ADMISSION OF A PARTNER

1. A and B share profits and losses equally. They have Rs20,000each as capital. They admit C as equal partner and
goodwill was valued at Rs30,000. C is to bring in Rs30,000as his capital and necessary cash towards his share of
goodwill. Goodwill Account will not remain open in books. If profit on revaluation is Rs13,000,find the closing
balance of the capital accounts.
(a) Rs31,500;Rs31,500; Rs30,000 (b) Rs31,500; Rs31,500; Rs20,000
(c) Rs26,500; Rs26,500; Rs30,000 (d) Rs20,000;Rs20,000;Rs30,000
2. If, at the time of admission, the revaluation A/c shows a profit, it should be credited to :
(a) Old partners capital accounts in the old profit sharing ratio.
(b) All partners capital accounts in the new profit sharing ratio.
(c) Old partners capital accounts in the new profit sharing ratio.
(d) Old partners capital accounts in the sacrificing ratio.
3. In case of admission of a partner, the entry for unrecorded investments will be:
(a) Debit Partners Capital A/cs 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
4. A and B are partners of a partnership firm sharing profits in the ratio of 3 : 2 respectively. C was admitted for
1/5th share of profit. Machinery would be appreciated by 10% (book value Rs80,000) and building would be
depreciated by 20% (Rs2,00,000). Unrecorded debtors of Rs1,250would be brought into books now and a
creditor amounting to Rs2,750 died and need not pay anything on this account. What will be profit/loss on
revaluation?
(a) Loss Rs28,000 (b) Loss Rs40,000 (c) Profits Rs28,000 (d) Profits Rs40,000
5. If at the time of admission if there is some unrecorded liability, it will be ______________to____________ Account
(a) Debited, Revaluation (b) Credited, Revaluation (c)Debited, Goodwill (d) Credited, Partners’
6. Revaluation Account or Profit and Loss Adjustment A/c is a
(a) Real Account (b) Personal Account (c) Nominal Account (d) Asset Account
7. A and B are partners sharing profits in the ratio of 2 : 3. Their Balance Sheet shows Machinery at
Rs2,00,000;Stock at Rs80,000and Debtors at Rs1,60,000.C is admitted and new profit sharing ratio is agreed at 6
: 9 : 5. Machinery is revalued at Rs1,40,000 and a provision is made for doubtful debts @5%. A’s share in loss on
revaluation amount to Rs20,000. Revalued value of Stock will be :
(a) Rs62,000 (b) Rs1,00,000 (c) Rs60,000 (d) Rs98,000
8. If at the time of admission, some profit and loss account balance appears in the books, it will be transferred to:
(a) Profit & Loss Adjustment Account (b) All partners‘ Capital Accounts
(c) Old partners‘ Capital Accounts (d) Revaluation Account
9. At the time of admission of a partner, what will be the effect of the following information? Balance in Workmen
compensation reserve Rs40,000. Claim for workmen compensation Rs45,000.
(a) Rs45,000 Debited to the Partner’s capital Accounts. (b) Rs40,000Debited to Revaluation Account.
(c) Rs5,000Debited to Revaluation Account. (d) Rs5,000 Credited to Revaluation Account.

