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PARTNERSHIP-ADMISSION
1. A and B are in partnership with capitals of Rs. 10,000 and Rs. 6,000 and sharing
profits two-third and one-third respectively. On 1st January, 2009 they agreed to admit
C into partnership with one-sixth share on condition that he brings in Rs. 5,500 (Rs.
4,000 to represent his capital and Rs. 1,500 to represent goodwill). The whole Rs.
5,500 is to remain in business.
Give journal entries to record these transactions, the relative shares of A and B for the
future remaining the same as before.
2. A and B are partners sharing profit and loss in the ratio of 5:3. C is admitted into
partnership for 1/5th share in profits and pays Rs. 40,000 as his capital and required
amount of goodwill which is valued at Rs. 60,000 for the firm.
Pass journal entries to record the above adjustment and show the future profit sharing
ratio of the partners.
3. A and B are partners sharing profits and losses in the ratio of 3:2. They agree to admit
C into partnership for 1/5th share which he acquires 3/20 th from A and 1/20th from B.
C brings Rs. 50,000 as capital and Rs. 10,000 for goodwill.
Give necessary journal entries to record C’s admission and show the new profit
sharing ratio.
4. Jhon, Bull and Wool were in Partnership business sharing Profit and Loss in the ratio
of 2:2:1. Their Balance Sheet as on 31-03-2011 as follows.
Liabilities Amount Assets Amount
Sundry Creditors 25,700 Land & Building 50,000
Outstanding Liabilities 3,000 Furniture 13,000
General Reserve 13,000 Stock of Goods 23,500
Capital A/c Sundry Debtors 11,000
Jhon 24,000 Cash 2,200
Bull 24,000
Wool 10,000
99,700 99,700
The partners are agreed to take Tuna as a partner with effect from 1st April, 2011 on
the following terms.
i. Tuna shall bring Rs. 10,000 towards Capital.
ii. The value of Goodwill shall be fixed at Rs. 15,000. Tuna is unable to bring
any share for good will.
iii. The value of stock should be increased by Rs. 5000/-. The furniture should be
depreciated by 10%. The value of Land and Building be enhanced by 20%.
iv. Provision for doubtful debt should be made at 10%.
v. The Outstanding Liabilities include Rs. 1000/- due to Mr. Grip has been paid
by Jhon privately. Necessary entry to reimburse Mr. Jhon as per his request
before admitting the new partner has to be passed.
vi. The new P.S.R will be 5:5:3:2
Prepare Revaluation account, Partners Capital account and Balance Sheet after
admission.
5. A and B are equal partners in a firm with a total capital of Rs. 76,000 also contributed
equally. Their balance sheet shows the following:
Sundry Creditors Rs. 63,000

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Sundry assets Rs. 45,000
Bank Rs. 94,000
They agree to admit C on payment of Rs. 20,000 premium for goodwill and one-third
share of future profit, C at the same time to bring in Rs. 48,000 capital. A and B agree
to leave the premium as additional working capital in the business.
Show the Balance sheet of the new firm A,B and C.
6. Rose & Daisy carried on business in partnership sharing profits and losses in the ratio
of 3:1. Their Balance Sheet as on 31st March, 2011 was as under:
Liabilities Amount Assets Amount
Creditors 93,750 Land & Building 62,500
General Reserve 10,000 Furniture 2,500
Capital Debtors 41,250
Rose 75,000 Less: Provision (1,250)
Daisy 40,000 Bills Receivable 7,500
Stock 50,000
Cash at Bank 56,250
2,18,750 2,18,750
st
Lily was admitted as a partner on 1 April, 2011, on the following terms:
i. She was to bring in Rs. 35,000 as her capital for 1/5th share in profits.
ii. Goodwill of the firm was valued at Rs. 1, 00,000. Lily was to bring his share of
goodwill in cash.
iii. Stock and furniture were to be reduced in value by 10% and provision for doubtful
debts was to be brought up to 10% of the debtors.
iv. The value of land and building was appreciated by 25%.
v. Creditors include an amount of Rs. 5,000 received as commission from Daisy.
The necessary adjustment is required to be made.
You are required to prepare necessary accounts and the Balance Sheet of the newly
constituted firm.
7. A and B are equal partners. C comes in as a new partner who pays Rs. 6,000 as
premium for goodwill. The new profit sharing ratio among A, B and C is 1:2:3.
Pass necessary journal entries showing the appropriation of premium money assuming
that the premium for goodwill is immediately withdrawn by the old partners.
8. The following is the Balance Sheet of R, S and T as on 1st January, 2011 sharing
profits and losses in the ratio of 3:2:1 respectively.
Liabilities Amount Assets Amount
R’s capital 90,000 Building 80,000
S’s capital 80,000 Machinery 70,000
T’s capital 70,000 Debtors 40,000
Creditors 60,000 Less: Provision (2,000)
R’s current account 6,000 Stock 1,05,000
S’s current account 7,000 Cash and bank 15,000
T’s current account 5,000
3,13,000 3,13,000
st th
W is admitted as a partner from 1 January, 2011 for 1/5 share of profit and the new profit
and loss ratio between the old partners being equal. Other terms and conditions of admission
are as follows:

