Assignment on Admission of a Partner

New Ratio and Sacrificing Ratio

Q1. A and B are partners sharing profits and losses in the ratio of 3:2. C is admitted for 1/4 th share. Find
the new profit sharing ratio of A,B and C.

Q2. F and Q sharing profits in the ratio of 7:3. They admit R for 1/4th share which he acquires from P and
Q in the profit sharing ratio. Compute the new profit sharing ratio.

Q3. A,B were partners sharing profits and losses in the ratio 3:2. C is admitted for 1/4 th share which he
acquires 1/8th from B, i.e. in equal proportion from old partners. Find the new profit sharing ratio.

Q4. A&B are partners sharing profits and losses in 4:3. C is admitted. A surrenders 1/4 th of his share &B
surrenders 1/3rd of his share in favor of C. find the new profit sharing ratio.

Q5. A and B were partners in the firm sharing profits and losses in the ratio of 5:3. They admitted C and D
as new partners. a surrendered ½ of his share in favor of C and B surrendered 1/2 of his share in favor
of D. calculate the new profit sharing ratio of A,B,C and D.

Q6. X & Y were sharing profits in the ratio of 5:2. Z is admitted to firm. X surrenders 1/5 th of his share
while Y surrenders 1/5th from his share. Find out new profit sharing ratio.

Q7. A and B share profit in the ratio of 5:3. They admitted C for 1/4th share which with C acquires from A
and B equally. Compute new profit sharing ratio.

Q8. A &B are partners sharing profits and losses in the ratio of 3:2. C is admitted for 1/4 th share which he
acquires in the ratio of 3:1 from the original partners. Calculate the new profit sharing ratio of A,B and
C.

Q9. A and B are the partners sharing profits and losses in the ratio of 3:2. C is entered for 1/5 th share in
profits. A&B decided to share future profits and losses in the ratio of 2:1. Find new profit sharing ratio
of the partners.

Q10. A and B were the partners sharing profits and losses in the ratio of 3:2. C is admitted for 1/4 th share
A&B decided to share future profits equally. Find the new profit sharing ratio.

Q11. X,Y and Z are partners sharing profits and losses in the ratio of 3:2:1. They admit A for 1/6 th share. Z
does not want to change his share & wants to retain his old share. Find out the new profit sharing
ratio.

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 Assignment on Admission of a Partner
Q12. A & B are partners sharing profits in 3:2. C is admitted for 1/5th share which he acquires entirely from
A. find out the new profit sharing ratio of A,B and C.

Q13. Suresh and Ramesh were the partners in a firm sharing profits in 5:3 ratio. On 1-4-2013 they
admitted Deepak as a new partner for 1/4th share. On 31st July, 2013 Karan was admitted as a new
partner for 1/6th share which he acquires equally from Suresh, Ramesh and Deepak. Calculate the new
profit sharing ratio of Suresh, Ramesh, Deepak and Karan.

Q14. (a) Lucky and Zeny were the partners in a firm sharing profits in 4:3 ratio. They admitted Allen as a
new partner for 20% of his share in the profits. Allen acquires his share of profits in the ratio of 1:2
from Lucky and Zeny. Calculate the new profit sharing ratio of Lucky, Zeny and Allen.

(b) A,B and C are the partners sharing profits in 3:2:2 ratio. They admitted D as a new partner for
1/5th share which he acquires from A,B and C in 2:2:1 ratio respectively. Calculate the new profit
sharing ratio.

Q15. Ram and Mohan were partners in a firm sharing profits in 3:2 ratio. They admitted Sita and Radha as
new partners. Ram sacrificed 1/3rd of his share in favor of Sita and Mohan sacrificed ½ his share in
favor of Radha. Calculate the new profit sharing ratio of Ram, Mohan, Sita and Radha.

Q16. A and B are partners sharing profits in the ratio of 4:1. A surrenders 1/4 th of his share and B
surrenders ½ of his share in favor of C, a new partner. What is the sacrificing ratio and new ratio?

Q17. K, L and M partners sharing in the ratio of 3:2:1. They admit N for 1/6th share. It is agreed that M
would retain his original share. Calculate the new ratio and sacrifice ratios.

When New Partner Brings His Share of Goodwill in cash

Q18. (when the new partners brings capital and his share of goodwill in cash and sacrificing shares are
already mentioned.) Bramha and Vishnu are the partners sharing profits and losses in the ratio 2:1.
They admitted Mahesh into partnership with 1/4th share in profits which he acquires 1/8th from
Bramha and 1/8th from Vishnu. Mahesh brings in RS 2,00,000 as capital and RS 60,000 as
goodwill(premium) in cash. Give journal entries in each of the following cases:

(A) When goodwill is retained in the business

(B) When half of the goodwill is withdrawal by old partners.

Q19. Heena and Sameer are the partners in a firm sharing profits in the ratio of 4:3. They admitted Ruby
into partnership for 1/3rd share. Ruby brought RS 1,00,000 for her capital and RS 63,000 for her share
of goodwill. On Ruby’s admission goodwill appeared in the books of the firm at RS 42,000. The new

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 Assignment on Admission of a Partner
profit sharing ratio of Heena, Sameer and Ruby will be equal. Record necessary journal entries on
Ruby’s admission.

Q20. Saluja and Piyush are partners sharing profits in the ratio of 7:3. They admit Kashish as a new partner
paying RS 4,000 as premium for 1/5th share. Goodwill already appears in the books are RS 20,000.
The new ratio beings 5:3:2. Pass necessary journal entries.

Q21. (when sacrifice ratio of one of the old partners comes out to be negative) A and B are partners
sharing profits in 3:1. C is admitted for 1/3rd share and brings RS 20,000 as goodwill. A and B decides
to share future profits equally. Pass necessary journal entry for recording goodwill.

Q22. Black and White are partners in a firm sharing profits in the ratio of 4:1. One 1 st April 2014, they
admitted Yellow for 1/3rd share in profit. New profit sharing ratio between Black, White and Yellow is
1:1:1. Yellow brought RS 1,00,000 as capital and RS 30,000 as premium (goodwill) give journal entries
to record above (show your workings clearly)

When Goodwill is withdrawn by old partners

Q23. A, b and C are partners sharing profits in the ratio of 3:2:1. On D’s admission profit sharing ratio is
changed to 3:3:2:2. Goodwill of the firm is valued at RS 1,50,000. D brings his share in goodwill in
cash of which 60% is withdrawal by old partners leaving rest to be used for expansion of the
business. Give necessary journal entries.

Q24. A and B partners in a firm, sharing profits and losses in the ratio of 3:2. Their capital are RS 1,80,000
and RS 1,40,000 respectively. They admit X in partnership on the condition that he will bring RS
67,000 as goodwill and RS 1,50,000 as capital and will get 1/4 th share in the profits of the firm.
Assuming that the capital and goodwill have been brought in cash by the new partner, pass the
necessary journal entries and find out new profit sharing ratio of partners when (A) goodwill is
retained in the firm and (B) goodwill is withdrawn by old partners.

