Bhim, Swati and Adita are partners sharing profits and losses in the ratio of 5:3:2 respectively. On March 31, 2025, Swati retired. Revaluation of assets and reassessment of liabilities resulted in a loss of Rs. 1,90,000. Journal entry for this would be:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Bhim’s, Swati’s and Adita’s Capital A/cs Dr. Rs. 95,000, Rs. 57,000 and Rs. 38,000, to Revaluation A/c Rs. 1,90,000
The loss on revaluation arose while all three were partners, so on retirement it is borne by all the partners, the retiring partner included, in the old ratio of 5 : 3 : 2. A loss reduces each partner’s claim, so the capital accounts are debited and Revaluation A/c is credited to close it.
Bhim = Rs. 1,90,000 × 5/10 = Rs. 95,000
Swati = Rs. 1,90,000 × 3/10 = Rs. 57,000
Adita = Rs. 1,90,000 × 2/10 = Rs. 38,000
Bhim’s Capital A/c Dr. 95,000
Swati’s Capital A/c Dr. 57,000
Adita’s Capital A/c Dr. 38,000
To Revaluation A/c 1,90,000
Leaving Swati out, as Options (3) and (4) do, would make the continuing partners bear a loss that belongs partly to her.
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