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PARTNERSHIP-ADMISSION
i. W contributes Rs. 75,000 as capital but unable to pay any cash for his share of
goodwill, the value of which is to be calculated on the basis of W’s share in the profits
and the capital contribution made by him.
ii. Partners’ capital accounts are not to be disturbed under any circumstances. All
adjustments relating to goodwill and profit/loss on revaluation are to be through
partners’ current accounts.
iii. Assets and liabilities are to be re-valued as follows:
Buildings-Rs. 1,00,000; Machinery-Rs. 64,000; Provision for bad debt is to be
calculated @ 10% on debtors.
Partners’ after admission, decide not to alter the value of assets and liabilities in the
Balance sheet of the new firm.
iv. Partners’ also decide to make their total capitals in the new firm proportionate to the
the new profit sharing ratio, the necessary adjustments to be made through the
partners’ current accounts.
From the above, prepare a Memorandum Revaluation account, Partners’ capital
accounts and the Balance Sheet of the new firm as 1st January, 2011 after admission.
9. Alf and Bert who were partners, decide to admit Steven into partnership on the basis
of equal division of profits. The existing partners require some sort of compensation
for admission of Steven as partner. Steven brings Rs. 5000 as his capital, but he is
unable to pay premium for goodwill, Rs. 1000 which is due from him. Suggest
various methods by which the existing partners can obtain the compensation they
desire under such circumstances, assuming no goodwill account will appear in the
books of the firm.
10. X, Y and Z are the partners sharing profits and losses in the ratio pf 2:2:1 respectively.
Their Balance Sheet as on 31st March, 2003 is as given below.
Liabilities Amount Assets Amount
Sundry Creditors 51,400 Land & Building 1,00,000
Outstanding Liabilities 6,000 Furniture 26,000
General Reserve 26,000 Stock 47,000
Capital A/cs: Sundry Debtors 22,000
X 48,000 Cash 4,400
Y 48,000
Z 20,000
1,99,400 1,99,400
st
The partners decided to admit Mr. T as a partner with effect from 1 April, 2003 on
the following terms;
i. Mr. T bring Rs. 20,000 as his capital, Rs. 10000 as goodwill.
ii. Mr. T could bring only Rs. 2500 as goodwill in cash and the rest was raised by
the partners.
iii. The value of stock should be increased by Rs. 10000. The furniture should be
depreciated by 10% and the value of land and building enhanced by 20%.
iv. Provision for bad debt should be made @ 10% on sundry debtors.
v. The outstanding liability included Rs. 2000/- due to Mr. R which had been
paid by partner X privately. Necessary entry to be passed to re-imburse Mr. X
before admitting the new partner.

