,000	Less: Provision for Doubtful Debts	5,000	1,75,000
Loan Payable		1,50,000	Cash in Hand		85,000
			Advertisement Suspense Account		60,000
		15,70,000			15,70,000

Chaman retired on 1st April, 2025 subject to the following adjustments:

(a) Goodwill of the firm be valued at ₹2,40,000. Chaman’s share of goodwill be adjusted into the Capital Accounts of Ashok and Bhaskar who will share future profits in the ratio of 3:2.

(6) Plant and Machinery to be reduced by 10% and Furniture by 5%.

(d) Provision for Doubtful Debts to be raised to ₹20,000.

Prepare Revaluation Account, Capital Account of Chaman and the Balance Sheet of the firm after Chaman’s retirement.

Answer:

Profit and loss adjustment a/c
Dr.			Cr.
Particulars	₹	Particulars	₹
To Plan and machineryTo FurnitureTo Prov. for doubtful debtsTo capital a/c(profit transferred to)Ashok =27,500×2/6= 9,167Bhaskar=27,500×3/6=13,750Chaman =27,500×1/6=4,583	40,0005,00015,000 27,500	By stockBy factory building	37,50050,000
	87,500		87,500

Partners’ Capital Account
Dr.					Cr.
Particulars	Ashok	Bhaskar	Chaman	Particulars		Ashok	Bhaskar	Chaman
B’s Capital A/c	24,000			Balance b/d		3,00,000	4,00,000	2,50,000
C’s Capital A/c	40,000			A’s Capital A/c			24,000	40,000
Advertisement sus. a/cC’s loan a/c	20,000	30,000	10,000 3,21,250	Profit and loss adjustment a/cGeneral reserve a/c		9,167 73,333	13,750 1,10,000	4,583 36,667
Balance c/d	2,98,500	5,17,750

	3,82,500	5,47,750	3,31,250			3,82,500	5,47,750	3,31,250

	Balance Sheet
	as on April 01, 2025 (after C’s Retirement)
	Liabilities			Amount(₹)	Assets				Amount(₹)
	Sundry Creditors			2,50,000	Factory building				5,50,000
	Loan Payable			1,50,000	Plant and machinery				3,60,000
	C’s Loan			3,21,250	Furniture				95,000
					Stock				2,87,500
	Capital A/c				Debtors 1,80,000
	Ashok		2,98,500		Less;prov. 20,000				1,60,000
	Bhaskar		5,17,750	3,54,000	Cash				85,000
				15,37,500					15,37,500

Journal
Date		Particulars					L.F.	Debit(₹)		Credit(₹)
		Ashok’s Capital A/c				Dr.		64,000
		To Bhaskar’s Capital A/c								24,000
		To Chaman’s Capital A/c								40,000
		(Being goodwill adjusted for compensating bhaskar, Chaman)

		Profit and loss adjustment a/c				Dr.		60,000
		To Plant and machinery A/c								40,000
		To Furniture A/c								5,000
		To Prov. for doubtful debts A/c								15,000
		(Decrease in assets and increase in liabilities debited to Revaluation A/c)

		N’s Capital A/c				Dr.		18,000
		S’s Capital A/c				Dr.		27,000
		To G’s Capital A/c								45,000
		(Goodwill adjusted in gaining ratio)

		Stock A/c				Dr.		37,500
		Factory building A/c				Dr.		50,000
		To P&L adjustment A/c								87,500
		(Decrease in assets debited to Revaluation A/c)

Working notes;

Old ratio of Ashok :Bhaskar : chaman=1/3:1/2:1/6

=1/3×2/2:1/2×3/3=1/6

=2/6:3/6:1/6

=2:3:1

New ratio of Ashok and Bhaskar= 3:2

Gaining ratio= New ratio – old ratio

Ashok = 3/5-2/6=18-10/30=8/30

Bhaskar= 2/5-3/6=12-15/30= -3/30

Goodwill of firm= 2,40,000

Bhaskar will get =2,40,000×3/30=24,000

Chaman’s share of goodwill = 2,40,000×1/6=40,000

Ashok will give Bhaskarand, chaman 24,000, 40,000 respectively.

Question 35: (Chintan, Ayush, and Sudha)

Chintan, Ayush and Sudha were partners in a firm sharing profits and losses in the ratio of 5: 3:2. On 31st March, 2019, their Balance Sheet was as follows:

BALANCE SHEET OF CHINTAN, AYUSH AND SUDHA as at 31st March, 2019
Liabilities		₹	Assets		₹
Capitals:			Plant and Machinery		90,000
Chintan	90,000		Furniture		60,000
Ayush	60,000		Stock		30,000
Sudha	40,000	1,90,000	Debtors	60,000
Provident Fund		30,000	Less: Provision for Doubtful Debts	5,000	55,000
General Reserve		20,000	Cash at Bank		15,000
Creditors		10,000
		2,50,000			2,50,000

Chintan retired on the above date and it was agreed that:

(a) Debtors of ₹5,000 were to be written off as bad debts and a provision of 5% on debtors for bad and doubtful debts was to be created.