Q25. Ram and Shyam are partners. Their profit-sharing ratio is 3:2. Mohan joins the partnership for 1/4 th
share in profits(of which he acquires 2/3rd from ram and 1/3rd from Shyam). Mohan brings in RS
60,00,000 for capital and RS 2,40,000 for goodwill. 1/4th of the amount of goodwill is withdrawal by
old partners. Pass the journal entries.

Q26. (a) A and B are partners in a firm sharing profits in the ratio of 3:2. C is admitted as a partner. A and B
surrender 1/2 of their respectively share in favor of C. find the new profit sharing ratio and also
the sacrificing ratio.

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 Assignment on Admission of a Partner
(b) C is to bring his share of premium for goodwill in cash. The goodwill of the firm is estimated at RS
4,00,000. Pass the necessary entries for the record of goodwill in the above case.

Q27. A and B are partners sharing profits in the ratio of 3:1. On 1 st April 2001, they admit C into
partnership for 1/5th share who pays RS 50,000 as premium privately. On 1st April 2002, they admit D
into partnership for 1/6th share who brings RS 40,000 as premium 75% of which is withdrawn by the
existing partners. On 1st April 2003, E is admitted as a partner for 1/7th share who brings RS 60,000 as
premium which is retained in the business.

Goodwill bought in Kind

Q28. A and B are partners in a firm sharing profits in the ratio of 7:5. On April 1, 2004 they admit C as a
new partner for 1/6th share. The new ratio will be 13:7:4. C contributed the following assets towards
his capital and for his share of goodwill: stock RS 60,000; Debtors RS 80,000; Land RS 2,00,000; plant
and Machinery RS 1,20,000. On the date of admission of C, the goodwill of the firm was valued at RS
7,50,000. Recorded necessary journal entries in the books of the firm on C’s admission and prepare
C’s capital account.

Q29. Rohit and Sohit are partners in a firm sharing profits in the ratio of 3:2. They admit Mohit as a new
partner for 3/13 share in profits. the new ratio will be 5:5:3. Mohit contributed the following assets
towards her capital and her share of goodwill. Inventory RS 50,000; plant and machinery RS 1,50,000;
debtors RS 50,000; land RS 2,70,000. On the date of admission of Mohit the goodwill of the firm was
valued at RS 10,40,000. Record necessary journal entries in the books of firm.

Q30. (B)Ram and Rahim are partners in a firm sharing profits in the ratio of 3:2.on April 1,2004 they admit
Raj as a new partner for 3/13th share in the profits. The new ratio will be 5:5:3. Raj contributed the
following assets towards his capital and for his share of goodwill; Land 2,50,000; Plant & machinery
1,50,000 stock; 80,000 and debtor 70,000. On the date of admission of Raj, the goodwill of the firm
was valued at RS 5,20,000. Recorded necessary journal entries in the books of firm.

[ANS- premium for goodwill RS 1,20,000 will be credited to Ram and Rahim in the sacrifice ratio of
14:1]

Q30. (B) P and S are partners sharing profits in the ratio of 3:2. Their books showed goodwill at RS 20,000,
R is admitted with 1/5th share which he acquires equally from P and S. R brings RS 20,000 as his
capital and RS 10,000 as his share of goodwill. Profits at the end of the year were amount of RS
1,00,000. You are required to give journal entries to carry out the above arrangement

[ANS- NR 5:3:2.]

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 Assignment on Admission of a Partner
When New Partner is not able to bring goodwill in cash

Q31. Ram and Laxman are partners sharing profits in the ratio of 3:2. They admit Bharat into partnership
with 1/4th share in future profits. the new profit-sharing ratio is 5:4:3. Bharat brings into the business
RS 2,00,000 for his capital and he was unable to bring his share of goodwill out of the total goodwill
of the firm i.e. RS 1,92,000. Give the necessary journal entries to record.

Q32. Armaan and Raj Aryan are partners sharing profits in the ratio of 3:2. They admitted Jaspal into the
firm for 1/4th share in profits which he takes 1/6th from Arman and ½ from Raj Aryann. Jaspal brings
RS 20,000 as goodwill out of his share of RS 30,000. No goodwill A/c appears in the books of firm.
Pass the necessary journal entries.

Q33. A and B are partners sharing profits equally. They admit C into partnership. C paying only RS 1,000 for
premium out of his share of premium RS 1,800 for 1/4 th share of profits. goodwill account appears in
the books at RS 6,000. All the partners have decided that goodwill should not appear in the new
firm’s books. Give the necessary journal entries.

Q34. Tilly and Silly are partners. They share profits in the ratio of 5:3. They admitted Milly for 1/5 th share.
Milly brings RS 42,000 as capital but he is unable to bring any cash for goodwill. Value of firm’s
goodwill was agreed at RS 24,000. Show the necessary journal entries.

[ANS- Milly’s share of goodwill RS 48,000, Milly’s share of goodwill be credited to Tilly and Silly in
sacrificing ratio.]

Q35. A and B share profits in the ratio of 5:3. They admitted C as partner for 1/5 th share. C brings RS 45,000
as his capital. His share in goodwill is RS 12,600 but he brings only 10,000 as goodwill. Half amount of
goodwill is withdrawn by an old partner. Pass the necessary journal entries.

[ANS- C’s capital A/c will be debited within 2,600]

Q36. X and Y are partners in a firm sharing profits in the ratio 5:3. On march 1, 2014 they admitted Z, their
manager for the past ten years, as a new partner. The new profit ratio is 4:3:2. Z brought in RS
1,00,000 in cash as his share of capital but could not bring any amount for goodwill in cash. The firm’s
goodwill on Z’s admission was valued at RS 1,80,000. X and Y decided that Z can bring his share of
premium for goodwill later or it can e adjusted against his share of profits. at the time of Z’s
admission goodwill existed in the books of the firm at RS 2,40,000.

You are required to (i) pass the necessary journal entries in the books of the firm on Z’s admission.
(ii) identify the value fulfilled by X and Y.

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 Assignment on Admission of a Partner
Q37. A and B are partners sharing profits in the ratio of 3:2. They admitted C into the firm for 1/4th share in
profit which takes 1/6th from A and 1/12th share from B. c brings RS 50,000as goodwill out of his
share of RS 90,000. No goodwill account appears in the firm books of the firm. Pass the necessary
journal entries to record this arrangement.

Q38. A and B are partners sharing profits and losses in the ratio of 4:1. They admitted C into the
partnership for 1/6th share for which he pays RS20,000 for goodwill. A,B and C decide to share future
profits in the ratio of 3:2:1 respectively. Give the necessary journal entries.

Q39. Hari, Ravi and Kavi were partners in a firm sharing profits in the ratio of 3:2:1. They admitted Guru as
a new partner for 1/7th share in the profits. the new profit sharing ratio is 2:2:2:1 respectively. Guru
brought RS 3,00,000 for his capital and RS 45,000 for his 1/7 th share of goodwill. Show your working
notes clearly. Pass the necessary journal entries in the books of the firm for the above mentioned
transactions.