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PARTNERSHIP-ADMISSION
vi. The new profit sharing ratio between X, Y, Z and T is 5:5:3:2.
vii. Creditors includes Rs. 5000 received as commission from Mr. A.
viii. Partners decided not to show goodwill in the books of the firm.
Give journal entries to incorporate such changes, prepare partners’ capital account and
Balance Sheet after admission.
11. Angad and Vivek are partners in a firm sharing profits and losses in the ratio of 3:2.
The balance sheet as on 01.01.2005 stood as follows.
Liabilities Amount Assets Amount
General Reserve 10,000 Debtors 18,000
Creditors 15,000 Stock 20,000
Capital Account Furniture 10,000
Angad 30,000 Plant 30,000
Vivek 25,000 Cash 2,000
80,000 80,000
Gopal is admitted as a partner on the above date on the following terms.
i. He will pay Rs. 10,000 as goodwill for 1/4th share in profit.
ii. The assets are to be revalue as under: Plant Rs. 32,000, Stock Rs. 18000
iii. A provision for bad debt is to be created @ 5% on debtors.
iv. A sum of Rs. 1400 included in creditors is not to be paid. There is an
unrecorded liability for Rs. 5000 which is to be recorded in the books.
v. Gopal to bring Rs. 20,000 as his capital.
vi. The capital of the other partners is to be adjusted in the new P.S.R. for this
current account is to be opened.
12. The following is the Balance Sheet of James & Dias as on 31st December, 2007
Liabilities Amount Assets Amount
Jame’s Capital 60,000 Land 6,000
Dia’s Capital 40,000 Building 40,000
Sundry creditors 18,000 Furniture 4,000
Stock 25,000
Investments 16,000
Bank 15,000
Cash 12,000
1,18,000 1,18,000
The partners shared the profit and losses in the ratio of 3:2
From 1st January, 2008 they agreed to share the profit equally. For this following particulars
are provided
a. Building is to be appreciated by 25%.
b. Current value of furniture to be taken as 3,000
c. Land is valued at Rs. 15,000
d. Stock is to be valued at Rs. 30,000
Prepare revaluation account, partners’ capital account and balance sheet as at 1st January,
2008.
13. Lucy, Rahul and Sanjay are partners sharing profit and loss in the ratio of 1:2:3. Arun
is admitted as a partner who brings Rs. In Rs. 20,000 as his capital for 1/5th share in
the profit. Goodwill of the firm is to be valued at an average profit of last 3 years

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which were Rs. 25,000, Rs. 28,000 and Rs. 37,000 respectively. Arun is unable to
bring cash towards premium for goodwill. Goodwill already appears in the Balance
sheet of Rs. 24,000. Give journal entries.
14. David and Bimal are partners sharing profit in the ratio of 3:2. The Balance Sheet as
on 31st March, 2010 was as follows:
Balance Sheet as at 31st March, 2010
Liabilities Amount Assets Amount
Sundry Creditors 82,000 Cash 32,000
General Reserves 3,000 Stock 20,000
Capital Accounts Debtors 9,400
David 18,000 Less: Provision (400)
Bimal 12,000 Building 50,000
Furniture 4,000
1,15,000 1,15,000
They admitted Chander as a new partner on 1st April, 2010 and new profit sharing
ratio among the new partners is 5:3:2. Chander introduced a capital of Rs. 16000.
Chander was unable to bring any cas for goodwill and so it was decided to value
goodwill on the basis of his share in the profits and the capital contributed by him.
The following revaluations were made at the time of Chander’s admission as follows:
i. Stock had been over valued by Rs. 750 and furniture by Rs. 500.
ii. Provision for doubtful debts to be increased by Rs. 100.
iii. A creditor for Rs. 2,350 was paid off by Partner privately for which he was not
reimbursed.
Prepare the Revaluation account, Partner’s Capital accounts and Balance Sheet after
admission. Show your workings clearly.
15. Neha and Tara are partners in a firm sharing profits and losses in the ratio of 3:2.
Their balance sheet as at 31st March, 2012 stood as follows:-
Liabilities Amount Assets Amount
Capital Account Plant & Machinery 12,000
Neha 8,000 Land & Building 14,000
Tara 10,000 Debtors 19,000
General Reserve 12,000 Less: Provision (4,000)
Workmen Compensation Fund 5,000 Stock 6,000
Creditors 15,000 Cash 3,000
50,000 50,000
th st
They agreed to admit Prachi into partnership for 1/5 share of profit on 1 April, 2012
on the following term:-
a. All debtors to be considered as good and therefore the provision for doubtful
debt to be written back.
b. Value of Land & Building to be increased to Rs. 18,000
c. Value of Plant and Machinery to be reduced by Rs. 2,000
d. The liability against Workmen compensation fund is determined t Rs. 2,000
which is to be paid in the later year.
e. Prachi is to bring in her share of goodwill of Rs. 10,000 in cash.