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10. Angle and Circle ware partners in a firm. Their Balance Sheet showed Furniture at Rs2,00,000; Stock at
Rs1,40,000;Debtors at Rs1,62,000 and Creditors at Rs60,000. Square was admitted and new profit-sharing ratio
was agreed at 2:3:5. Stock was revalued at Rs1,00,000, Creditors of Rs15,000are not likely to be claimed, Debtors
for Rs2,000 have become irrecoverable and Provision for doubtful debts to be provided @ 10%. Angle’s share in
loss on revaluation amounted to Rs30,000. Revalued value of Furniture will be:
(a) Rs2,17,000 (b) Rs1,03,000 (c) Rs3,03,000 (d) Rs1,83,000
11. At the time of admission of new partner, the increase in the value of assets is debited to:
(a) Revaluation A/c (b) Assets A/c (c) Capital A/cs of old partners (d) None of these
12. The capitals of A and B are Rs 48,000 and Rs 32,000 respectively and their profit sharing ratio is 3:2. C is
admitted for 1/5th share. The amount of capital brought by C will be:
(a) Rs 16,000 (b) Rs 20,000 (c) Rs 64,000 (d) Rs 40,000
13. A and B are partners. C is admitted for 1/5th share. C brought Rs 1,20,000 as his share of capital. The total capital
of firm will be:
(a) Rs 1,00,000 (b) Rs 2,00,000 (c) Rs 4,00,000 (d) Rs 6,00,000
14. X and Y share profits equally. Z is admitted for 1/7th share. New profit sharing ratio will be:
(a) 1:2:3 (b) 3:3:1 (c) 1:3:3 (d) 3:2:1
15. P and Q are partners. S is admitted for 1/5th share and he brings his share of capital of 25,000. The total capital
of firm will be:
(a) Rs 75,000 (b) Rs 1,00,000 (c) Rs 1,25,000 (d) Rs 1,50,000
16. If at the time of admission, there is some unrecorded asset, it will
(a) Debited to Revaluation A/c (b) Credited to Revaluation A/c
(c) Transferred to Old Partners' Capital A/cs (d) Transferred to All Partners' Capital A/cs
17. L and M are partners in a firm sharing profits and losses in the ratio of 3: 2. Their capitals were Rs 6,40,000 and
Rs 4,00,000 respectively. N was admitted for 1/5th share in the profits of the firm. He brought Rs 4,80,000 as his
capital. The goodwill of the firm will be:
(a) Rs 8,80,000 (b) Rs 1,76,000 (c) Rs 13,60,000 (d) Rs 2,72,000
18. A and B are partners sharing profits in the ratio of 3:2. A's capital is Rs 72,000 and B's capital is Rs 48,000. C is
admitted for 1/5th share in profits. The amount of capital which C should bring:
(a) Rs 30,000 (b) Rs 24,000 (c) Rs 1,50,000 (d) Rs 96,000
19. A and B are partners in a firm with capitals of Rs 1,80,000 and 2,00,000 respectively. C was admitted for 1/3rd
share in profit and brings Rs 3,40,000 as capital. The amount of goodwill is:
(a) Rs 2,40,000 (b) Rs 1,00,000 (c) Rs 1,50,000 (d) Rs 3,00,000
20. If the incoming partner brings the amount of goodwill in cash and also a balance exists in goodwill account then
the existing Goodwill is written off among the old partners:
(a) in new profit sharing ratio (b) in old profit sharing ratio (c) in sacrificing ratio (d) in gaining ratio
21. In the Balance Sheet prepared after new partnership agreement, assets and liabilities are recorded at:
(a) original value (b) revalued figure (c) at realisable value (d) at current cost
22. In case of Workmen Compensation Reserve, if the amount claimed is more than the amount lying in WCR, then
the shortfall will be recorded in
(a) Revaluation Account (b) Partners' Capital Accounts (c) Balance Sheet (d) None of these
23. At the time of admission of a partner, what will be the effect of the following information-Balance in Workmen
Compensation Reserve Rs 40,000. Claim for Workmen Compensation Rs 45,000?
(a) Rs 45,000 Debited to the Partner's Capital Accounts (b) Rs 40,000 Debited to Revaluation Account