Q40. E and F were partners in a firm sharing profits in the ratio of 3:1. They admitted G as new partner on
1-3-2005 for 1/3rd share. It was decided that E,F and G will share future profits equally. G brought RS
50,000 in cash and machinery worth RS 70,000 for his share of profit as premium for goodwill.
Showing your calculations clearly pass the necessary journal entries in the books of the firm.

Q41. P,Q and R share profits in the ratio of 5:3:2. S was admitted into partnership. S brings in RS 30,000 as
his capital. S is entitled for 1/5th share in profits which he acquires equally from P,Q and R. goodwill
of the firm is to be valued at three years purchase of last four years average profits. the profits of the
last four years are RS 32,000, RS 38,000, RS 31,000 respectively. S cannot bring goodwill in cash.
Goodwill already appears in the books at RS 50,000. Give the journal entries.

REVALUTION A/c, PARTNER’S CAPITAL A/c & BALANCE SHEET

Q42. Z and Y are partners sharing profits and losses in the ratio of 2:1. Their balance sheet as a at 31st
march, 2014 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals X 50,000 Building 25,000
Y 30,000 80,000 Machinery 25,000
Generals reserve 7,000 Investments 10,000
Profit and loss accounts 8,000 furniture 18,000
Creditors 30,000 stock 41,000
Bank loan 20,000 debtor 21,000
cash 5,000
1,45,000 1,45,000

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 Assignment on Admission of a Partner

On 1st April 2014, Z was admitted as a partner on the following terms:

1. He will bring RS 36,000 as capital and RS 12,000 as goodwill for his 1/4th share in profits.
2. Value of building will be appreciated by RS 10,000
3. Stock and furniture will be depreciated by 10%
4. A provision for bad debts @5% will be made on debtors
5. An unrecorded typewriter worth RS 4,000 to be taken in firm’s book
6. Partners will withdrawal half of the amount of goodwill.
Pass the necessary journal entries, prepare revaluation account and partner’s capital accounts and
balance sheet after admission.

Q43. Following is the balance sheet of Neha and Priyanka who share profits in the ratio of 3:1 as on 30 th
June, 2014.

Liabilities Amount Assets Amount

Capitals Goodwill 10,000
Neha 55,000 Premises 21,000
Priyanka 20,000 75,000 Other fixed assets 28,000
Bills payable 8,000 Stock 24,000
Creditors 40,000 Debtors 35,000
Neha’S loan 10,000 Bills receivables 7,000
Cash 5,000
Profit and loss 3,000
1,33,000 1,33,000
st
On 1 July 2014, Turin is admitted to partnership on the following terms:

1. Turing will bring 25,000 as his capital for 1/5th share in firm’s profit which he takes from old
partners in the ratio 3:2. Turin is unable to bring any cash for the goodwill. Firm’s goodwill was
valued at 32,000
2. A prov. of 5% to be created for doubtful debts on debtors and bills receivables
3. Premises to be app. By 4,000
4. Stock to be app. To 27,000
5. Other fixed assets were to be dep. By 10%
6. Neha’s loan to be paid off

Pass the necessary journal entries; prepare revaluation account, capitals account and the balance
sheet on that date.

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 Assignment on Admission of a Partner

Q44. The balance sheet of Akash and Prakash who share profits in proportions three-fifth and two-fifth
stood as under 31st December ,2013:

Liabilities Amount Assets Amount

Capitals Akash 70,000 Building 50,000
Prakash 50,000 Machinery 30,000
Workmen compensation fund 10,000 Car 13,000
Provident fund 5,600 Investments 28,000
Creditors 44,400 Stock 50,000
Bills payables 13,000 Debtors 20,000
(-) prov. For bad debts 100 19,900
Cash at bank 2,000
Petty cash 100
1,93,000 1,93,000
On 1 January 2014 Vikas is admitted for 1/5th share on the followings terms:
st

1. Vikas will bring 30,000 as capital and 20,000 as goodwill which will be withdrawn by old
[partners
2. Prov. for bad debts to be increased to 800
3. Car is taken over by Akash at book-value
4. Investments were sold for 30,000
5. Building to be appreciated by 10%
6. An outstanding bill of 1,500 for repairs to be brought in books
7. There was a liability of 2,000 for workmen compensation

Pass the necessary journal entries; prepare capital account and also the balance sheet.

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 Assignment on Admission of a Partner
Q45. Garima and Neelu are partners. They share profits in the ratio of 7:3. Their balance sheet as
on 31st march 2014 is as follows:

Liabilities Amount Assets Amount

Capitals Land and building 45,000
Garima 60,000 vehicle 15,000
Neelu 30,000 90,000 Fittings 6,500
Current account Investments 26,000
Garima 7,500 Stock 22,000
Neelu 4,000 11,500 Debtors 6,000
Reserve funds 20,000 Cash at bank 28,000
Employees provident funds 7,000 Cash at hand 4,500
Bills payable 10,000
Creditors 15,000
1,53,500 1,53,500
st th
On 1 April 2014 Nidhi is admitted for 1/6 share which she takes equally from garima and Neetu.
Other terms are :

1. Nidhi will bring 25,000 for capital and 10,000 for goodwill out of her share of 12,000 in goodwill
2. Outstanding salaries not shown in the books 1,000
3. Prepaid rent amounting to 400 not shown in books
4. 500 to be written off as bad debts and a prov. for the bad debts is to be made @10% on
debtors
5. Vehicles to be reduced to 10,000
6. Investments market values 28,000 and it was decided to show them at market value

Pass the necessary journal entries prepare the revaluation account partner’s capital account
current account and the balance sheet on that date.

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 Assignment on Admission of a Partner
Q46. A and B sharing profits in the ratio of 5:3 admit C as a partner with 1/3rd share in the profits. She has
to contribute RS 30,000 as her capital. The balance sheet of A and B before admission:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 25,000 Goodwill 20,000
Bills payables 20,000 Land and building 28,000
General reserve 26,000 Stock 35,000
Capitals Debtors 25,000
A 55,000 Less. Prov. 2,500 22,500
B 45,000 1,00,000 Investments 25,000
Cash 5,500
Plant and Machinery 35,000

1,71,000 1,71,000

1. C brings RS 8,000 in cash as premium for goodwill

2. Land and building were to be valued at RS 38,000 and plant and machinery at RS 45,000
3. Provision for bad debts was found to be in excess by RS 800
4. A liability for RS 3,200 included in creditors is not likely to arise
5. RS 16,000 of investment were to be taken over by A and B in their capital ratio.
Prepare revaluation account, partners’ capital account cash account and balance sheet of new
firm

Q.47) A and B are partners in a firm sharing profits as 7:3. The balance sheet is as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 11,800 Bank 11,500
Workmencompensation funds 11,200 Bills receivables 12,500
General reserve 12,100 Debtors 14,000
Capitals A 16,000 Less. Prov. 500 13,500
B 14,900 30,900 stock 13,000
Investments 15,000
goodwill 1,000
66,000 66,000

C is admitted for 2/9 share in profits on these terms:

1. Outstanding income not appearing in the books is Rs.200. market value of investment is
Rs.14,500
2. Claim on account of workmen compensation fund is estimated at Rs.9750

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 Assignment on Admission of a Partner
3. Madhu, an old customer, whose account is written off as bad has promised to pay Rs.850 in full
settlement of her debt
4. C brings Rs.18,000 as capital and Rs.3,000 as goodwill. While his share of goodwill was
calculated as Rs.4,200
Prepare necessary ledger accounts and draft a Balance Sheet.