(b) Goodwill of the firm on Chintan’s retirement was valued at ₹1,00,000 and Chintan’s share of the same will be adjusted by debiting the Capital Accounts of Ayush and Sudha.

(d) Furniture was undervalued by ₹9,000.

(e) Liability for Workmen’s Compensation of ₹2,000 was to be created.

(f) Chintan was to be paid ₹20,000 by cheque and the balance was to be transferred to his loan account.

Pass the necessary Journal entries in the books of the firm on Chintan’s retirement.

(CBSE 2020 C)

Answer:

Date	Particulars		L.F.	Dr. (₹)	Cr. (₹)
	Stock A/cFurniture A/cProvision A/c To Revolution A/c(Being Decrease in the Value of Liabilities and increase in the value of Assets)	Dr. Dr. Dr.		6,000 9,000 2,250	17,250
	Revaluation A/cTo Bad debts A/c To Liabilities for Worker compensation A/c(Being Decrease in the Value of Assets and increase in the value of Liabilities)	Dr.		7,000	5,000 2,000
	Revaluation A/c To Chintan’s Capital A/c To Ayush’s Capital A/c To Sudha’s Capital A/c(being gain of revaluation Account transferred to Capital accounts)	Dr.		10,250	5,125 3,075 2,050
	General Reserve A/c To Chintan’s Capital A/c To Ayush’s Capital A/c To Sudha’s Capital A/c(being gain of General Reserves transferred to Capital accounts)	Dr.		20,000	10,000 6,000 4,000
	Ayush’s Capital A/cSudha’s Capital A/c To Chintan’s Capital A/c(Being Retiring Partner compensated)	Dr.Dr.		30,000 20,000	50,000
	Chintan’s Capital A/c To Bank A/c(Being Chintan was paid ₹20,000 through cheque)	Dr.		20,000	20,000
	Chintan’s Capital A/c To Chintan’s Loan A/c(Being balance of Capital transferred to His loan Account)	Dr.		1,35,125	1,35,125

Question 36: (A, B, and C)

A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 3. Their Balance Sheet as at 31st March, 2025 is:

Liabilities		(₹)	Assets		(₹)
Creditors		7,000	Land and Building		36,000
Bills Payable		3,000	Plant and Machinery		28,000
Reserves		20,000	Computer Printer		8,000
Capital A/cs:			Stock		20,000
A	32,000		Sundry Debtors	14,000
B	24,000		Less: Provision for Doubtful Debts	2,000	12,000
C	20,000	76,000	Bank		2,000

		1,06,000			1,06,000

On 1st April, 2025, B retired from the firm on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 14,000.
(b) Stock, Land and Building are to be appreciated by 10%.
(c) Plant and Machinery and Computer Printer are to be reduced by 10%.
(d) Sundry Debtors are considered to be good.
(e) There is a liability of ₹ 2,000 for the payment of outstanding salary to the employees of the firm. This liability was not provided in the Balance Sheet but the same is to be recorded now.
(f) Amount payable to B is to be transferred to his Loan Account.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of A and C after B’s retirement.

Answer:

Revaluation Account
Dr.				Cr.
Particulars		(₹)	Particulars	(₹)
Plant and Machinery (28,000 × 10%)		2,800	Stock (20,000 × 10%)	2,000
Electronic Typewriter (8,000 × 10%)		800	Land and Building (36,000 × 10%)	3,600
Outstanding Salary		2,000	Provision for Doubtful Debts	2,000
Profit transferred to:
A’s Capital A/c	800
B’s Capital A/c	600
C’s Capital A/c	600	2,000

		7,600		7,600

Partners’ Capital Accounts
Dr.							Cr.
Particulars	A	B	C	Particulars	A	B	C
B’s Capital A/c	2,400		1,800	Balance b/d	32,000	24,000	20,000
B’s Loan A/c		34,800		Reserves	8,000	6,000	6,000
Balance c/d	38,400		24,800	Revaluation A/c	800	600	600
				A’s Capital A/c		2,400
				C’s Capital A/c		1,800
	40,800	34,800	26,600		40,800	34,800	26,600

Balance Sheet
an on April 01, 2025 (after B’s Retirement)
Liabilities	(₹)	Assets	(₹)
Creditors	7,000	Land and Building(36,000 + 3,600)	39,600
Bills Payable	3,000	Plant and Machinery(28,000 – 2,800)	25,200
B’s Loan	34,800	Electronic Typewriter8000 – 800)	7,200
Capital A/c:		Stock (20,000 + 2,000)	22,000
A	38,400	Sundry Debtors	14,000
C	24,800	Bank	2000
Outstanding Salary	2,000
	1,10,000		1,10,000

Working Note:
Adjustment of Goodwill
Old Ratio (A, B and C) = 4 : 3 : 3
B retires from the firm.

