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PEAK PERFORMANCE
BAS MASTERY WORKSHEET
ITNA
KARLO ACCOUNTANCY
CLASS 12
Chapter 4: Admission of a Partner

1. P and Q are partners in a firm sharing profits in the ratio 7 : 3. R is admitted into the firm for 2/5th share
of profit which he takes from P and Q in the ratio 2 : 1. The new ratio will be: 1
(a) 7 : 3 : 4 (b) 13 : 5 : 12
(c) 11 : 8 : 5 (d) 14 : 5 : 13

2. A and B are partners sharing profits in the ratio of 2 : 1. C is admitted for 1/4 th share of profits which he
acquired equally from A and B. C brings ₹30,000 as goodwill, it will be credited to old partners as: 1
(a) ₹15,000 each
(b) ₹20,000, ₹10,000 respectively
(c) ₹10,000, ₹20,000 respectively
(d) None of these

3. A and B are sharing profits and losses in the ratio of 4 : 1. C is admitted as a new partner for 1/3rd share
of profits for which he pays ₹3,00,000 as goodwill. If A and B agree to share future profits equally, then
the amount of goodwill to be credited to A is: 1
(a) ₹3,00,000
(b) ₹9,00,000
(c) ₹4,80,000
(d) ₹4,20,000

4. On admission of a new partner, the revaluation profit/loss is transferred to: 1

(a) All partners in new ratio
(b) Old partners in sacrificing ratio
(c) Old partners in old ratio
(d) None of these

5. If at the time of admission of a new partner, there is some unrecorded liability, it will be transferred to:
1
(a) Capital accounts of old partners (b) Capital accounts of all partners
(c) Goodwill account (d) Revaluation account

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 6. Revaluation account is prepared to find out the profit or loss on: 1
(a) Sale of fixed assets
(b) Revaluation of assets and liabilities
(c) Sale of goods
(d) Sale of services

7. X and Y are partners sharing profits in the ratio 3 : 2. C is admitted for 1/5th share of profit. He is to
bring proportionate capital in the firm. The capitals of X and Y after all adjustments are: X ₹2,00,000
and Y ₹1,60,000. C’s capital will be: 1
(a) ₹72,000 (b) ₹60,000
(c) ₹90,000 (d) ₹82,000

8. A and B are partners sharing profits in the ratio 7 : 3. C is admitted for 1/4th share. He brought ₹2,50,000
as capital. The capital of remaining partners is to be made proportionate to profit sharing ratio on the
basis of C’s Capital. A and B’s Capital will be: 1
(a) ₹7,00,000 and ₹3,00,000 (b) ₹5,25,000 and ₹2,25,000
(c) ₹6,00,000 and ₹3,50,000 (d) ₹7,50,000 and ₹3,50,000

9. (Premium for Goodwill is paid in cash) A and B are partners in a firm sharing profits and losses in the
ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings ₹30,000 as capital and ₹10,000
as goodwill. At the time of admission of C, goodwill appears in the balance sheet of A and B at ₹3,000.
New profit sharing of the partners shall be 5 : 3 : 2. Pass necessary entries in the books of new firm. 3

10. (Partly Premium for Goodwill is paid in cash) A and B are partners in a firm sharing profits in the ratio
of 5 : 3. They admit C into the partnership for 3/10th share in profits, which he takes 2/10th from A and
1/10th from B. C brings in ₹3,000 as premium in cash out of his share of ₹7,800. Goodwill account does
not appear in the books of A and B. Give the necessary journal entries in the books of the new firm. 3

11. (Premium for Goodwill is paid in Kind) L and M are partners in a firm sharing profits in the ratio of
3:1. They admitted O as a new partner. L surrender 1/4 of his share and M surrender 1/3 of his share in
favour of O. O brought the following assets towards his share of capital and goodwill: Stock ₹40,000,
Debtors 60,000, Land 1,00,000, Plant 60,000. The goodwill of the firm was valued at 4,80,000.
Record the necessary journal entries for the same. 3

12. Asha and Aditi are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit Raghav
as a partner for th 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 to be valued at two years’ purchase of average profits of the
last four years. The profits of the firm during the last four years are given below :

2019-20
2020-21
2021-22
2022-23

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 The following additional information is given:
(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 31.3.2023 was overvalued by 15,000.

Pass necessary journal entries on Raghav’s admission showing the working notes clearly. 4

13. (Hidden Goodwill) Karan and Varun were partners in a firm sharing profits and losses in the ratio of
1 : 2. Their fixed capitals were 2,00,000 and 3,00,000 respectively. On 1st April, 2022 Kishore was
admitted as a new partner for 1/4th share in the profits. Kishore brought 2,00,000 for his capital which
was to be kept fixed like the capitals of Karan and Varun. Kishore acquired his share of profit from
Varun.

