GRADE : XII SUBJECT : ACCOUNTANCY

PART A : Chapter 5 – Admission of a Partner

1. When a new partner is admitted, the balance of ‘General Reserve’ appearing in the
Balance Sheet at the time of admission is credited to which account? (1)

2. A, B and C are partners in a firm, if D is admitted as a new partner:

(i) Old firm is dissolved
(ii) Old firm and old partnership is dissolved
(iii) Old partnership is reconstituted
(iv) None of the above (1)

3. A and B are partners sharing profit and losses as 2:1. C and D are admitted and the profit
sharing ratio becomes 3:2:4:1. Goodwill is valued at ₹90,000. C and D bring the required
goodwill in cash. Credit will be given to :
(i)A ₹30,000; B ₹15,0000 (ii) A ₹66,000; B ₹24,000
(iii) A ₹33,000; B ₹12,000 (iv) A ₹27,000; B ₹18,000 (1)

4. In case of admission of a partner, the adjustment entry for unrecorded investments will
be:
(i) Debit Partners Capital A/cs and Credit Investments A/c
(ii) Debit Revaluation A/c and Credit Investment A/c
(iii) Credit Revaluation A/c and Debit Investment A/c
(iv) None of the above (1)

5. P and J are partners. B is admitted for ¼ share. State the ratio in which P and J will
sacrifice their share in favour of B? (1)

6. A and B are partners in a firm sharing profit and losses in the ratio of 5:3. They admitted
C as a new partner. The new profit sharing ratio between A,B and C was 3:2:3. A
surrenders 1/5th of his share in favour of C. Calculate B’s sacrifice. (1)

7. (a) R and S are partners in a firm sharing profits in the ratio of 3:2 respectively. They
admit V as a new partner. R surrenders 1/4th of his share and S 1/3rd of his share in favour
of V. Calculate New Profit Sharing Ratio of R, S and V.
(b) A and S are partners in a firm sharing profits in the ratio of 3:2 respectively. They
admitted T as a new partner for 1/4th share. The new profit sharing ratio between A and S
will be 2:1. Calculate their Sacrificing Ratio. (3)

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8. Mukesh and Ramesh are partners sharing profits and losses in the ratio of 2:1
respectively. They admit Rupesh as a partner with 1/4th share on profits with guarantee
that his share of profit shall be at least ₹55,000. The Net Profit of the firm for the year
ending 31st March, 2013 was ₹1,60,000. Prepare Profit and Loss Appropriation A/c. (3)

9. Journalise: (3)

10.

(3)
11. Madhu and Neha were partners in a firm sharing profits and losses in the ratio of 3:5.
Their fixed capitals were ₹4,00,000 and ₹6,00,000 respectively. On 1.1.2016, Tina was
admitted as a new partner for 1/4th share in the profits. Tina acquired her share from
Neha. Tina brought ₹4,00,000 as her capital which was to be kept fixed like the capitals
of madhu and Neha. Calculate goodwill of the firm on Tina’s admission and the new
profit sharing ratio of Madhu, Neha and Tina. Also, pass the necessary Journal entry for
the treatment of goodwill on Tina’s admission considering that she did not bring her
share of goodwill in cash. (4)

12. Asha and Aditi are partners in a firm sharing profits and losses in the ratio of 3:2. The
admit Raghav as a partner for 1/4th share in the profits of the firm. Raghav brings
₹6,00,000 as his capital and his share of goodwill in cash. Goodwill of the firm is be
valued at two years purchase of average profits of last four years.
The profits of the firm during the last four years is given as:
2013 – 14 : ₹3,50,000
2014 – 15 : ₹4,75,000
2015 – 16 : ₹6,70,000
2016 – 17 : ₹7,45,000
The following information is also provided :
(i) To cover management cost an annual charge of ₹56,250 should be made for the
purpose of valuation of goodwill.
(ii) The closing stock for the year ended 31.3.2017 was overvalued by ₹15,000.
Pass necessary Journal entries on Raghav’s admission showing the working notes
clearly. (4)