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 (c) Rs 5,000 Debited to Revaluation Account (d) Rs 5,000 Credited to Revaluation Account
24. Kalki and Kumud were partners sharing profits and losses in the ratio of 5:3. On 1st April, 2021 they admitted
Kaushtubh as a new partner and new ratio was decided as 3:2:1.
Goodwill of the firm was valued as Rs 3,60,000. Kaushtubh could not bring any amount for goodwill. Amount of
goodwill share to be credited to Kalki and Kumud Accounts will be: -
(a) Rs 37,500 and Rs 22,500 respectively (b) Rs 30,000 and Rs 30,000 respectively
(c) Rs 36,000 and Rs 24,000 respectively (d) Rs 45,000 and Rs 15,000 respectively
25. Asha and Nisha are partners sharing profits in the ratio of 2:1. Kashish was admitted for 1/4th share of which
1/8th was gifted by Asha. The remaining was contributed by Nisha. Goodwill of the firm is valued at Rs 40,000.
How much amount for goodwill will be credited to Nisha's Capital account?
(a) Rs2,500 (b) Rs 5,000 (c) Rs 20,000 (d) Rs 40,000
26. Fill in the Blanks
(i) Admission of a partner results in_____________ of the partnership firm.
(ii) PQ and Rare sharing profits and losses in the ratio of 3/8, 1/4 and 3/8 respectively. M. a new partner is given
1/4th share. Then new profit-sharing ratio will be______________
(iii) For any increase in the value of asset, the Revaluation Account is______________
(iv) The capital balances of P and Q are Rs 45,000 and Rs 25,000 respectively after making all the adjustments. If
C, the incoming partner, is to bring 1/3rd of the total capital of the firm, then his share of capital will be________
(v) If goodwill is appearing in the Balance Sheet at the time of admission of a new partner, the existing goodwill is
written off among ____________ partners in _____________ratio.
(vi) Investment Fluctuation Reserve is a reserve set aside out of profit to adjust the difference between
___________and _______________of investment.
(vii) A new partner contributes ___________. at the time of his admission to compensate the old partners
27. Tina, Sonali and Niru were partners in a firm two years ago when Sonali died. Later on, Tina and Niru had
decided to carry on the partnership amongst themselves sharing profits in the ratio of 2:1. However, in wake of
deteriorating financial position of the family of Sonali, both Tina and Niru agreed upon admitting the minor
daughter of Sonali named Mona into the firm. The mother of Mona consented to act as the legal guardian of the
child until she attained the age of maturity.
On 31st March, 2023 the Balance Sheet of Tina and Niru stood as follows:
Liabilities Amount (Rs) Assets Amount(Rs)
Tina's Capital 30,000 Freehold Property 10,000
Niru 's Capital 15,000 Furniture 3,000
General Reserve 12,000 Stock 6,000
Creditors 8,000 Debtors 40,000
Cash 6,000
65,000 65,000
Tina and Niru share profits and losses in the ratio of 2: 1. They agree to admit Mona into the firm subject to the
following terms and conditions:
(a) Mona will bring in Rs 10,500 of which Rs 4,500 will be treated as his share of goodwill to be retained in the
business.
(b) Mona will be entitled to 1/4th share of profits in the firm.
(c) A provision for bad and doubtful debts is to be created at 3% on the debtors.
(d) Furniture is to be depreciated by 5%.

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 (e) Stock is to be revalued at Rs 5,250
(i) Mention the provision of the Partnership Act affected by the admission of Mona and the clauses governing
this provision.
(ii) Prepare Revaluation Account, Partners' Capital Accounts and opening Balance Sheet of the new firm.
28. Amit and Bikash are partners in a firm sharing profits in the ratio of 3:2. Their Balance Sheet as at 31⁰t
December, 2022 stood as under:
Liabilities Amount (Rs) Assets Amount(Rs)
Capital A/cs Machinery 33,000
Amit 35,000 Furniture 15,000
Bikash 30,000 65,000 Investments 20,000
General Reserves 10,000 Stock 23,000
Bank Loan 9,000 Debtors 19,000
Creditors 36,000 Less: Provision for 17,000
Doubtful Debts 2,000
Cash 12,000
1,20,000 1,20,000
On that date they admitted Chiku into partnership for 1/4th share in the profit on the following terms:
(i) Chiku bring capital proportionate to his share. He brings Rs 7,000 in cash as his share of goodwill.
(ii) Debtors are all good.
(iii) Depreciate stock by 5% and furniture by 10%
(iv) An outstanding bill for repairs Rs 1,000 will be brought in books.
(v) Half of the investments were to be taken over by Amit and Bikash in their profit-sharing ratio at book value.
(vi) Bank loan is paid off.
(vii) Partners agreed to share future profits in the ratio of 3:3:2.
Prepare Revaluation Account, partners' Capital Accounts and Balance Sheet after admission of Chiku into the
partnership
29. Following is Balance Sheet of Anshul and Bharti, who had been sharing profits in proportion of 3/4th
and 1/4th as at 31st March, 2022:
Liabilities Amount (Rs) Assets Amount(Rs)
Creditors 1,50,000 Cash at Bank 90,000
General Reserve 24,000 Bills Receivable 12,000
Capital A/cs: Debtors 64,000
Anshul 1,14,000 Machinery 80,000
Bharti 62,000 1,76,000 Furniture 4,000
Land and Building 1,00,000
3,50,000 3,50,000
They agree to take Shashi into partnership for 1/5th share on 1st April, 2022.
The partners have raised the following questions:
(i) How will be the new profit sharing ratio of the partners determined?
(ii) Goodwill Account be valued at Rs 80,000. Shashi is unable to bring cash for her share of goodwill.
How will the goodwill be recorded in the books?