Q48. Given below is the balance sheet of A and B, who are carrying on partnership business as on march
31, 2014. A and B share profits in the ratio of 2:1:

Liabilities Amount ASSETS Amount

Bills payables 10,000 Cash in hand 10,000
Sundry creditors 58,000 Cash at bank 40,000
Outstanding expense 2,000 Sundry debtors 60,000
Capitals Stock 40,000
A 1,80,000 Plant and machinery 1,00,000
B 1,50,000 3,30,000 Building 1,50,000

4,00,000 4,00,000
C is admitted as a partner on the date of the balance sheet on the following terms :

1. C will bring RS 1,00,000 as his capital and RS 60,000 as his share of goodwill for 1/4 th share in
profits
2. Plant is to be appreciated to RS 1,20,000 and the value of building is to be appreciated by 10%
3. Stock is found overvalued by RS 4,000
4. A provision for doubtful debts is to be created at 5% of debts
5. Creditors were unrecorded to the extent of RS 1,000
Record revaluation account partners account and the balance sheet of the constituted firm after
admission of the new partner.
[ANS- RP 27,000; Cap: A 2,38,000; B 1,79,000 and C 1,00,000 B/S total 5,88,000]

Q49. M and N are partners in a firm sharing profits and losses in the ratio of 5:3. On 31 st march 2014 their
balance sheet was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals M 12,000 Machinery 12,000
N 10,000 22,000 Stock 8,000
M, loan 1,000 Sundry debtors 7,200
Bills payable 2,000 Bank balance 500
Sundry creditors 3,000 Cash in hand 300

28,000 28,000

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 Assignment on Admission of a Partner
On the above date, the partners decide to admit R as partner on the following terms:

1. The new profit sharing ratio of M,N and R is 7:5:4 respectively

2. R shall bring RS 8000 as his capital and RS 4000 for his share of goodwill
3. M and N will draw half of the goodwill in cash
4. Machinery is to be valued at RS 15,000, stock 10,000 and a provision for bad debts RS 1000 is to
be created
5. There is a liability of 2000 being the outstanding salary payable to employees of the firm. This
liability is not included in the creditors. Partners decided to show this liabilities in the books of
accounts of the new firm
6. M’s loan was paid off along with interest of 200
Prepare revaluation account, partners account and the balance sheet of M,N and R.
[ANS- revolutionary profit 1,800, capitals M 14,625, N 11,175, R 8,000, total balance sheet RS
40,800]

Q50. A and B are equal partners in a firm. They decided to admit C as a new partner and to readjust the
balance sheet values for this purpose. The balance sheet of A and B on 31 st march 2014 was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 1,00,000 Cash 60,000
Bills payables 1,00,000 debtors 1,50,000
A;s account 1,70,000 Stock 1,40,000
B;s account 1,20,000 Furniture 40,000
Machinery 1,00,000

4,90,000 4,90,000

The following adjustments were to be made before C’s admission:

1. Furniture was valued at RS 25,000
2. Investment worth RS 40,000(not mentioned in the balance sheet) was to be taken into account
3. C brings RS 1,00,000 for capital and 1,00,000 for goodwill which sum A and B withdraw in their
due proportion
4. 40% of creditors were paid off at 3% discount.

Pass the journal entries in the above transactions and give the balance sheet of A,B and C

[ANS- revaluation loss= 38,00; capitals: A 1,68,100, B: 1,18,100, C:1,00,000: total balance sheet is
5,46,200]

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 Assignment on Admission of a Partner
Q51. The following was the balance sheet of A and B who were sharing profits in the ratio of 2:1. On 31 st
march 2014:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 30,000 Building 50,000
B 20,000 50,000 Plant and machinery 35,000
General reserve 30,000 Stock 20,000
Bank loan 20,000 Sundry debtors 9,700
Sundry creditors 45,900 Cash in hand 1,200
Cash at bank 30,000
1,45,900 1,45,900

On this date C is admitted into the partnership on the following terms:

1. C was bring in RS 15,000 as his capital and RS 6,000 as goodwill for one-fourth share in the firm
2. That the value of stock and plant and machinery were to be reduced by 5%
3. That a reserve was to be created in respect of sundry debtors at RS 750
4. That the building account was to be appreciated by 10%
5. That goodwill money was to be retained in the business
6. General reserved is to be maintained at RS 20,000 in new firm’s books
7. Bank loan to be paid off
Prepare profit and loss adjustment account, Partners capital account and Balance sheet of the new
firm.
[ANS- revaluation profit 1,500; capitals A: 45,000, B: 27,500, C: 10,000; total balance sheet
1,48,400]

Q52. Ram and Rahim share profits in the ratio of 3:1. Their balance sheet as on 31 st march 2014 stood as
under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals : Ram 45,000 Plant and machinery 25,600
Rahim 24,000 69,000 Furniture 14,800
Reserve fund 5,000 Investments 7,999
Workmen compensation 4,000 Stock 40,700
Workmen profit-sharing Fund 6,000 Debtors 24,300
Creditors 10,000 Bills receivables 5,000
Bank overdraft 19,300 Cash 2,501
Bills payables 7,600

1,20,900 1,20,900

On 1st April 2014, they admit John for 1/4th share on the following terms:

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 Assignment on Admission of a Partner
1. John will bring 10,000 for goodwill and 25,000 for capital. Half goodwill will be withdraw by
partners
2. A provision @5% is to be made for doubtful debts on debtor and bills receivables
3. Market value of investments is 7,500 and it was decided to reduce investments to this value
4. Stock is to be appreciated by 2,150
You are required to pass journal entries and prepare revaluation account, capital account and
balance sheet of new firm.
[ANS- RP 186; capitals RAM: 55,640, RAHIM: 27,546, JOHN: 25,000; total of balance sheet is
1,51,086]

Q53. X and Y share profits in the ratio of 3:2. Their balance sheet as on 31 st march 2014 stood as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 20,400 Building 45,000
Bills payables 9,600 Plant 22,000
Bank overdraft 11,500 Patent 4,000
Capitals X 70,000 Stock 47,500
Y 50,000 1,20,000 Debtors 25,800
Workmen profit sharing fund 12,000 Cash 7,200
Goodwill 22,000
1,73,500 1,73,500
st
They took Z into partnership on 1 april 2014. Other terms and information are as under:

1. Z will bring 40,000 as his capital for 1/6th share. Profit sharing ratio of X and Y will not change
2. Z cannot bring goodwill in cash. Firm’s goodwill was valued t 36,000
3. Building is to be appreciated 50,000
4. Patent is to be reduced 1,500
5. Plant should be depreciated by 20%
6. A provision @10% should be made for doubtful debts
7. Bank overdraft should be paid off
Pass the necessary journal entries and prepare revaluation account, partner’s capital account and
balance sheet of new firm
[ANS- revaluation loss 3,480, total balance sheet 1,76,520]

