T S Grewal Solutions 2026-27 [Class 12] – Retirement of a Partner – Q 21 to 30

Retirement of a Partner /

Solution for Q 21 to 30 of Chapter 5 of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Retirement of a Partner from Partnership Accounts class 12. These Solutions are based on topics Calculation of New ratio and sacrificing and gaining ratio, accounting treatment of Goodwill at the time of retirement of a partner, revaluation of assets and liabilities, treatment of reserves and acumulated profits on the reirement of a partner

Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.

These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.

Question 21
Old profit sharing ratio
A B C Total          
4/9 3/9 2/9            
4 3 2 9          
B retires
 
New Profit sharing ratio
A C Total            
5 3 8            
Gaining ratio = New ratio - old ratio
 
A's gaining ratio 5/8 - 4/9 13/72          
C's Gaining Ratio 3/8 - 2/9 11/72          
Final Gaining ratio A C          
    13 11          
B's share of Goodwill
Payment made to B     150000 (Actual payment made by remaining partners)        
Less - B's Capital after Adj.   139200 (retiring partner capital after all adjustments)  
B's share of Goodwill   10800   Hidden Goodwill  
                 
A will contribute   5850          
C will contribute     4950          
Journal Entry
A's Capital A/c Dr 5850   (10800 X 13/24)        
C's Capital A/c Dr 4950   (10800 X 11/24)        
   To B's Capital A/c     10800          
▶ Video Solution: Coming Soon
Question 22
Old profit sharing ratio
Shivam Kapil Deepak          
3 1 2          
Kapil retires
As nothing is given in the question so the gaining ratio will be same as old ratio
 
New Profit sharing ratio
Shivam Deepak Total          
3 2 5          
Gaining ratio
Shivam Deepak Total          
3 2 5          
Kapil's share of Goodwill
Payment made to Kapil     420000        
Less - Kapil's Capital after Adj.   350000        
Kapil's share of Goodwill   70000        
               
Shivam will contribute   42000 (70000 X 3/5)      
Deepak will contribute     28000 (70000 X 2/5)      
Journal Entry
Shivam's Capital A/c     Dr 42000   (70000*3/5)  
Deepak's Capital A/c Dr 28000   (70000*2/5)  
              To Kapil's Capital A/c     70000    
               
Kapil's Capital A/c Dr..   420000      
         To Computer A/c         420000    
▶ Video Solution: Coming Soon
Question 23
Old profit sharing ratio
X Y Z Total  
3 2 1 6  
Y retires
 
New Profit sharing ratio
X Z Total    
1 1 2    
Gaining ratio = New ratio - old ratio
 
Gaining ratio
X Z      
0 1/3      
Journal entry
Z Capital A/c Dr..     50000  
     To Y's Capital A/c     50000
(Being adjustment for Goodwill)        
▶ Video Solution: Coming Soon
Question 24
Old profit sharing ratio
A B C D Total
2 1 2 1 6
C retires
New Profit sharing ratio
A B D Total  
1 1 1 3  
Gaining ratio = New ratio - old ratio
 
A's gaining ratio 1/3 - 2/6 0  
B's Gaining Ratio 1/3 - 1/6 1/6  
D's Gaining Ratio 1/3 - 1/6 1/6  
Final Gaining ratio A B D
    0 1 1
C's share of Goodwill
Total Goodwill is     180000  
C's share 2/6 or 1/3      
C's share of Goodwill   60000  
         
B will contribute   30000  
D will contribute     30000  
Note : A is not gaining anything and hence will not contribute
 
Journal Entry
B's Capital A/c   Dr 30000  
D's Capital A/c Dr 30000  
          To C's Capital A/c       60000
▶ Video Solution: Coming Soon
Question 25
Old profit sharing ratio
A B C      
6 5 4      
A retires
New Profit sharing ratio
B C        
1 4        
Gaining ratio = New ratio - old ratio
 
B's gaining ratio 1/5 - 5/15 -2/15 (Sacrifies)
C's Gaining Ratio 4/5 - 4/15 8/15 (Gains)
Total Goodwill is     180000    
A's share 6/15        
A's share of Goodwill     72000    
On A's retirement B is also loosing 2/15 share
So B will also receive share in Goodwill
B's share 2/15  
B's share of Goodwill 24000 (180000 X 2/15)
     
Journal Entry  
C's Capital A/c   Dr 96000.0    
        To A's Capital A/c     72000  
        To B's Capital A/c       24000  
▶ Video Solution: Coming Soon
Question 26
Account     Dr/Cr Dr Amt Cr Amt
Furniture A/c   Dr 12000  
         To Revaluation A/c       12000
           
Revaluation A/c   Dr 10000  
         To Stock A/c       10000
           
Revaluation A/c   Dr 5000  
         To Machinery A/c       5000
           
Revaluation A/c   Dr 2000  
          To Prov for Doubtful Debts       2000
           
Investment A/c   Dr 10000  
          To Revaluation A/c       10000
           
Creditor A/c   Dr 1000  
         To Revaluation A/c       1000
           
Revaluation A/c     6000  
        To Sangeeta's Capital A/c       3000
        To Saroj's Capital A/c       1800
        To Shanti's Capital A/c         1200
Working Note:
Revaluation A/c not asked in Question.
It is shown here only for understanding
 
