Admission of a Partner

Time Allowed: M.M:31

1
Q1. A, B and C are partners sharing in the ratio of 5 : 4: 3. They admit D for 7 𝑡ℎ share. It is agreed
that B would retain his original share. Sacrificing ratio will be:
(a) A, B and C – 5 : 4 : 3 (c) A and C – 5 : 4
(b) A and C – 4 : 5 (d) A and C – 5 : 3 1
1
Q2. P and S are partners sharing profits in the ratio of 3 : 3. R is admitted with 𝑡ℎ share and he
5
brings in s 84,000 as his share of goodwill which is credited to the Capital Accounts of P and S
respectively with Rs 63,000 and Rs 21,000. New profit sharing ratio will be:
(a) 3 : 1 : 5 (b) 9 : 7 : 4 (c) 3 : 2 : 5 (d) 7 : 9 : 4 1
Q3. A and B share profits and losses equally. They have Rs 20,000 each as capital. They admit C as
equal partner and goodwill was valued at Rs 30,000. C is to bring in Rs 30,000 as his capital and
necessary cash towards his share of goodwill. Goodwill Account will not remain open in books.
If profit on revaluation is Rs 13,000, find the closing balance of the capital accounts.
(a) Rs 31,500; Rs 31,500; Rs 30,000 (c) Rs 31,500; Rs 31,500; Rs 20,000
(b) Rs 26,500; Rs 26,500; Rs 30,000 (d) Rs 20,000; Rs 20,000; Rs 30,000 1
Q4. In case of admission of a partner, they entry for unrecorded investments will be:
(a) Debit Partners Capital A/c and Credit investments A/c
(b) Debit Revaluation A/c and Credit Investment A/c
(c) Debit Investment A/c and Credit Revaluation A/c (d) None of the above 1
Q5. Goodwill of a firm of A and B is valued at Rs 30,000. It is appearing in the books at Rs 12,000. C
is admitted for ¼ share. What amount he is supposed to bring for goodwill?
(a) Rs 3,000 (b) Rs 4,500 (c) Rs 7,500 (d) Rs 10,500 1
Q6. X and Y are partners sharing profits in the ratio of 3 : 2. Z is admitted as a new partner for 1/3rd
share in the profit. 1/3rd of Z’s share was gifted to him by X and balance share was taken by him
from X and Y equally. Computer the profit sharing ratio of X, Y and Z. 2
Q7. X and Y were partners in a firm sharing profits in the ratio of 3 : 2. On 10 – 2004 they admitted Z
as a new partner in a firm for 3 / 13 share in the profit. The new profit sharing ratio will be 5 : 5:
3. Z contributed the following assets towards his capital and for his share of goodwill (premium):
Stock Rs 40,000; Debtors Rs 60,000; Land Rs 1,00,000 and Plant & Machinery Rs 60,000. On
the date of admission of Z, the goodwill of the firm was valued at Rs 5,20,000 which does not
appear in books. 2
Pass necessary journal entries in the books of the firm of Z’s admission. Show your calculations
clearly.
Q8. Goli and Moli are partners and sharing profits in the ratio 3:5. Their capital balances were
Rs.3,50,000 and Rs.2,00,000 respectively. In arriving a these figures, the profits for the year
ended 31st March, 2015, Rs.40,000 had already been credited to partners in the proportion in
which they shared porfits. On 1st April, 2015, they admitted Roly into partnership firm on the
condition that she will bring 1/6th of the adjusted capital of firm. It was discovered that interest
on capital and drawings @10% p.a. was omitted for the year 2014-15. Their drawings during the
year 2014-15 were Goli Rs.50,000 and Moli Rs.6,000at the end of each month. N.P.S.R of
partners is 5:15:4. At the time of admission of Roly, Profit on revaluation a/c were Rs.4,000. Pass
necessary journal entries for omission of interest of capital and drawing, recording capital
contribution by Roly. 4
Q9. Monika, Bhavi and Komal are partners sharing profits in the ratio of 6 : 4 : 1. Komal is guaranteed
a minimum profit of 1,00,000. The firm incurrent a loss of 11,00,000 for the year ended 31st
March, 2018. Pass necessary journal entry regarding deficiency borne by Monika and Bhavi and
prepare Profit and Loss Appropriation Account. 4
Q10. Aman, Chaman and Daman are partners sharing profits and losses in the ratio of 5 : 4 : 1. Their
Balance Sheet as at 31st March , 2018 was as follows:
 Profit – sharing ratio w.e.f. 1St April, 2018 was decided to be equal. It was agreed among the
partners to carry out following adjustments:
Liabilities Rs Assets Rs
Sundry Creditors 1,10,000 Cash at Bank 2,10,000
Salaries Payable 30,000 Sundry Debtors 1,00,000
Outstanding Expenses 10,000 Less: Provision for Doubtful Debts 10,000 90,000
General Reserve 40,000 Stock 50,000
Capital A/c: Furniture 40,000
Aman 3,00,000 Computers 2,00,000
Chaman 1,50,000 Car 2,00,000
Daman 1,50,000 6,00,000
7,90,000 7,90,000
(i) Stock to be reduced to Rs 40,000.
(ii) Provision for Doubtful Debts to be written back, since all debtors are good.
(iii) Computers to be reduced by Rs 20,000.
(iv) Out of the Salaries Payable, Rs 10,000 was not payable as the employee left without
notice.
(v) Outstanding Expenses were not payable anymore.
(vi) An unrecorded asset (Motor Cycle) valued at Rs 10,000 to be accounted.
(vii) Goodwill of the firm was valued at Rs 50,000.
(viii) Total capital of the firm Rs 6,00,000 was to be in profit-sharing ratio, excess capital to be
withdrawn and shortfall to be made good. They also decided that Reserves Account
balance be carried at the same values.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm. 6
Q11. A and B are partners in a firm sharing profits and losses in the ratio of 2:3 Their Balance Sheet as
on March 31st, 2005 was follows:
Liabilities Rs. Assets Rs.
Capital Accounts: Furniture and fixtures 15,000
A 80,000 Machinery 40,000
B 1,20,000 2,00,000 Investments 60,000
Creditors 10,000 Stock 15,000
Salary Outstanding 3,000 Sundry Debtor 38,000
General reserve 5,000 Less: Provision for bad debts 2,000 36,000
Bank Overdraft 15,000 Cash in hand 2,000
Building 65,000
2,33,000 2,33,000
On this date they admitted C for 1/5th share in profits which he acquires wholly from B. The order
terms of agreement were as follows:
a. Goodwill of the firm was to be valued at two years’ purchase of the average of the last three
years’ profits. The profits for the last three years were 2002-03 Rs.55,000; 2003-04 Rs.65,000
and 2004-05 Rs.60,000.
b. C was to bring in Rs.60,000 as his capital and the necessary amount for this share of goodwill.
c. Provision for bad and doubtful debts found in excess by Rs.500.
d. Investments were taken at their market value of Rs.56,000.
e. Furniture and fixtures are valued at Rs.12,000.
f. Rs.3,000 for damages claimed by a customer had been disputed by the firm. It was agreed at
Rs.1,500 by a compromise between the customer and the firm.
g. Building were found undervalued by Rs.16,000 and machinery overvalued by Rs.500.
h. General reserve will appear in the books of the new firm at its original figure.
Capitals of A and B were to be adjusted in the new profit sharing ratio by bringing in or
withdrawl of the necessary amount in cash. Prepare the revaluation a/c, capital a/c and the
balance sheet of the new firm. 8