Q54. Sita and Gita are carrying on business in partnership sharing profits and losses in the ratio 7:5. Their
balance sheet as on 31st march 2014 is as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals Sita 35,000 Plant and machinery 32,000
Gita 25,000 60,000 Investments 13,000

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 Assignment on Admission of a Partner
Current A/cs: Furniture 10,000
Sita 4,600 Stock 25,700
Gita 2,800 7,600 Debtors 19,200
Creditors 21,800 Cash in hand 1,100
Contingency 4,800
Provident fund 7,000
1,01,000 1,01,000
They admitted Neeta for 1/4th share which she took form Sita and Gita equally. Other terms were:

1. Neeta will bring 24,000 as capital and 7,000 for goodwill out of her share in goodwill 10,000
2. Outstanding rent 1,000 and prepaid insurance amounting to 400 are to be shown in the books
3. 200 will be written off as bad debts and a provision for bad debts @5% will be made on debtors
4. Investments value will be appreciated by 1,250

Pass necessary journal entries. Also prepare revaluation account, capital account and balance sheet
after admission. (HINT- raise goodwill on the basis of short goodwill 3,000*4/1 = 12,000)
[ANS- RL 500, total balance sheet 1,32,500 (provision for bad debts will be calculate on
19,000]

Q55. Rajeev and Sanjay share profits in the ratio of 5:3. Their balance sheet on 13st march 2013 stood as
follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals Rajeev 67,500 Plant 25,000
Sanjay 40,000 Furniture 12,700
Trade creditors 25,400 Stock 55,400
Bills payables 9,500 Sundry debtors 41,200
General reserve 6,000 Cash 6,100
Workmen fund 12,000 Goodwill 20,000
1,60,400 1,60,400

On this date, they admit Naresh for 1/4th share which he takes from them in the ratio 3:1. Other
terms were:
1. Naresh will bring 32,000 as his capital and his share in goodwill in cash. Goodwill was to be
valued at 2 ½ years purchase of average profit for the last 4 years. Profit for the last 4 years
were 20,500, 8,700, 21,600 and 26,000
2. A provision of 5% is to be made on debtors.
3. Plant’s value is to be increased by 5,000
4. Rajeev will withdraw 5,000 from his capital
5. There was a claim of 2,000 in respect of workmen compensation

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 Assignment on Admission of a Partner
Pass the necessary journal entries and prepare revaluation account, partner’s capital account and a
balance sheet. [ANS- RP 2,940, new ratio 7:5:4]

Q56. A and B are partner in a firm sharing profits and losses in the ratio of 3:2. On 1 st April, 2014, they
admitted C into partnership. He paid 50,000 as hi capital but nothing for goodwill which was valued
at 40,000for the time. He acquired 1/5th share in the profits, equally from both partners it was also
decided that:

1. Land and building be written off by 20,000

2. Inventory be written down by 3,200
3. A provision of 1,000to be created for doubtful debts; and
4. An amount of 1,200, included in sundry creditors, to be written back as it is no longer payable
5. Balance the general reserve is to be maintained

The balance sheet of A and B as on 31st march 2012 was as under :

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 86,000 Goodwill 10,000
B 64,000 1,50,000 Land and building 60,000
General reserve 20,000 Plant and machinery 70,000
Sundry creditors 31,200 Inventory 36,000
Sundry debtors 20,000
Cash at bank 4,000
Cash at hand 1,200

2,01,200 2,01,200

Prepare revaluation account, partner’s capital account and balance sheet of new firm.
[ANS- RL 23,000, capitals A: 72,200, B: 56,800, C: 38,000, total balance sheet is 2,17,000,, S.R. is 1:1]

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 Assignment on Admission of a Partner
Q57. A and B share profits in the ratio of 7:5. Their balance sheet as on 31 st march 2014 stood as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 65,000 Land and building 40,000
B 35,000 1,00,000 Machinery and furniture 30,000
General reserve 6,000 Patents and patterns 6,000
Provident funds 10,000 Investments 12,000
Workmen compensation 12,000 Scooter 7,000
Trade creditors 21,000 Debtors
Bills payables 8,400 30,000 29,400
(-) provident bad debts 28,600
600 4,400
Stock
Cash
1,57,400 1,57,400

On the above date C is admitted for 1/4th share. Other terms agreed upon:

1. C will bring 40,000 as capital and 18,000 for goodwill. Goodwill will be withdrawn by old
partners
2. Scooter is sold for 5,800
3. Land and buildings value will be increased by 6,000
4. Investments will be taken by B at book value
5. A liability for an outstanding repairs bill is to be created at 1,440
6. Provision for bad debts is to be brought upto 5% on debtors
7. Liability in respect of work men compensation was estimated at 3,000

Pass the necessary journal entries and prepare necessary accounts and the balance sheet after
admission.
[ANS- RP 2,460, new ratio 7:5:4, total balance sheet 1,89,300]

Q58. Surrender and Narender share profits and losses in the ratio of 3:2. On 1 st January, 2014, Mahender
was admitted who paid 30,000 cash and stock worth 10,000 for capital and 20,000 for goodwill for
1/6th share in future. Surrender and Narender withdrew half of the goodwill. The balance sheet of
Surender and Narender as on 31st December 2013 was as follows:

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 Assignment on Admission of a Partner

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 14,000 Cash 7,000
Bills payables 4,000 Stock 40,000
Capitals surrender 56,000 Sundry debtors 22,000
Narender 30,000 (-) prov. Bad debts 2,000 20,000
Furniture 7,000
Plant 10,000
Building 20,000
1,04,000 1,04,000
The assets and liabilities of the firm were revalued as under:

1. Stock at 36,000, furniture 8,000 plant 8,000 and building 24,000

2. Provision for doubtful debts is to be maintained at 10% of the debtors
3. A liabilities of 1,000 included in creditors was not likely to be paid
4. Immediately after admission a new machine was purchased for 60,000 for which 35,000 was
paid in cash and for balance firm accepted a bill for 2 months duration

Prepare revaluation account, partners capital accounts and balance sheet of the reconstituted firm.
[ANS- RL 200, capitals, Surender 61,880, Narender 33,920 and Mahender 40,000; balance sheet
1,78,800]

Q59. X and Y were partners in a firm sharing profits and losses in the ratio of 3:2. Their balance sheet as at
31st march 2009 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 42,000 Current assets 2,00,000
Employees provident fund 20,000 Investments 50,000
Contingency reserve 30,000 Furniture 20,000
P&L account 45,000 Machinery 90,000
Workmen compensation 18,000 Advertisement expenditure 20,000
Investments fluctuation 25,000
Capitals X 1,20,000
Y 80,000 2,00,000
3,80,000 3,80,000
st
They admit Z into partnership on 1 April, 2009 and the new profit sharing ratio is agreed at 2:1:1. It
estimated that:

1. Claim on account of workmen’s compensation is estimated 10,000

2. Market value of investment is 46,000

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 Assignment on Admission of a Partner

Give the necessary journal entries to adjust accumulated profit and loss .

