Kavin, Madhan and Ranjith are partners sharing profits and losses in the ratio of 4 : 3 : 3 respectively. Kavi

Question 34 of 35

Q. Kavin, Madhan and Ranjith are partners sharing profits and losses in the ratio of 4 : 3 : 3 respectively. Kavin retires from the firm on 31st December, 2018. On the date of retirement, his capital account shows a credit balance of ₹ 1,50,000. Pass journal entries if

(i) The amount due is paid off immediately by cheque.

(ii) The amount due is not paid immediately.

(iii) ₹ 1,00,000 is paid by cheque and the balance in future.

Tamil Nadu DgeTamil Nadu HSC (DGE) Commerce Board 2026Subjective· 3mImportance★★★★★

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Settle Kavin's ₹1,50,000 claim — (i) by bank, (ii) transfer to loan, (iii) part bank ₹1,00,000 and part loan ₹50,000.

Concept (TN HSC Class-12 Accountancy — Retirement of a Partner): The amount standing to the credit of the retiring partner's capital account is his claim. It may be paid in cash/cheque, kept as a loan carrying interest, or settled partly by each.

Journal Entries:

(i) The amount due is paid off immediately by cheque

Particulars	Dr (₹)	Cr (₹)
Kavin's Capital A/c Dr	1,50,000
To Bank A/c		1,50,000
(Being amount due to Kavin paid by cheque)

(ii) The amount due is not paid immediately (transferred to loan)

Particulars	Dr (₹)	Cr (₹)
Kavin's Capital A/c Dr	1,50,000
To Kavin's Loan A/c		1,50,000
(Being amount due to Kavin transferred to his loan account)

(iii) ₹1,00,000 paid by cheque and the balance in future

| Particulars | L.F. | Dr (₹) | Cr (₹) | …

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Same / Similar Concept — real previous-year questions on the same or a closely similar concept, not this exact question.

CBSE 2025Set MARCH1 markMCQ
$Q. If the final amount due to a retiring partner is not paid immediately, it is transferred to :$
(a) Retiring Partner's Loan A/c
(b) Bank A/c
(c) Other Partner's Capital A/c
(d) Retiring Partner's Capital A/c
›Reveal solutionSolution

The unpaid balance due to a retiring partner is transferred to his Loan Account.

On retirement, the balance in the retiring partner's capital account (after all adjustments) shows the total sum due to him (Retirement and Death of a Partner, TN HSC Commerce). If the firm cannot pay it immediately, the amount is not left in the capital account — it is converted into a liability by transferring it to the Retiring Partner's Loan A/c, which is then paid off (often with interest) in ag …

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CBSE 2023Set MARCH1 markMCQ
$Q. If the final amount due to a retiring partner is not paid immediately, it is transferred to :$
(a) Retiring partner's Loan A/c
(b) Bank A/c
(c) Other partners' Capital A/c
(d) Retiring partner's Capital A/c
›Reveal solutionSolution

If the amount due to a retiring partner is not paid immediately, it is transferred to the Retiring Partner's Loan A/c — option (a).

In the Retirement and Death of a Partner topic of the TN HSC Commerce syllabus, once the total amount due to the retiring partner is settled through his Capital Account, it can be discharged in three ways: paid fully in cash, paid partly in cash and the balance kept as a loan, or kept entirely as a loan.

When the firm cannot (or does not) pay the amount immediately, the outstanding balance is transferred out of his Capital Account to a Retiring Partner's Loan Account. The entry is:

Retiring Partner's Capital A/c Dr.

To Retiring Partner's Loan A/c

…

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CBSE 2020Set MARCH1 markMCQ
$Q. X, Y and Z were partners sharing profits and losses equally. X died on 1st April 2019. Find out the share of X in the profit of 2019 based on the profit of 2018 which showed ₹ 36,000.$
(a) ₹ 36,000
(b) ₹ 1,000
(c) ₹ 3,000
(d) ₹ 12,000
›Reveal solutionSolution

X's profit share to the date of death = ₹36,000 × 1/3 × 3/12 = ₹3,000 — option (c).

X, Y and Z shared profits equally, so X's share is 1/3. X died on 1 April 2019, meaning 3 months of 2019 had elapsed (January, February, March). The deceased partner's share of profit up to death is estimated using the previous year's (2018) profit of ₹36,000.

Step-by-step:

Step Working Amount
Base profit (2018) given ₹36,000

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Step	Working	Amount
Base profit (2018)	given	₹36,000

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Q.Kavin, Madhan and Ranjith are partners sharing profits and losses in the ratio of 4 : 3 : 3 respectively. Kavin retires from the firm on 31st December, 2018. On the date of retirement, his capital account shows a credit balance of ₹ 1,50,000. Pass journal entries if

Concept understanding — Settlement of the Retiring or Deceased Partner's Claim

Q.Kavin, Madhan and Ranjith are partners sharing profits and losses in the ratio of 4 : 3 : 3 respectively. Kavin retires from the firm on 31st December, 2018. On the date of retirement, his capital account shows a credit balance of ₹ 1,50,000. Pass journal entries if

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