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13. X and Y are partners in a firm sharing profits in the ratio of 3:2. They admitted Z as a
partner for 1/5th share in profits. At the time of admission of Z, Investments existed at
₹1,00,000 in the Balance Sheet. Half of the Investments were taken over by X and Y in
their profit sharing ratio at book value. Remaining Investments were valued at ₹62,500.
One month after Z’s admission, X and Y decided to allow a salary of ₹50,000 p.a to Z for
the extra efforts and time devoted by him to the business.
Pass necessary Journal entries. (4)

14. Anil and Beena were partners in a firm sharing profits in the ratio of 4:3. On 1st April
2015 they admitted Chahat as a new partner for 1/4th share in the profits of the firm. On
the date of Chahat’s admission the Balance Sheet of Anil and Beena showed a General
Reserve of ₹70,000; a debit balance of ₹7,000 in Profit & Loss A/c and an Investment
Fluctuation Fund of ₹10,000.
The following was agreed upon Chahat’s admission:
(a) Chahat will bring ₹80,000 as her capital and her share of goodwill premium of
₹21,000 in cash.
(b) The market value of Investments was ₹17,000 less than the book value.
(c) New profit sharing ratio was agreed at 2:1:1.
Pass necessary Journal entries for the above on Chahat’s admission. (6)

15. Prepare Revaluation Account and Partners Capital Accounts.

(6)
st
16. Chander and Damini were partners in a firm sharing profits and losses equally. On 31
March, 2017 their Balance Sheet was as follows:
Balance Sheet as on 31st March, 2017
Liabilities ₹ Assets ₹
Sundry Creditors 1,04,000 Cash at Bank 30,000
Capital A/cs: Bills Receivable 45,000
Chander 2,50,000 Debtors 75,000
Damini 2,16,000 Furniture 1,10,000
Land and Building 3,10,000
5,70,000 5,70,000
On 1st April, 2017 they admitted Elina as a new partner for 1/3rd share in the profits on
the following conditions.

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 (i) Elina will bring ₹3,00,000 as her capital and ₹50,000 as her share of goodwill,
half of which is drawn by Chander and Damini.
(ii) Debtors to the extent of ₹5,000 were unrecorded.
(iii) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts
will be created on bills receivables and debtors.
(iv) Value of Land and Building will be appreciated by 20%.
(v) There being a claim for damages, a liability to the extent of ₹8,000 will be created
for the same.
Prepare Revaluation A/c and Partners’ Capital A/cs. (8)(6)

17. A and B share profits in the ratio of 3:1. Their Balance Sheet was as under:
Liabilities ₹ Assets ₹
Capitals: Machinery 50,000
A 60,000 Goodwill 16,000
B 29,000 Patent 6,000
Workmen Compensation Fund 9,000 Furniture 10,000
Creditors 24,000 Sundry Debtors 30,000
Outstanding Expenses 1,500 (-) Povision 4,000 26,000
Bills Payable 15,000 Stock 25,000
Cash 5,500
1,38,500 1,38,500

They admitted C as a Partner , the new profit sharing ratio being 2:1:1 and all partners
agreed that:
(a) C will bring as capital ₹33,000 and ₹ 14,000 as his share of goodwill.
(b) There is a claim of ₹ 1,000 for workmen compensation.
(c) 5% discount is expected to be received from creditors.
(d) Outstanding expenses are to be reduced to ₹ 1,200.
(e) Accrued income of ₹ 1,000 is to be brought in the books.
(f) Provision for bad debts was found in excess by ₹1,500.
Prepare Revaluation A/c and Partners’ Capital A/cs. (6)(8)