Q60. X and Y are in a partnership sharing profit and losses in the ratio of 3:2. Their balance sheet as at 31 st
march 2012, was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 15,000 Cash 5,000
General reserve 12,000 Debtors 20,000
Capitals X 60,000 (-) prov. 800
Y 30,000 Patents 19,200
Current account Investments 14,800
X 10,000 Fixed assets 8,000
Y 2,000 Goodwill 72,000
10,000
1,29,000 1,29,000
st
They admitted Z on 1 April 2012 on the following term:

1. A prov. Of 5% is to be created on debtors

2. Accrued income of 1,500 does not appear in the books and 5,000 are outstanding for salaries
3. Present market value of investments is 6,000. X takes over the investments at this value
4. New profit sharing ratio of partners will be 4:3:2. Z will bring in 20,000as hiz capital
5. Z is to pay in cash an amount equal to his share in firm’s goodwill valued at twice the average
profits of the last 3 years which were 30,000, 26,000 and 25,000 respectively
6. Half the amount of goodwill is withdrawn by old partners

You are required to pass the journal entries, prepare revaluation A/c capital A/c current A/c and the
opening balance sheet of the new firm.

Q61.Murari and vohra were partners in a firm with capitals of 1,20,000 and 1,60,000 respectively. On
1.4.2010 they admitted Yadav as a partner for one-fourth share in the profits on his payment of
2,00,000 as his capital and 90,000 for his 1/4th share of goodwill.
On that day the creditor of murari and vohra were 60,000 and bank overdraft was 15,000.
Their assets apart from cash included stok 10,000; debtors 40,000; plant and machinery 80,000; land
and building 2,00,000. It was agreed that stock should be depreciated by 2,000; plant and machinery
by 20%, 5,000 should be written off as bad debts and land and building should be appreciated by
25%. Prepare revaluation account, capital account of murari, vohra and yadav and the balance sheet
of the new firm.

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 Assignment on Admission of a Partner
Q62. The following is the balance sheet at 31 st march 2010 Of A and B who are in partnership and share
profits and losses in the proportion of three-fifth and two-fifth respectively.

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 15,000 Free hold premises 10,000
Bills payables 4,310 Machinery and plant 4,500
Provision doubt full debts 4,000 Furniture 900
Capital account Stock 12,500
A 24,000 Debtors 22,500
B 9,000 33,000 Investments 4,250
Cash 1,660
56,310 56,310

They admit C into partnership from 1st April 2010. The terms of agreement are as under:
1. C bring in 6,000 as capital and 4,800 for goodwill in order to get two-seventh share in profit
2. 4,800 paid by C to be credited to the loan accounts of A and B in respectively proportions.
3. Freehold premises is undervalued by 5,000
4. Machinery and plant is overvalued by 500
5. Stock to be discounted at 10% and provision for doubtful debts be reduced by 1,000
6. Investments are to be brought down at their market price, it being 3,200.

Prepare journal entries, capital accounts and opening balance sheet. Also calculate the new ratio.
Q63. A and B are partners in a firm. Their balance sheet as at 31st march 2010 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Provision for doubtful debts 4,000 Cash 10,000
Workmen compensation 5,600 Sundry debtors 80,000
Outstanding express 3,000 Stock 20,000
Creditors 30,000 Fixed assets 38,600
Capitals A 50,000 P & L account 4,000
B 60,000
1,52,600 1,52,600

C was taken into partnership as from 1st April 2010. C brought 40,000 as his capital but he is unable
to bring any amount for goodwill. New profit sharing ratio is 3:2:1. Following terms were agreed
upon:

1. Claim on account of workmen’s compensation is 3,000

2. To write off bad debts amounting to 6,000

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 Assignment on Admission of a Partner
3. Creditors are to be paid 2,000 more
4. 2,000 be provided for an unforeseen liability
5. Outstanding expenses be brought down to 1,200
6. Goodwill is valued at 1 ½ year’s purchase of the average profits of last time years less 12,000.
Profits of 3 years amounted to 12,000; 18,000 and 30,000. Prepare journal entries, capital
account and opening balance sheet

Q64. A and B were in a partnership sharing profits in proportion of 4/7 and 3/7 respectively. Their balance
sheet as at 31st march, 2014 is as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 19,600 Cash at bank 10,000
Bills payable 9,000 debtor 40,000
Prov. For doubtful debts 1,800 Stock 60,400
C’s loan A/c 30,000 investments 10,000
Capitals A 50,000 goodwill 5,000
B 40,000 Plant 25,000
1,50,400 1,50,400
On 1st April 2014 C is admitted into partnership on the following terms:

1. The new profit-sharing ratio will be 3:2:1. Between A,B and C respectively
2. C’s loan should be treated as his capital
3. C is not to bring goodwill in cash. Goodwill Is valued on the basis of 2 years purchase of the
average of the last three years
4. Average profits of the last three years are 6,000
5. 7,000 of investments were to be taken over by A and B in their profit sharing ratio
6. Stock be reduced by 10%
7. Prov. For doubtful debts should be 5% on debtors and a provision for discount @2% should also
made on debtors
8. B is withdraw 8,000 in cash

Give journal entries to record the above and prepare the balance sheet of the new firm

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 Assignment on Admission of a Partner
Q65. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st march, 2009 their
balance sheet was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 70,000 Bank 40,000
Capitals Debtors 1,20,000
A 1,50,000 Stock 60,000
B 80,000 2,30,000 Furniture 50,000
Goodwill 30,000

3,00,000 3,00,000

On the above date C is admitted as a partner. A surrendered 1/6th share of his share and B 1/3rd of his
share in favour of C. goodwill is valued at 1,20,000. C brings in only ½ of his share of goodwill in cash
and 1,00,000 as his capital. Following adjustment are agreed upon:
1. Stock is to be reduced to 56,000 and furniture by 5,000
2. There is an unrecorded asset worth 20,000
3. One month’s rent of 15,000 is outstanding
4. A creditor for goods purchased for 10,000 had been omitted to be recorded although the goods
had been correctly included in stock
5. Insurance premium amounting to 8,000 was debited to P&L A/c of which 2,000 is related to the
period after 31st march 2009.

You are required to prepare revaluation account, partner’s account and the balance sheet of the new
firm profit sharing ratio.