Calculate goodwill of the firm on Kishore’s admission and the new profit sharing ratio of Karan, Varun
and Kishore. Also, pass necessary Journal entry for the treatment of Goodwill on Kishore’s admission
considering that Kishore did not bring his share of goodwill premium in cash. 4

14. G, S and T are partners in a firm sharing profits in the ratio of [Link]. On March 31, 2023, they decided to
admit W as a new partner with 1/6th share of profits. On that date the book of the firm shows following
balances:
(i) General reserve 30,000
(ii) Profit & Loss Account 12,000 ( Dr. balance)
(iii) Contingency Reserve 18,000

Record necessary journal entries in the books of the firm on W’s admission. 4

15. P and Q are partners in a firm sharing profits and losses in the ratio of 4:1, decided to take R as a partner
for 1/5th share with effect from 1st April, 2023. Workmens’ Compensation Reserve was appeared in the
balance sheet on that date with 60,000. Show the accounting treatment of workmens’ compensation
reserve in each of the following alternative cases:
Case 1. If no information of claim is given.
Case 2. If there is no claim.
Case 3. If a claim on account of workmens’ compensation is estimated by 30,000.
Case 4. If a claim on account of workmens’ compensation is estimated by 60,000.
Case 5. If a claim on account of workmens’ compensation is estimated by 75,000. 6

16. A, B and C sharing profits and losses in the ratio of [Link]. D was admitted as a new partner with 1/5th
share in profit in the firm on 31-03-2023. An extract of their Balance Sheet as at 31st March, 2023 was
as follows:

Show the accounting treatment investment fluctuation fund in each of the following alternative cases:
Case 1. If there is no other information.

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 Case 2. If the market value of investments is 3,00,000.
Case 3. If the market value of investments is 2,60,000.
Case 4. If the market value of investments is 2,00,000.
Case 5. If the market value of investments is 3,50,000. 6

17. Give the necessary journal entries in the books of the firm on admission of a partner:-
(i) Land is to be decreased to 55,000 (Book value of land 70,000)
(ii) Out of the Insurance premium which was debited to Profit & Loss A/c 2,000 to be carried forward
to the next year.
(iii) A creditor of 7,000 is not likely to be claimed and hence are to be written back.
(iv) Provision for bad debts is in excess by 1,200.
(v) Outstanding bills for repairs 1,000 will be provided for.
(vi) Building is to be reduced by 20,000 (Book value 1,00,000) 6

18. Give the necessary journal entries in the books of the firm on admission of a partner:-
(i) A Provision of 5% is to be created for doubtful debts on debtors which were 34,000.
(ii) Debtors and provision for debtors appeared at 40,000 and 2,000 respectively, all debtors are now
considered good.
(iii) Patents were valueless (Book value of patents 5,000)
(iv) Unrecorded liability for creditors is fixed 6,000.
(v) A claim for damages of 20,000 was settled for 16,000.
(vi) A typewriter written off completely was taken by a partner for 4,000. 6

19. X and Y were partners in a firm sharing profits in the ratio of 3 : 2. On 31.3.2023 their Balance Sheet
was as follows:

On the above date, Z was admitted as a new partner in the firm for 1/4th share in the profits on the
following terms :
(i) Z will bring 1,20,000 for his capital and 20,000 for his share as premium for goodwill.
(ii) Machinery was to be depreciated by 10% and Land and Building was to be appreciated by 30,000.
(iii) Stock was overvalued by 20,000.
(iv) A provision of 5% was to be created for doubtful debts.
(v) Salary outstanding was 5,000.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm. 6
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 20. Given below is the Balance Sheet of Krishna and Suresh who are partners in a firm sharing profits in the
ratio of 3 : 2.

On that date, Mohan is admitted as a partner for 1/5th share on the following terms :
(i) He is to contribute 14,000 as his share of capital which includes his share of premium for goodwill.
(ii) Goodwill is valued at 2 years’ purchase the average profits of the last 4 years, which were 10,000;
9,000; 8,000 and 13,000 respectively.
(iii) Plant to be written down to 25,000 and patents written up by 8,000.
(iv) Unrecorded investment 7,000 is to be brought into books

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm. 6

21. 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 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 80,000, Qumar 30,000 and Roopa 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. 6

22. A and B are partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March,
2023 stood as under :

On that date they admitted C into partnership for 1/4th share in the profit on the following terms:

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 (i) C brings capital proportionate to his share. He brings 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 1,000 will be brought in books.
(v) Half of the investments were to be taken over by A and B 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 C into
the partnership. 6

23. Chander and Damini were partners in a firm sharing profits and losses equally. On 31st March, 2023
their Balance Sheet was as follows:
2023

1
On 1.4.2023, they admitted Elina as a new partner for rd share in the profits on the following  conditions:
3
(i) Elina will bring 3,00,000 as her capital and 50,000 as her share of goodwill premium, half of
which will be withdrawn 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 against the firm for damages, a liability to the extent of 8,000 will be created
for the same.

