ADMISSION OF PARTNER- GOODWILL ADJUSTMENT

Average time 5 to 6 minutes

Remember Use Old Ratio for writing off Goodwill in books & Use sacrificing ratio for Share of
valued goodwill

Question 1
X and Y are partners sharing profit and losses in the ratio of 2 : 1. They admit Z into partnership with l/4th
share in profits which he acquires equally from X and Y. Z brings in Rs. 1,65,000 as capital and Rs.30,000 as
goodwill in cash. Goodwill appears at Rs.60000 in books.
a)Pass journal entries
b) Calculate new profit sharing ratio.
c)Calculate Value of Goodwill of the firm

Question 2
Ram and Shyam are partners. Their profit-sharing ratio is 3 : 2. Mohan joins the partnership for 1/4th share in
profits (of which he acquires 2/3 from Ram and 1/3 from Shyam). Mohan brings in Rs.6,00,000 for capital.
Goodwill of the firm is valued at Rs.9,60,000.Mohan brings his share of goodwill in cash. Goodwill appearing in
the books is 3/4th of valued goodwill.
1/4 of the amount of goodwill is withdrawn by sacrificing partners.
Pass necessary Journal entries and find out new profit sharing ratio.

Question 3
Singh, Gupta and Malik are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 3. They admitted
Lal as new partner, who brings Rs.3,00,000 as capital and Rs. 1,05,000 as his share in Goodwill in cash. Singh
surrendered 1/3rd of his share, Gupta surrendered 1/4th of his share and Malik surrendered 1/5th of his share
in favour of Lal.
Find out Sacrifice Ratio and Pass necessary journal entries for the above.
Also calculate new profit sharing ratio.

Question 4.
A and B are partners sharing profits & losses as 2 : 1. C and D are admitted and profit sharing ratio becomes
4 : 2 : 3 : 1. Goodwill is valued at Rs.2,00,000. D brings required goodwill and Rs.50,000 cash for Capital. C
brings in Rs.50,000 cash and Rs.40,000 worth stock as his capital in addition to the required amount of
goodwill in cash.
Show the necessary journal entries.

Question 5
A,B,C,D were partners in a firm sharing profits & losses equally .E was admitted as a new partner for 1/3 rd
share in the profits of the firm which he acquires equally from C & D. On E’s admission the goodwill of the firm
was valued at Rs.3,00,000.E failed to bring his share of goodwill. Pass necessary journal entries and also
calculate New PSR.
Question 6. HIGH ORDER THINKING SKILLS
Kiya and Leela are partners sharing profits in the ratio of 3:2. Kiran was admitted as a new Partner with 1/5th
share in the profits and she brought in Rs.24,000 as her share of goodwill Premium that was credited to the
capital accounts of kiya and Leela respectively with Rs18,000 and 6,000. Calculate the new profit sharing ratio
of Kiya, Leela and Kiran.

Question 7
A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the firm for l/4th share in profit which
he takes 1/6th from A and 1/12th from B. C brings Rs. 50,000 as goodwill out of his share of Rs.90,000. No
goodwill account appears in the books of the firm. Pass necessary journal entries to record this arrangement.

Question 8
Vimal and Kamal are partners sharing profits in the ratio of 4 :1. They admit Amal as a new partner who brings
Rs. 1,50,000 as his share of goodwill (premium). Amal is entitled to l/3rd share in profits. As between
themselves, Vimal and Kamal agree to share future profits and losses equally.
You are required to :
(a) Calculate the new profit sharing ratio.
(b) Record journal entries showing the appropriation of premium.