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 (iii) Machinery and Furniture be reduced by 10% and 5%. Provision for Doubtful Debts be created on
Debtors.
That Land and Building be appreciated by 20%. What is the amount of profit or loss on the revaluation?
(iv) When Shashi pays Rs 56,000 as Capital for 1/5th share in the future profit. What will be the capital
account balances of the partners in the reconstituted firm as at 1st April, 2022?
(v) State the need for treatment of goodwill on admission of a partner.
30. A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. On 31st March, 2023 their
Balance Sheet was as follows:
Balance Sheet of A, B and C
as at 31st March, 2023
Liabilities Amount (Rs) Assets Amount(Rs)
Creditors 84,000 Bank 17,000
General Reserve 21,000 Debtors 23,000
Capitals: Stock 1,10,000
A 60,000 Investments 30,000
B 40,000 Furniture and Fittings 10,000
C 20,000 1,20,000 Machinery 35,000
2,25,000 2,25,000
On the above date D was admitted as a new partner and it was decided that:
(i) The new profit sharing ratio between A, B, C and D will be 2:2:1:1.
(ii) Goodwill of the firm was valued at Rs 90,000 and D brought his share of goodwill premium in cash.
(iii) The market value of investments was Rs 24,000.
(iv) Machinery will be reduced to Rs 29,000.
(v) A creditor of Rs 3,000 was not likely to claim the amount and hence to be written off.
(vi) D will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted
firm.
31. Pinky, Qumar and Roopa are partners in a firm sharing profits and losses in the ratio of 3:2:1. Seema is
admitted as a new partner for 1/4th share in profits of the firm, which he gets 1/8th from Pinky and
1/16th each from Qumar and Roopa. The total capital of the new firm after Seema's admission will be
Rs 2,40,000. Seema is required to bring in cash equal to 1/4th of the total capital of the new firm. The
capitals of the old partners also have to be adjusted in proportion of their profit sharing ratio. The
capitals of Pinky, Qumar and Roopa after all adjustments in respect of goodwill and revaluation of
assets and liabilities have been made, are Pinky Rs 80,000. Qumar Rs 30,000 and Roopa Rs 20,000.
Calculate the capitals of all the partners and record the necessary journal entries for doing adjustments
in respect of capitals according to the agreement between the partners.
32. Sajana and Alok were partners in a firm sharing profits and losses in the ratio 3:2. On 31st March 2018
their Balance Sheet was as follows:
Balance Sheet of Sanjan and Alok as on 31-3-2018
Liabilities Amount (Rs) Assets Amount(Rs)

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 Creditors 60,000 Cash 1,66,000
Workmen’s 60,000 Debtors 1,46,000
Compensation fund
Capitals: Less: Provision for 1,44,000
doubtful debts 2,000
Sajana 5,00,000 Stock 1,50,000
Alok 4,00,000 Investments 2,60,000
Furniture 3,00,000
10,20,000 10,20,000
On 1st April, 2018, they admitted Nidhi as a new partner for 1/4th share in the profits on the following
terms:
(a) Goodwill of the firm was valued at Rs 4,00,000 and Nidhi brought the necessary amount in cash for
her share of goodwill premium, half of which was withdrawn by the old partners.
(b) Stock was to be increased by 20% and furniture was to be reduced to 90%.
(c) Investments were to be valued at Rs 3,00,000. Alok took over investments at this value.
(d) Nidhi brought Rs 3,00,000 as her capital and the capitals of Sanjana and Alok were adjusted in the
new profit sharing ratio.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm
on Nidhi’s admission.
33. Rojita and Sandhya were partners sharing profits in the ratio of 3:2. Their Balance Sheet as at 31.3.2023
was as follows:

Liabilities Amount (Rs) Assets Amount(Rs)

Provision for Bad 1,000 Land and Building 80,000
Debts
Creditors 60,000 Machinery 20,000

Capitals A/cs Furniture 10,000

Rojita 60,000 Debtors 25,000
Sandhya 40,000 1,00,000 Cash 16,000
Profit and Loss Account 10,000
1,61,000 1,61,000
Deepika was admitted to the partnership for 1/5th share in the profits on the following terms
(a) The new profit-sharing ratio was decided as 2:2:1.
(b) Deepika will bring Rs 30,000 as his capital and Rs 15,000 for his share of goodwill,
(c) Half of goodwill amount was withdrawn by the partner who sacrificed his share of profit in favour of
Deepika.
(d) A provision of 5% for bad and doubtful debt was to be maintained.
(e) An item of Rs 500 included in sundry creditors was not likely to be paid.
(f) A provision of Rs 800 was to be made for claims for damages against the firm.
After making the above adjustments, the capital accounts of Rojita and Sandhya were to be adjusted on
the basis of Deepika 's capital. Actual cash was to be brought in or to be paid off as the case may be.
Prepare Revaluation Accounts, Partners' Capital Accounts and Balance Sheet of the new firm.

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34. Charu and Harsha were partners in a firm sharing profits in the ratio of 3:2. On 1-4-2022, their Balance
Sheet was as follows:
Balance Sheet of Charu and Harsha
as at 1.04.2022
Liabilities Amount (Rs) Assets Amount(Rs)
Creditors 17,000 Cash 6,000
General Reserve 4,000 Debtors 15,000
Workmen 9,000 Investments 20,000
Compensation Fund
Investment 11,000 Plant 14,000
Fluctuation Fund
Provision for doubtful 2,000 Land and Building 38,000
debts Capitals:
Capitals:
Cahru 30,000
Harsha 20,000
93,000 93,000
On the above date, Vaishali was admitted for 1/4th share in the profits of the firm on the following
terms:
(i) Vaishali will bring Rs 20,000 for her capital and Rs 4,000 for her share of goodwill premium.
(ii) All debtors were considered good.
(iii) The market value of investments was Rs15,000.
(iv) There was a liability of Rs 6,000 for workmen compensation.
(v) Capital accounts of Charu and Harsha are to be adjusted on the basis of Vaishali's capital by opening
Current accounts.
Prepare Revaluation Account and Partners' Capital Accounts.
35. On 31st March, 2023, the Balance Sheet of Roshan and Rinku who shared profits in 3: 2 ratio was as
follows:
Liabilities Amount (Rs) Assets Amount(Rs)
Creditors 20,000 Cash 5,000
Profit and Loss 15,000 Sundry Debtors 20,000
Account
Capital Accounts: Less: Provision 700 19,300
Roshan 40,000 Stock 25,000
Rinku 30,000 70,000 Plant and Machinery 35,000
Patents 20,700
1,05,000 1,05,000
On this date, Birendra was admitted as a partner on the following conditions:
(a) ' Birendra ' will get 4/15th share of profits.