Gaining Ratio = 4 : 3
Goodwill of the firm = ₹ 14,000
B’s Share of Goodwill = 14,000×3/10=42,000

This share of goodwill is to be distributed between A and C in their gaining ratio (i.e. 4 : 3).
A‘s share= 4,200×4/7=2,400

C‘s share= 4,200×3/7=1,800

Question 37: (X, Y, and Z)

X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Balance Sheet of the firm as at 31st March, 2025 was as follows:

Liabilities		(₹)	Assets		(₹)
Creditors		21,000	Cash at Bank		5,750
Workmen Compensation Reserve		12,000	Debtors	40,000
Investments Fluctuation Reserve		6,000	Less: Provision for Doubtful Debts	2,000	38,000
Capital A/cs:			Stock		30,000
X	68,000		Investment(Market Value ₹ 17,600)		15,000
Y	32,000		Patents		10,000
Z	21,000	1,21,000	Machinery		50,000
			Goodwill		6,000
			Advertisement Expenditure		5,250

		1,60,000			1,60,000

Z retired on 1st April, 2025 on the following terms:
(a) Goodwill of the firm is to be valued at ₹ 34,800.
(b) Value of Patents is to be reduced by 20% and that of machinery to 90%.
(c) Provision for doubtful debts is to be created @ 6% on debtors.
(d) Z took over the investment at market value.
(e) Liability for Workmen Compensation to the extent of ₹ 750 is to be created.
(f) A liability of ₹ 4,000 included in creditors is not to be paid.
(g) Amount due to Z to be paid as follows: ₹ 5,067 immediately, 50% of the balance within one year and the balance by a draft for 3 Months.
Give necessary Journal entries for the treatment of goodwill, prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.

Answer:

Journal
Date	Particulars		L.F.	Debit(₹)	Credit(₹)
2025
April 01	X’s Capital A/c	Dr.		3,000
	Y’s Capital A/c	Dr.		2,000
	Z’s Capital A/c	Dr.		1,000
	To Goodwill A/c				6,000
	(Existing goodwill written off)

April 01	X’s Capital A/c	Dr.		3,480
	Y’s Capital A/c	Dr.		2,320
	To Z’s Capital A/c				5,800
	(Z’s share of goodwill credited to him and gaining partners debited in gaining ratio)

Revaluation Account
Dr.					Cr.
Particulars	Amount(₹)	Particulars		Amount(₹)
Patents	2,000	Investments(17,600 – 15,000)		2,600
Machinery	5,000	Creditors		4,000
Prov. for Doubtful Debts	400	Loss on Revaluation transferred
		X’s Capital A/c	400
		Y’s Capital A/c	267
		Z’s Capital A/c	133	800

	7,400			7,400

Partners’ Capital Accounts
Dr.								Cr.
Particulars	X	Y	Z	Particulars	X	Y	Z
Goodwill A/c	3,000	2,000	1,000	Balance b/d	68,000	32,000	21,000
Revaluation A/c	400	267	133	X’s Capital A/c	–	–	3,480
Z’s Capital A/c	3,480	2,320	–	Y’s Capital A/c	–	–	2,320
Advertisement Expenditure A/c	2,625	1,750	875	Workmen Compensation Reserve A/c*	5,625	3,750	1,875
Investments A/c	–	–	17,600	Investment Fluctuation Reserve A/c*	3,000	2,000	1,000
Bank A/c	–	–	5,067
Z’s Loan A/c	–	–	2,500
Bills Payable A/c	–	–	2,500
Balance c/d	67,120	31,413	–
	76,625	37,750	29,625		76,625	37,750	29,625

Balance Sheet as on April 01, 2025 after Z’s retirement
Liabilities		Amount(₹)	Assets		Amount(₹)
Creditors		17,000	Cash at Bank (5,750 – 5,067)		683
Workmen Compensation Claim		750	Stock		30,000
Bills Payable		2,500	Patents		8,000
Capital A/c’s:			Debtors A/c	40,000
X	67,120		Less: Prov. for D/D	2,400	37,600
Y	31,413	98,533	Machinery		45,000
Z’s Loan		2,500
		1,21,283			1,21,283