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18. Mohan and Mahesh were partners in a firm sharing profits in the ratio of 3:2. On 1st April
2019 the admitted Nusrat, a physically challenged woman, as a partner in the firm. The
Balance Sheet of Mohan and Mahesh on that date was as under:
Balance Sheet as on 1st April, 2019
Liabilities ₹ Assets ₹
Creditors 2,10,000 Cash at Bank 1,40,000
Workmen Compensation Debtors 1,60,000
Reserve 2,50,000 Stock 1,20,000
General Reserve 1,60,000 Machinery 1,00,000
Capital A/cs: Building 2,80,000
Mohan 1,00,000
Mahesh 80,000
8,00,000 8,00,000
It was agreed that:
(i) The value of Building and Stock be appreciated to ₹3,80,000 and ₹1,60,000
respectively.
(ii) The liability of Workmen Compensation was determined at ₹2,30,000.
(iii) Nusrat brought in her share of goodwill ₹1,00,000 in cash.
(iv) Nusrat was to bring further cash as capital ₹ 1,20,000.
(v) The future profit sharing proportions will be Mohan 2/5th, Mahesh 2/5th and
Nusrat 1/5th.
Pass Journal entries for the above adjustments made at the time of admission of
Nusrat. (8) (6)

19. A, B and C are partners sharing profits and losses in the ratio of 3:2:1. D is admitted as a
partner on 1st April 2019for 1/4th share and is to pay ₹2,50,000 as capital. Following is
the Balance Sheet on the date of admission:
Liabilities ₹ Assets ₹
Capital A/cs: Building 2,50,000
A 3,00,000 Machinery 2,00,000
B 3,00,000 Furniture 1,50,000
C 2,00,000 Stock 1,00,000
Creditors 1,50,000 Debtors 1,50,000
Bills Payable 50,000 Bills Receivable 1,00,000
Bank 50,000
10,00,000 10,00,000
Following adjustments are required on D’s admission:
(i) Out of the Creditors, ₹50,000 is owing to D. this amount shall be adjusted towards his
capital.
(ii) Bills of ₹80,000 were discounted with the bank, out of which, a bill of ₹20,000 was
dishonoured on 31st March 2019, but no entry was passed for it. Due dates of the
other discounted bills fall in April 2019.

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 (iii) Advertisement Expenditure of ₹6,000 is to be carried forward to the next accounting
period.
(iv) Expenses debited in the Profit and Loss A/c includes a sum of ₹10,000 paid for B’s
personal life insurance policy.
(v) A provision for doubtful debts @ 5% is to be created against debtors.
(vi) Expenses on revaluation of ₹10,100 are paid by A.
(vii) During the year, part of the furniture was sold for ₹25,000. Book value of the
furniture sold was ₹40,000. The proceeds were wrongly credited to the Sales A/c.
(viii) Value of goodwill is ₹7,56,000 and D brings his share by cheque.
Prepare Revaluation A/c, Partners’ Capital A/cs and Balance Sheet of the firm after
D’s admission. (6) (8)

20. B and C are partners in a firm sharing profits and losses in the ratio of 5:3. They admit A
in the firm on 1st April 2019, when the Balance Sheet was as follows:
Liabilities ₹ Assets ₹
B’s Capital 3,20,000 Goodwill 80,000
C’s Capital 3,40,000 Machinery 3,80,000
General Reserve 80,000 Furniture 50,000
Bank Loan 60,000 Debtors 2,30,000
Creditors 60,000 Stock 70,000
Bank 50,000
8,60,000 8,60,000

Terms of A’s Admission were as follows:

(i) A will bring ₹3,00,000 by cheque as his share of capital and will get 1/3rd share in
profits.
(ii) A is not to bring goodwill in cash. B and C raise goodwill in the books which is
valued on the basis of 2 year’s purchase of the average profit of the last three
years.
(iii) Average profit of last three years is ₹60,000.
(iv) Machinery and stock are revalued at ₹4,50,000 and ₹80,000 respectively.
Prepare Profit and Loss adjustment A/c, Partners’ Capital A/cs and the Balance
Sheet of the firm after taking into account the above adjustments. (6)
(8)

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 21.

Dev brings ₹ 72,500 as his share of capital.

You are required to prepare Revaluation Account and Partners’ Capital Accounts. (6)

(8)

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