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 (b) ' Birendra ' had to bring Rs 30,000 as his capital to which amount other Partners' Capitals shall have
to be adjusted.
(c) He would pay cash for his share of goodwill which would be based on 2½ years' purchase of average
profits of past four years.
(d) The assets would be revalued as under:
Sundry Debtors at book value less 5% provision for bad debts, Stock at Rs 20,000, Plant and
Machinery at Rs 40,000.
(e) The profits of the firm for the years ended 31st March, 2020, 2021 and 2022 were Rs 20,000, Rs
14,000 and Rs 17,000 respectively.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the new firm.
36. Subrat and Vijay are partners in a firm sharing profits in the ratio of 3: 2. Their Balance Sheet as on 31st
March, 2022 was as follows:
Balance Sheet of Subrat and Vijay
as on 31.03.2022
Liabilities Amount (Rs) Assets Amount(Rs)
Sundry Creditors 20,000 Cash 12,000
Provision for doubtful 2,000 Debtors 18,000
debts
Outstanding Salary 3,000 Stock 20,000
General Reserve 5,000 Furniture 40,000
Subrat 60,000 Plant and Machinery 40,000
Vijay 40,000
1,30,000 1,30,000
On the above date, Sumit was admitted for 1/6th share in the profits on the following terms:
(i) Sumit will bring Rs 30,000 as his capital and Rs 10,000 for his share of goodwill premium, half of
which wil be withdrawn by Subrat and Vijay.
(ii) Debtors Rs1,500 will be written off as bad debts and a provision of 5% will be created for bad and
doubtful debts.
(iii) Outstanding salary will be paid off.
(iv) Stock will be depreciated by 10%, furniture by Rs 500 and Plant and Machinery by 8%.
(v) Investments Rs 2,500 not mentioned in the balance sheet were to be taken into account.
(vi) A creditor of Rs 2,100 not recorded in the book was to be taken into account.
Pass necessary Journal entries for the above transactions in the books of the firm on Sumit's admission
37. Ajay and Vijay were partners in a firm sharing profits in the ratio 5: 3. They admit Raju as a partner
with 1/5th contributed according to the proportionate capital. The financial position was as under:
Liabilities Amount (Rs) Assets Amount(Rs)
Creditors 19,000 Goodwill 10,000
Bills Payable 8,000 Land and Building 25,000
Capital Account Plant and Machinery 35,000
Ajay 55,000 Stock 20,000

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Vijay 30,000 85,000 Debtors 25,000
General Reserve 16,000 Investment 14,000
Provision for bad and 1,500 Cash 2,400
doubtful debts
Out standing Salary 2,400 Prepaid Insurance 500
1,31,900 1,31,900
They agreed to admit Raju on the term that the capital of partners were to be adjusted in new profit
sharing 5:3:2 respectively. From the information given below, complete the postings of Revaluation
Account, Partners' Capital Account and Balance Sheet of the new firm.
Dr. Revaluation A/c Cr.
Particulars Amount (Rs) Particulars Amount (Rs)
To………………. …………………….. By …………………….. ………………….
To………………. …………………….. By …………………….. ………………….
To………………. …………………….. By …………………….. ………………….
…………………….. …………………
Dr. Partner, Capital A/c Cr.
Particulars Ajay(Rs) Vijay(Rs) Raju(Rs) Particulars Ajay(Rs) Vijay(Rs) Raju(Rs)
To Good …………… ……………… By Balance …………… ……………
will A/c b/d

To 6,250 3,750 By General …………… ……………

investment Reserve
A/c A/c

To cash A/c 2,400 By …………… ……………

Revaluation
A/c
To Balance …………… …………… By …………… ……………
of Capital Premium
c/d (after for
adjustment) Goodwill
74,250 41,550 74,250 41,550
To Ajay's …………… By Balance 61,750 31,650
Current A/c of Capital
b/d(after
adjustment)
To balance …………… …………… …………… By cash A/c ……………
c/d
By Vijay's ……………
Current
A/c

61,750 32,025 23,350 61,750 32,025 23,350

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 Balance Sheet of the New Firm

Liabilities Amount (Rs) Assets Amount(Rs)

Creditors 17,800 Land and Building 38,000
Bills Payable 8,000 Plant and Machinery 30,000
Capital Account Stock 20,000
Ajay …………. Debtors 25,000
Vijay ……………… Investment 4,000
Raju ………… 1,16,750 Cash 25,550
(Rs 2,400+Rs 5,200-Rs
2,400+Rs 23,350)
Outstanding Repairs 100 Prepaid Insurance 500
Provision for bad and 1,000 Vijay’s Current A/c …………….
doubtful debts
Out standing Salary 2,400
Ajay’s Current A/c ……….
1,49,425 1,49,425

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