Revaluation A/c
Particulars   Amount Particulars   Amount
To Stock A/c   10000 By Furniture A/c   12000
To Machinery A/c   5000 By Investment A/c   10000
To Prov for Doubtful Debts   2000 By Creditor A/c   1000
To Profit transferred to :          
Sangeeta's Capital A/c   3000      
Saroj's Capital A/c   1800      
Shanti's Capital A/c   1200      
           
Total   23000 Total   23000
▶ Video Solution: Coming Soon
Question 27
Account     Dr/Cr Dr Amt Cr Amt    
Building A/c   Dr 20000      
          To Revaluation A/c       20000    
               
Revaluation A/c   Dr 4000      
         To Plant & Machinery A/c       4000    
               
Revaluation A/c   Dr 1000      
         To Prov for Doubtful Debts       1000    
               
Revaluation A/c   Dr 2000      
        To Stock of Raw Material A/c       2000    
               
Stock of FG A/c   Dr 5000      
       To Revaluation A/c       5000    
               
Bank A/c   Dr 2000      
       To Revaluation A/c       2000    
(Amount received on scrap sale)            
               
Revaluation A/c   Dr 5000      
         To Bank A/c       5000    
(Amount paid as compensation to injured employee)              
Fo the last case (f)  
If we assume that the Firm has already paid then the above entry)
We can also assume that there is liability but the amount is not
actually paid yet, In that case the following entry
Revaluation A/c Dr 5000  
         To Workmen Compensation Claim A/c 5000
(Amount payable as compensation to injured employee)
       
Journal entry for distribution of revaluation profit
Revaluation A/c Dr..       15000      
        To Leena Capital A/c     6000    
        To Madan Capital A/c     6000    
        To Naresh Capital A/c         3000    
Revaluation A/c
Particulars     Amount Particulars     Amount
To Plant & Machinery A/c   4000 By Building A/c   20000
To Prov for Doubtful Debts   1000 By Stock of FG A/c   5000
To Stock of Raw Material A/c   2000 By Bank A/c-Scrap   2000
To Bank A/c - Compensation   5000        
To Profit transferred to :            
Leena's Capital A/c   6000        
Madan's Capital A/c   6000        
Naresh's Capital A/c   3000        
               
Total     27000 Total     27000
▶ Video Solution: Coming Soon
Question 28
Asset/Liability     Book Values   Revised Values   Profit Loss
                 
Land   550000   850000   300000  
Building   250000   210000     40000
Computers   100000   70000     30000
Computer Softwares   500000   400000     100000
Sundry Creditors   70000   60000   10000  
Workmen Compensation Claim       5000     5000
                 
Total   1470000   1595000   310000 175000
                 
Net Gain/Loss             135000 (profit)
Akshit Share in Profits 1/3  
     
Akshit share in revaluation Profit 45000 (135000*1/3)
     
Old profit sharing ratio Punit Ramit Akshit Total    
      1 1 1 3    
A retires
 
New Profit sharing ratio Punit Ramit Total      
      3 2 5      
Gaining ratio = New ratio - old ratio
 
Punit's gaining ratio 3/5 - 1/3 4/15        
Ramit's Gaining Ratio 2/5 - 1/3 1/15        
Gaining Ratio Punit Ramit Total      
      4 1 5      
Journal Entry
Punit Capital A/c Dr..     36000   (45000 X 4/5)      
Ramit Capital A/c Dr..   9000   (45000X1/5)      
         To Akshit Capital A/c       45000        
▶ Video Solution: Coming Soon
Question 29
Account       Dr/Cr Dr Amt Cr Amt
General Reserve A/c   Dr 180000  
           To X's Capital A/c       90000
           To Y's Capital A/c       60000
           To Z's Capital A/c       30000
             
X's Capital A/c   Dr 15000  
Y's Capital A/c   Dr 10000  
Z's Capital A/c   Dr 5000  
           To P & L A/c       30000
             
Workmen Compensation Reserve A/c   Dr 24000  
          To X's Capital A/c       12000
          To Y's Capital A/c       8000
          To Z's Capital A/c           4000
Note : No entry to be passed for Employees Provident Fund as it is not part of distributable reserves and profits.
This is a third party liability
▶ Video Solution: Coming Soon
Question 30
Old profit sharing ratio Asha Naveen Shalini Total
      5 3 2 10
Naveen retires
 
New Profit sharing ratio Asha Shalini Total  
      2 3 5  
Gaining ratio = New ratio - old ratio
 
Asha's gaining ratio 2/5 - 5/10 -1/10 (Sacrifice)
Shalini's Gaining Ratio 3/5 - 2/10 2/5 (Gain)
Total Goodwill is 120000
Naveen's share 3/10
Naveen's share of Goodwill 36000
   
On Naveen's retirement Asha is also loosing 1/10 share
So Asha will also receive share in Goodwill
Asha's share 1/10
Asha's share of Goodwill 12000
   
Journal Entry
Asha's Capital A/c   Dr   40000    
Naveen's Capital A/c Dr   24000    
Shalini's Capital A/c Dr   16000    
          To Goodwill A/c     80000  
(G/w existing in the books written off)        
             
General Reserve A/c Dr   40000    
         To Asha's Capital A/c     20000  
         To Naveen's Capital A/c     12000  
         To Shalini's Capital A/c     8000  
             
Shalini's's Capital A/c Dr   48000    
          To Naveen's Capital A/c     36000  
          To Asha's Capital A/c         12000  
▶ Video Solution: Coming Soon

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