Prepare Revaluation Account and Partners’ Capital Accounts. 6

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 24. A and B are partners sharing profits and losses in the ratio of 3 : 2. On 31st March, 2023, their Balance
Sheet was as follows :

C was admitted on the following terms :

(i) C is to bring capital 40,000 and goodwill 15,000.
(ii) Partners agreed to share the future profits in the ratio of 5 : 3 : 2.
(iii) Investments will be appreciated by 20% and furniture depreciated by 10%.
(iv) One customer who owed the firm 2,000 becomes insolvent and nothing could be realized from
him.
(v) Creditors will be written back by 2,000.
(vi) Outstanding bills for repairs 1,000 will be provided for.
(vii) Interest accrued on investments 2,000.
(viii) Capital of the partners shall be in proportion to their profit sharing ratio. For this adjustments to be
made through cash.

Prepare Revaluation account, Partners’ Capital Account and the Balance Sheet of the firm after C’s
admission. 6

25. A and B were partners in a firm sharing profits equally. They admitted C as a new partner for 1/6th share
in the profits. The Balance Sheet of A and B as at 31.03.2023 was as follows :

The other terms of agreement on C’s admission were as follows:

(i) C was to bring 12,000 for goodwill.
(ii) Building will be valued at 1,85,000 and machinery at 40,000.

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 (iii) A provision of 6% will be created on debtors for bad debts.
(iv) The market value of investment is 70,000.
(v) C was to bring in future cash as it would made his capital equal to 25% of the combined capital of
A and B after above revaluation and adjustments are carried out.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of A, B and C. 6

26. S and K are partners in a firm sharing profits and losses as S 75% and K 25%. R join the partnership on
1st April, 2023.
From the information given below, complete Revaluation Account, Partners’ Capital Accounts and
Balance Sheet. He agrees to pay the partners’ 20,000 by way of goodwill and introduces 1/2 of the
combined capital after adjustment.

6
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 CBSE SAMPLE PAPER 1 (2023-24)
ADMISSION OF A PARTNER
1. A & B are partners sharing profits and losses in the ratio of 3 : 2. C is admitted for ¼ and for which
₹ 30,000 and ₹ 10,000 are credited as a premium for goodwill to A and B respectively. The new profit-
sharing ratio of A : B : C will be: 1
(a) 3 : 2 : 1 (b) 12 : 8 : 5
(c) 9 : 6 : 5 (d) 33 : 27 : 20

2. X and Y are partners in a firm with capital of ₹ 18,000 and ₹ 20,000. Z brings ₹ 10,000 for his share
of goodwill and he is required to bring proportionate capital for 1/3rdshare in profits. The capital
contribution of Z will be: 1
(a) ₹ 24,000. (b) ₹ 19,000.\
(c) ₹ 12,667. (d) ₹ 14,000.

3. Rajinder and Vijay were partners in a firm sharing profits in the ratio 3 : 2. On 31st March 2023 their
balance sheet was as follows:

With an aim to expand business it is decided to admit Ranvijay as a partner on 1st April 2023 on
the following terms:
(a) Provision for doubtful debts is to be increased to 6% of debtors.
(b) An outstanding bill for repairs ₹ 50,000 to be accounted in the books.
(c) An unaccounted interest accrued of ₹ 7,500 be provided for.
(d) Investment were sold at book value.
(e) Half of stock was taken by Rajinder at ₹ 42,000 and remaining stock was also to be revalued at the
same rate.
(f) New profit-sharing ratio of partners will be 5 : 3 : 2.
(g) Ranvijay will bring ₹ 1,00,000 as capital and his share of goodwill which was valued at twice
the average profit of the last three years ended 31st March 2023, 2022 and 2021 were ₹ 1,50,000,
₹ 1,30,000 and ₹ 1,70,000 respectively. Pass necessary journal entries.

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 CBSE SAMPLE PAPER 2 (2023-24)
ADMISSION OF A PARTNER
1. Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts only when
money or money’s worth has been paid for it. At the time of admission, Vivaan, a new partner was
unable to bring in his share of goodwill in cash, so according to Accounting Standard-26 his: 1
(a) Current A/c will be credited (b) Current A/c will be debited
(c) Capital A/c will be debited (d) Capital A/c will be credited

2. David and Garry are partners in a firm with capitals of Rs. 90,000 and Rs. 80,000 respectively. Zenith
brings Rs.70,000 as his capital for 1/4th share in profits. Zenith’s share of goodwill will be: 1
(a) Rs. 34,000. (b) Rs. 29,000.
(c) Rs.10,000. (d) Rs.14,000.

3. On 31st March 2023 the Balance sheet of Zoya and Zara who were sharing profits and losses in the ratio
of 3:2 was as follows.

They decided to admit Sara for 1/5th share on 1st April, 2022 in the firm on the following terms:
(a) Goodwill of the firm is valued at Rs 28,000.
(b) Depreciate Plant and Machinery by 10%, appreciate Land and Building by 40%.
(c) The provision for doubtful debts was to be increased by Rs. 800.
(d) A liability of Rs. 1,000 included in the creditors is not likely to arise.
(e) New profit sharing ratio between Zoya, Zara and Sara shall be [Link] respectively.
(f) Sara was to contribute capital equal to 1/5th of the total capital of Zoya and Zara after all adjustments.

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

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