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 Assignment on Admission of a Partner
Q66. A and B are partners in a firm. Their balance sheet as at 31 st march 2012 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 50,000 Cash 10,000
B 60,000 Sundry debtors 80,000
Creditors 15,000 Stock 20,000
Outstanding exp. 3,000 Fixed assets 38,600
Provident fund 1,000 P&L A/c 4,000
Insurance fund 7,000
Employees savings fund 5,000
Workmen profit sharing fund 2,000
Workmen compensation fund 5,600
Prov. Doubt full debts 4,000
1,52,600 1,52,600

C was taken into partnership as fro, 1-4-2012 on following terms for 1/6th share:

1. C will bring 40,000 as his capital

2. Goodwill is valued at 12,000 and admitting partner is unable to bring his share of goodwill in
cash
3. Claim an account of workmen’s compensation is 3,000
4. Creditors are to be paid 2,000 more
5. 2% prov. For discount on debtors is required

Prepare revaluation A/c, capital account and balance sheet

Q67. The balance sheet of A and B as at 31st march 2010 is given below:

LIABILITIES AMOUNT ASSETS AMOUNT

A’s capital 60,000 Freehold property 20,000
B’s capital 30,000 Furniture 6,000
General reserve 24,000 Stock 12,000
Creditors 16,000 Debtors 80,000
Cash 12,000

1,30,000 1,30,000

A and B share profits and losses in the ratio of 2:1. They agree to admit P into the firm subject to the
following terms and conditions:

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 Assignment on Admission of a Partner
1. P will bring in 21,000 of which 9,000 will be treated as his share of goodwill to be retained in
the business
2. P will entitled to 1/4th share of profits of the firm
3. 50% of the general reserve is to remain as a provision for bad and doubtful debts
4. Furniture is to be depreciated by 5%
5. Stock is to be revalued at 10,500

Prepare revaluation account, capital account and opening balance sheet of the new firm

[ANS- RL 1,800; capital A: 72,800, B: 36,400, P: 12,000; cash balance 33,000; B/S total 1,37,200]

Q68. A and B are partners sharing profit and losses in the ratio of 3:2. On April 1, 2012 their balance sheet
was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Sundry creditors 51,000 Goodwill 15,000
Workmen compensation 4,000 Plant 75,000
Capitals A 1,00,000 Patents 8,000
B 1,20,000 2,20,000 Stock 80,000
Debtors 62,000
Cash 20,000
P&L 15,000
2,75,000 2,75,000

On this date they admit C on the following terms:

1. C will be entitled to 3/10 share in the profits which he acquires 1/5 th from A and 1/10 from B.
he will bring in 60,000 as his capital
2. Goodwill of the firm was valued at 40,000. Partners decided to write off goodwill from the
books of firm
3. Plant is valued at 60,000 and stock at 70,000
4. Claim on account of workmen compensation is 6,000
5. Patents should be written off
6. Investment of 5,000 which did not appear in the books should be duly recorded
7. B is to be withdraw 20,000 in cash

Give the journal entries and the balance sheet of the new firm.

[ANS- RL 30,000, C’s current A/c (Dr.) 12,000; capitals A:72,000, B: 80,000and C: 60,000; B/S total
2,96,000; sacrificing ratio 2:1]

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 Assignment on Admission of a Partner

Q69. X and Y share profits as X 60% and Y 40%. The balance sheet of the firm as at April 1, 2012 was
follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Prov. For doubtful debts 3,000 Freehold premises 2,00,000
Creditors 39,000 Plant 1,00,000
Prov. fund 18,000 Furniture 16,000
Reserve funds 15,000 Prepaid exp. 4,000
Capitals X 2,50,000 Debtors 1,00,000
Y 1,50,000 4,00,000 Stock 40,000
Cash 5,000
Goodwill 10,000
4,75,000 4,75,000

On this date Z was admitted as a partner on the followings terms:

1. He was get 4/15th share of profits

2. He was to introduce 2,00,000 as capital and his share of goodwill in cash. Goodwill brought by Z
shall be withdrawn by X and Y
3. Goodwill shall be valued on the basis of 1 ½ years purchase of the average profits of the last
four years, which were :
2009 20,000 2011 15,000(loss)
2010 35,000 2012 40,000
4. It is further agreed that Y shall introduce additional capital of 40,000
5. Assets are to be revalued as: freehold premises 2,50,000; plant at 80,000; prepaid exp. NIL;
6. It is decided to write off bad debts amounting to 8,000
7. Creditors proved at 45,000, one bill for goods purchased having been omitted from the books.

Give the journal entries and ledger accounts to record the above and the balance sheet after Z’s
admission

[ANS- profit on revaluation 15,000; capitals X: 2,62,000; Y 1,98,000 and Z 2,00,000; cash balance
2,45,000 B/S total 7,23,000]

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 Assignment on Admission of a Partner

Hidden Goodwill

Q70. Abhay and Beena are partners in a firm. They admit Chetan as a partner with 1/4 th share in the profits
of the firm. Chetan brings 2,00,000 as his share of capital. The value of the total assets of the firm is
5,40,000 and outside liabilities are valued t 1,00,000 on that day. Give the necessary entry to record
goodwill at the time of Chetaan’s admission. Also show your working calculations.

Q71. Laxmi and Saraswati are partners in a firm sharing profits in the ratio 2:1. Their capitals were 1,00,000
and 80,000 respectively. They admitted Gayatri as a new partner of 1/5 th share in the future profits
with capital of 75,000 which was brought by her in cash. Calculate value of goodwill of the firm and
record necessary journal entries after Gayatri’s admission.

Q72. Balance sheet of X and Y sharing profits in the ratio of 5:3 as on 31 st march 2014 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

X capitals 70,000 Sundry fixed assets 80,000
Y capitals 50,000 Debtors 30,000
General reserve 26,000 Stock 50,000
Sundry creditors 34,000 Cash 14,000
P&L (Dr.) 6,000

1,80,000 1,80,000
th
Z is admitted for 1/5 share. C brings 40,000 as capital. Give the necessary entries for recording
goodwill only.

Q73. Rajesh and Ravi were partners sharing profits in the ratio of 3:2. Their balance sheet as at 31 st
December 2013 was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 38,500 Cash 2,000
Outstanding liabilities 4,000 Stock 15,000
Capitals Rajiv 29,000 Prepaid insurance 1,500
Ravi 15,000 44,000 Debtors 9,400
(-) prov. 400 9,000
Machinery 19,000
Buildings 35,000
Furniture 5,000
86,500 86,500

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 Assignment on Admission of a Partner
Raman is admitted as a new partner introducing a capital of 16,000. The new profit sharing ratio is
decided as 5:3:2. Raman is unable to bring in any cash for goodwill. Goodwill being calculated on
the basis of Raman’s share in the profits and the capital contributed by him. Following revaluations
are made:

1. Stock to depreciate by 5%
2. Prov. for doubtful debts is to be increased to 500
3. Furniture is to be dep. By 10%
4. Buildings are valued at 40,000

Show the necessary ledger accounts and the balance sheet of the new firm.

Q74. Daman and Raman are partners in a firm sharing profits and losses in the ratio of3:2. On 31 st march
2014 their balance sheet was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Sundry creditors 16,000 Cash in hand 1,200
Public deposits 61,000 Cash at bank 2,800
Bank overdraft 6,000 Stock 32,000
Outstanding liabilities 2,000 Prepaid insurance 1,000
General Reserve 8,000 Debtors 28,800
Daman 40,000 (-) prov. 8,00 28,000
Raman 40,000 80,000 Plant and machinery 48,000
Land and building 50,000
Furniture 10,000
1,73,000 1,73,000
On the above date, the partners decided to admit Aman as a partner on the following terms:

1. Aman shall bring 32,000 as his capital for 1/5th share in profits. but he is unable to bring any
cash in for goodwill. Partners, therefore decided to calculate goodwill on the bases of Aman’s
share in the profits and the capital contributed by him to the firm.
2. Plant and machinery is to be valued at 60,000; stock 40,000 and the provision for the doubtfull
debts is to be made 4,000. Value of land and building has appreciated by 20%. Furniture has
dep. By 10%
3. There is an additional liabilities of 8,000 being outstanding salary payable to employees of the
firm. This liability is not included in the outstanding liabilities, stated in the above balance
sheet. Partners decided to show this liability in the books of accounts of the reconstituted new
firm.
4. Partners decide to share future profits in 5:3:2 ratio.