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PARTNERSHIP-ADMISSION
f. She will further bring in cash to make her capital equal to 20% of the total
Capital of the firm newly constituted.
Prepare Revaluation Account, Partners Capital Account and Balance Sheet of the
reconstituted firm.
16. Sim, Tim and Jim are partners sharing profit and loss equally. Their Balance Sheet as
on 31st march, 2012 stood as follows
Liabilities Amount Assets Amount
Capital Account Plant & Machinery 1,00,000
Sim 2,50,000 Building 2,00,000
Tim 2,00,000 Debtors 1,50,000
Jim 1,50,000 Patent & Copy rights 1,50,000
General Reserve 60,000 Stock 1,25,000
Creditors 1,40,000 Bank 75,000

8,00,000 8,00,000
From April, 2012, the partners decide to share profit and loss in the ratio 3:2:1 and
that purpose the following revised value of the assets were agreed upon:-
Building Rs. 2,75,000, Plant & machinery Rs. 90,000, Patent & Copy Rights Rs.
1,32,500, Stock Rs. 2,00,000, Prepaid Insurance Rs. 5,000 and Debtors Rs. 1,42,500.
Goodwill of the firm valued at Rs. 60,000. Partners decided not to disturb the
Reserves. Also, they decide not to record the revised value of assets in the books of
accounts. You are required to prepare Partner’s Capital Account and Balance Sheet of
the reconstituted firm.
17. Gautam and Rahul are partners in a firm, sharing profit and loss in the ratio of 2:3.
Their Balances Sheet as at 31st March, 2014 was as follows:-
Balance Sheet as at 31st March, 2014
Liabilities Amount Assets Amount
Sundry Creditors 5,000 Goodwill 10,000
Bills payable 15,000 Furniture 25,000
General Reserve 10,000 Stock 15,000
Capital A/c Sundry Debtors 12,000
Gautam 30,000 Less: Provision (2,000)
Rahul 40,000 Cash in Hand 40,000

1,00,000 1,00,000
st
Karim was to be taken as a partner with effect from 1 April, 2014 on the following
terms:-
a) The new profit sharing ratio of Gautam, Rahul and Karim would be 5:3:2.
b) Provision for doubtful debt would be raised to 20% of debtors.
c) Karim would bring in cash his share of capital of Rs. 40,000 and his share of
capital valued at Rs. 10,000.
d) Gautam would take over the furniture at Rs. 22,000.
You are required to prepare Journal entries at the time of Karim’s admission and
prepare Balance Sheet of the reconstituted firm.
18. Divya & Puja are partners in a firm sharing profit & loss in the ratio of 3:2. On 31 st
March, 2015 the Balance Sheet of the firm is as under:-

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PARTNERSHIP-ADMISSION
Liabilities Amount Assets Amount
Sundry Creditors 9,800 Goodwill 16,000
General Reserve 23,400 Land & Building 20,000
Profit & Loss Account 4,000 Investments 66,000
Investment Fluctuation Fund 12,600 Sundry Debtors 18,600
Capital A/c Bills Receivable 7,400
Divya 60,000 Cash in Hand 11,100
Pooja 40,000 Advertisement Suspense A/c 10,700
1,49,800 1,49,800
st
The partners decided that with effect from 1 April, 2015 they share the profit & loss
equally. For this purpose they decided that investment to be valued at ₹ 60,000, goodwill
to be valued at ₹ 24,000, General Reserve not to be distributed among the partners. Pass
necessary journal entries and revised Balance Sheet of the firm.
19. Juliet and Rabani are partners in a firm sharing profit and loss in the ratio of 3:1. On
31st March, 2016 their Balance Sheet was as under:-
Balance Sheet of Juliet and Rabani as at 31t March, 2015
Liabilities Amount Assets Amount
Sundry Creditors 70,000 Plant & Machinery 1,76,000
General Reserve 30,000 Inventory 26,000
Provident Fund 40,000 Sundry Debtors 57,000
Capital A/c Less: Provision (3,000)
Juliet 1,10,000 Cash at Bank 68,000
Rabani 90,000 Profit & Loss Account 16,000
3,40,000 3,40,000

Mike was taken as partner for 1/4th Share with effect from 1st April, 2016 subject to the
following adjustment:-
a) Plant and Machinery was found to be overvalued by ₹ 16,000. It was to be shown in
the books at correct figure.
b) Provision for doubtful debt to be reduced by ₹ 2,000.
c) Creditors included an amount of ₹ 2,000 received as commission from Malani. The
necessary adjustment is required to be made.
d) Goodwill of the firm was valued at ₹ 60,000. Mike was to bring in cash his share of
goodwill along with his capital of ₹ 1,00,000
e) Capital Account of Juliet and Rabani were to be readjusted in the new profit sharing
arrangement on the basis of Mike’s capital, any surplus to be adjusted through current
account and deficiency through cash.
You are required to prepare revaluation account partners’ capital and Balance Sheet of the
reconstituted firm.
20. Annie and Bonnie are partners in a firm, sharing profits and loss equally. Their
Balance Sheet as at 31st March, 2017 was as follows:
Balance Sheet of Annie and Bonnie
as at 31st March, 2017
Liabilities Amount Assets Amount
Sundry Creditors 21,000 Cash at Bank 20,000
General Reserve 15,000 Sundry Debtors 22,000

