NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner

Safalta Expert Published by: Noor Fatima Updated Sat, 09 Jul 2022 12:43 AM IST

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Here is the information about NCERT Class 12 Books Accountancy Chapter 4. You can give a read to this blog and get PDFs of the subject. 

NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner is accessible here for download purposes. You can download the PDF for and learn from the book anytime you want. Students who are studying in Class 12 and candidates who are preparing for competitive exams can download the PDF for NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner to learn from the reading material.  

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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-

  1. Credit balance of his capital account

  2. Credit balance of his current account (if any)

  3. His share of goodwill

  4. His share of accumulated profits (reserves)

  5. His share in the gain of revaluation of assets and liabilities

  6. His share of profits up to the date of retirement/death

  7. Interest on his capital, if involved, up to the date of retirement/death

  8. 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-

  1. Debit balance of his current account (if any)

  2. His share of goodwill to be written off, if necessary

  3. His share of accumulated losses

  4. His share of loss on revaluation of assets and liabilities

  5. His share of loss up to the date of retirement/death

  6. His drawings up to the date of retirement/death

  7. 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-

  1. Ascertainment of new profit sharing ratio and gaining ratio

  2. Treatment of goodwill

  3. Revaluation of assets and liabilities

  4. Adjustment in respect of unrecorded assets and liabilities

  5. Distribution of accumulated profits and losses

  6. Ascertainment of share of profit or loss up to the date of retirement/death

  7. Adjustment of capital, if required

  8. 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
 

Where can you download NCERT Class 12 Books Accountancy Chapter 4 PDF?

Candidates can download NCERT Class 12 Books Accountancy Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner PDF for free on our page. Links are given below.

Chapter 4- Reconstitution of a Partnership Firm- Retirement/Death of a Partner

Why is NCERT Class 12 Books Accountancy so recommended for board exams?

Almost all the questions that appear in board exams are from NCERT Books Class 12 Accountancy. Moreover, a team of professional teachers drafts these books, which become a reliable source of study for students.
 

Are CBSE Books for Class 12 Accountancy important for board exams?

The chapters in CBSE Books for Class 12 Accountancy are vital for board exams and higher classes. Students should read the chapter given in the CBSE books for Class 12 Accountancy. These stories and practice questions can help gain excellent marks.

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