Working Note:

Amount due to Z = (21,000+3,480+2,320+1,875+1,000) – (1,000+133+875+17,600) =10,067

Amount paid on Retirement immediately: ₹ 5,067

Amount paid within one year: 50% of 5,000 = ₹ 2,500

Amount payable by Bills of Exchange: ₹ 2,500 (balance 50%)

Question 38: (Ashok, Bhaskar, and Chaman)

Ashok, Bhaskar and Chaman were in partnership sharing profits and losses equally. ‘Bhaskar‘ retires from the firm. After adjustments, his Capital Account shows a credit balance of ₹ 3,00,000 as on 1st April, 2020. Balance due to Bhaskar‘ is to be paid in three equal annual instalments along with interest @ 10% p.a. Prepare Bhaskar‘s Loan Account until he is paid the amount due to him. The firm closes its books on 31st March every year.

Answer:

Dr.	Bhaskar’s Loan A/c						Cr.
Date		Particulars	(₹)	Date	Particulars	(₹)
2021				2020
March 31		To Bank A/c(1,00,000 + 30,000)	1,30,000	April 01	By Bhaskar‘s Capital A/c	3,00,000
March 31		To balance c/d	2,00,000	2021
				March 31	By Interest on Loan A/c	30,000
					(3,00,000 × 10/100)
			3,30,000			3,30,000
2022				2021
March 31		To Bank A/c (1,00,000 + 20,000)	1,20,000	April 01	By balance b/d	2,00,000
March 31		To balance c/d	1,00,000	2022
				March 31	By Interest on Loan A/c	20,000
					(2,00,000 × 10/100)
			2,20,000			2,20,000
2023				2022
March 31		To Bank A/c (1,00,000 + 10,000)	1,10,000	April 01	By balance b/d	1,00,000
				2023
				March 31	By Interest on Loan A/c	10,000
					(1,00,000 × 10/100)
			1,10,000			1,10,000

Working Notes: Amount payable per Installment = ₹ (3,00,000/3) = ₹ 1,00,000

Question 39: (Rakesh retired)

Rakesh retired from the firm. The amount due to him was determined at ₹ 90,000. It was decided to pay the due amount as follows:
On the date of retirement − ₹ 30,000
Balance in three yearly instalments − First two instalments being of ₹ 26,000, including interest; and Balance amount as last instalment.
Interest was payable @ 10% p.a. Prepare retiring Partners’ Loan Account.

Answer:

Dr.	Rakesh’s Loan A/c					Cr.
Date	Particulars	(₹)	Date	Particulars	(₹)
Year I	To Bank A/c (20,000 + 6,000)	26,000	Year I	By Y’s Capital A/c	60,000
	To balance c/d	40,000
				By Interest on Loan A/c	6,000
				(60,000 × 10/100)
		66,000			66,000

Year II	To Bank A/c (22,000 + 4,000)	26,000	Year II	By balance b/d	40,000
	To balance c/d	18,000
				By Interest on Loan A/c	4,000
				(40,000 × 10/100)
		44,000			44,000

Year III	To Bank A/c (18,000 + 1,800)	19,800	Year III	By balance b/d	18,000

				By Interest on Loan A/c	1,800
				(18,000 × 10/100)
		19,800			19,800

Question 40: (Ram, Manohar, and Joshi)

Ram, Manohar and Joshi were partners in a firm. Manohar retired and his claim including his capital and share of goodwill was ₹1,80,000. There was an unrecorded furniture estimated at ₹ 9,000, half of which was given for an unrecorded liability of ₹18,000 in settlement of claim of ₹9,000 and remaining half was taken by Manohar at a discount of 10% in part satisfaction of his claim. Balance of Manohar’s claim was discharged by bank draft. Pass necessary Journal entries to record the above transactions.

Answer:

Date	Particulars		L.F.	Dr. ₹	Cr. ₹
	B’s capital a/c	Dr.		4,050
	To Revaluation a/c				4,050
	(Being unrecorded furniture taken over by partner B)
	Revaluation a/c	Dr.		9,000
	To unrecorded liabilities a/c				9,000
	(Being remaining unrecorded Liabilities paid by partner)
	B’s capital a/c	Dr.		1,650
	To Revaluation a/c				1,650
	(Being loss on revaluation debited to B’s capital)
	B’s capital a/c	Dr.		1,74,300
	To Bank a/c				1,74,300
	(Being final amount paid to B’s capital on his retirement by bank draft)
	Total			1,89,000	1,89,000