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PARTNERSHIP-ADMISSION
Capital A/c Less: Provision (1,000) 21,000
Annie 45,000 Stock 10,000
Bonnie 40,000 Plant & Machinery 60,000
Goodwill 10,000
1,21,000 1,21,000
Carl was to be taken as partner for 1/4th Share in the profits of the firm with effect from 1st
April, 2017, on the following terms:
a) Bad debts amounting to ₹ 1,500 written off.
b) Stock to be taken over by Annie at ₹ 12,000.
c) Plant and Machinery to be valued at ₹ 50,000.
d) Goodwill of the firm to be valued at ₹ 20,000.
e) Carl to bring in ₹ 50,000 as his capital. He was unable to bring in cash, his
share of goodwill.
f) General Reserve not to be distributed. For this, it was decided that Carl would
compensate the old partners through his current account.
You are required to:
i. Pass journal entries on the date of Carl’s admission.
ii. Prepare the Balance Sheet of the reconstituted firm.
21. Aditi and Parul are partners in a firm with capital of Rs. 35,000 each. They shared
profits and losses in the ratio of 3:1.
On 1st April, 2017, they admit Chanda into their partnership with 1/5th share in the
profits.
Chanda brings in Rs. 40,000 as her capital and her share of goodwill in cash.
Her share of goodwill is calculated on the basis of her capital contribution and her
share of profit in the firm.
At the time of Chanda’s admission:
a) The firm had a Workman Compensation Reserve of Rs. 60,000 against there
was claim of Rs. 20,000.
b) Creditors of Rs. 8,000 were paid by Aditi privately for which she was not
reimbursed.
c) There was no change in the value of other assets and liabilities.
You are required to, on the date of Chanda’s admission:

i. Calculate the Goodwill of the firm. (Show the workings clearly).

ii. Pass the necessary journal entries to record the above transactions.
22. From the following information, calculate goodwill of the firm of Anmol and Sujay at
the time of admission of Dhruv:
i. At three years’ purchase of Super Profit
ii. On the basis of capitalisation of Super Profit
a) Actual Average Profits of the Firm for the last three years is Rs. 25,000
b) Normal rate of Return is 10%
c) Balance Sheet of Anmol & Sujoy
As at 31st March 2019
Liabilities Amount (`) Assets Amount (`)

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PARTNERSHIP-ADMISSION
Sundry Creditors 40,000 Plant & Machinery 40,000
Bills Payable 10,000 Land & Building 80,000
General Reserves 20,000 Investment (Non-Trade) 50,000
Capital Accounts Sundry Debtors 15,000
Anmol 80,000 Bank 55,000
Sujay 90,000 1,70,000

2,40,000 2,40,000

23. Samita and Punita are partners in a firm sharing profits and losses in the ratio of 3:2.
Their Balance Sheet as at 31st March 2019 as under
Liabilities Amount (`) Assets Amount (`)
Sundry Creditors 14,000 Cash in Hand 30,000
Bank Loan 6,000 Sundry Debtors 22,000
Capital Accounts 10,000 Less: Provision (2,000) 20,000
Smita 30,000 Furniture 10,000
Punita 40,000 70,000 Stock 4,000
1,00,000 1,00,000

On 1st April 2019, Mita is admitted as a new partner on the following term.
a) The new profit sharing ratio of Smita, Punita and Mita to be 5:3:2
b) Provision for doubtful debt to be raised to 10% of the Debtors.
c) Punita to take over the firm’s investments (not recorded in the books0 at Rs. 3,000.
d) Goodwill of the firm to be valued at Rs. 50,000. Mita to bring in cash for her share of
goodwill.
e) 50% of the goodwill to be withdrawn by the old partners.
f) Mita to pay off the Bank Loan on behalf of the firm. The amount due to her by the
firm, to be considered as part of capital contribution.
g) Mita to bring the balance of her capitals in cash, so as to make her capital equal to
1/5th of the total capital of the firm.
You are required to:
i. Pass the journal entries at the time of Mita’s Admission.
ii. Prepare the balance sheet of the reconstituted firm

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