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 Assignment on Admission of a Partner
Prepare revaluation account, partner’s capital account and new balance sheet

Q75. X and Y are partners. Their profit sharing ratio ids 3:2 and their capitals are 2,00,000 and 1,00,000
respectively. Z is admitted to 1/4th share in the profit which be brings 1,25,000 as capital. Revaluation
of assets and liabilities resulted in a loss of 60,000. General reserve appears at 40,000. Find out the
goodwill and pass the necessary journal entries.

[ANS- Hidden goodwill is 95,000]

Q76. A and B are share profit in the ratio of 3:1. On 1 st January, 2014 they admitted C for 1/5th share for
which he brought capital amounting to 80,000. Their balance sheet as at that dates was under:

LIABILITIES AMOUNT ASSETS AMOUNT

A’s capital 1,20,000 Fixed assets 1,50,000
B’s capital 80,000 Stock 80,000
reserve 40,000 Debtors 70,000
P&L 10,000 Bills receivables 20,000
Provident fund 30,000 Cash 30,000
Other liabilities 90,000 Add. Suspense account 20,000
3,70,000 3,70,000
ON ADMISSION:

1. Fixed assets were appreciated by 20%

2. Stock was decreased to 57,000
3. Prov. for bad debts required 5% on debtors
4. Advertisement suspense A/c to be written off

Pass the journal entries; prepare necessary accounts and a balance sheet. Goodwill is to be
calculated on the basis of C’s capital and his profit share.

[ANS- RP 3,500; hidden goodwill 86,500; balance sheet 4,33,500]

Q77. X and Y are partners with capital 13,00,000 and 20,00,000. They share profits in the ratio of 1:2. They
admit Z as a partner with 1/5th share in profits of the firm. Z bring 12,00,000 as his share of capital.
The new profit and loss account showed a credit balance of 6,00,000 as on the date of admission of
Z. give the necessary journal entries to record the goodwill.
[ANS- hidden goodwill is 9,00,000]

Q78. Asin and Shreya are partners in a firm. They admit Ajay as a new partner with 1/5 th share in the
profits of the firm. Ajay brings 5,00,000 as his share of capital. The value of the total assets of the

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 Assignment on Admission of a Partner
firm was 15,00,000 and outside liabilities were valued at 5,00,000 on that date. Give the necessary
journal entry to record goodwill at the time of Ajay’s admission. Also show your working calculation.

[ANS- hidden goodwill is 10,00,000; Ajay’s current account will be debited by 2,00,000 and capital
accounts of Asin and Shreya will be credited by 1,00,000 each]

Adjustment of Capitals

Q79. A and B are partners sharing profits in 3:2. Their capitals all adjustment are 1,00,000 and 75,000
respectively. They admit C as partner who brings 45,000 as capital for 1/5 th share of profit to be
acquire equally from both A and B. the capital accounts of old partners to be adjusted on the basis of
C’s capital and his profit share in business. Calculate the amount of actual cash to be brought in or paid
off by the old partners as the case may be.

Q80. A, B and C share profits in the ratio of 8:5:3. Their balance sheet as on 31 st march 2014 stood as
follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 55,000 Good will 12,000

B 29,400 Building 55,900
C 17,600 1,02,000 Furniture 15,300
Contingency reserve 8,000 Patents 4,000
Bank overdraft 15,300 Stock 32,000
Sundry creditors 24,600 Debtors 25,300
Cash 5,400

1,49,900 1,49,900
On 1 April 2014, they admit D for 1/5th share on the following terms:
st

1. D will bring 28,800 for his capital share and goodwill of the firm was valued at 21,600. No cash for
goodwill was brought in by D
2. Accrued commission of 800 for work done is to be brought in the books
3. 2,400 to be provided for an unforeseen liability
4. A creditor for 1,600 omitted from books is to be shown in the books
5. There is a creditor for400 which is not likely to claim his amount
6. An old customer whose account was written off as bad debts, has promised to pay 2,000in full
settlement of his debts
7. Patents proved valueless

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 Assignment on Admission of a Partner
After making the above adjustments, the capital accounts of old partners were to be adjusted
according to new profit sharing ratio on the basis of D’s capital. Actual cash to be paid off or brought in
by old partners.

Prepare revaluation account, partner’s capital account and balance sheet.

Q81. The following is the balance sheet of A and B, who had been sharing profits in proportion of three
fours and one-fourth, on 31st march, 2014:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 37,500 Cash at bank 22,500
General reserve 4,000 Bills receivables 3,000
Capitals: A 30,000 Debtors 16,000
B 16,000 46,000 Stock 20,000
Office furniture 1,000
Land and building 25,000

87,500 87,500
They agreed to take C into partnership on 1st April, 2014 on the following terms:

1. That C pays 10,000 as his capital for 1/4th share in the future profits
2. That the goodwill of the firm is valued 20,000
3. That stock and furniture will be reduced by 10%. 5% prov. for doubtful debts will be created on
debtors.
4. That the capital accounts of the partners will be re-adjusted on the basis of their profit sharing
arrangements and any excess or deficiency transferred to their current account.
5. Land and building be appreciated by 20%

Prepare revaluation account, partner’s capital account and balance sheet of the firm

Q82. Rajat and Ravi are partners in the firm sharing profits and losses in the ratio 7:3. Their balance sheet as
at 31st march 2014.

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 60,000 Cash in hand 36,000
Reserve 10,000 Cash at bank 90,000
Capitals account: Debtors 44,000
Rajat 1,00,000 Stock 50,000
Ravi 80,000 1,80,000 Furniture 30,000

2,50,000 2,50,000

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 Assignment on Admission of a Partner
On 1st April, 2014, they admit Rohan on the following terms:

1. Goodwill is valued at 40,000 and Rohan is to bring in the necessary amount in cash as premium
for goodwill and 60,000 as capital for 1/4th share in profits
2. Stock is to be reduced by 40% and furniture is to be reduced to 40%
3. Capital of the partners shall be proportionate to their profit sharing ratio. After the admission of
Rohan total capital of the new firm was fixed at 2,40,000. Adjustment of capitals to be made by
cash.
Prepare revaluation account, partner’s capital account and cash account.

Q83. Amal, Vimal and Kamal share profits in the ratio of 6:5:3. Their balance sheet stood as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 20,400 Stock 42,000
Bills payables 7,600 Debtors 30,800
Provident funds 8,000 B/R 7,000
Capitals Amal 57,000 Cash 2,700
Vimal 48,000 Plant and machinery 68,500
Kamal 24,000 1,29,000 Furniture 14,000

1,65,000 1,65,000

They agreed to take Nirmal into partnership and give him 1/8th share. Other terms were:

1. