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Here, you can learn the NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner. Moreover, you can get the links for other chapters to download the links.
The Chapter Goes Like This-
LEARNING OBJECTIVES
After studying this chapter you will be able to-
- Calculate new profit sharing ratio and gaining ratio of the remaining partners after the retirement/death of a partner
- Describe the accounting treatment of goodwill in the event of retirement/ death of a partner
- Make the necessary entries in respect of unrecorded assets and liabilities
- Make necessary adjustment for accumulated profits or losses
- Ascertain the retiring/ deceased partner claim against the firm and explain the mode of its settlement
- Prepare the retiring partner’s loan account, if required
- Prepare the deceased partner’s executor’s account in the case of death of a partner and the balance sheet of a reconstituted firm
You have learnt that retirement or death of a partner also leads to reconstitution of a partnership firm. On the retirement or death of a partner, the existing partnership deed comes to an end, and in its place, a new partnership deed needs to be framed whereby, the remaining partners continue to do their business on changed terms and conditions. There is not much difference in the accounting treatment at the time of retirement or in the event of death. In both the cases, we are required to determine the sum due to the retiring partner (in case of retirement) and to the legal representatives (in case of deceased partner) after making necessary adjustments in respect of goodwill, revaluation of a assets and liabilities and transfer of accumulated profits and losses. In addition, we may also have to compute the new profit sharing’s ratio among the remaining partners and so also their gaining ratio, This covers all these aspects in detail.
4.1 Ascertaining the Amount Due to Retiring/ Deceased Partner
The sum due to the retiring partner (in case of retirement) and to the legal representatives/ executors (in case of death) includes-
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Credit balance of his capital account
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Credit balance of his current account (if any)
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His share of goodwill
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His share of accumulated profits (reserves)
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His share in the gain of revaluation of assets and liabilities
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His share of profits up to the date of retirement/death
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Interest on his capital, if involved, up to the date of retirement/death
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Salary/commission, if any, due to him up to the date of retirement/death
The following deductions, if any, may have to be made from his share-
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Debit balance of his current account (if any)
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His share of goodwill to be written off, if necessary
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His share of accumulated losses
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His share of loss on revaluation of assets and liabilities
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His share of loss up to the date of retirement/death
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His drawings up to the date of retirement/death
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Interest on drawings, if involved, up to the date of retirement/death
Thus, similar to admission, the various accounting aspects involved on retirement or death of a partner are as follows-
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Ascertainment of new profit sharing ratio and gaining ratio
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Treatment of goodwill
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Revaluation of assets and liabilities
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Adjustment in respect of unrecorded assets and liabilities
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Distribution of accumulated profits and losses
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Ascertainment of share of profit or loss up to the date of retirement/death
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Adjustment of capital, if required
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Settlement of the amounts due to retired/deceased partner
Some Glimpses of the Chapter are-
NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner- PDF Download
Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner
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Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner
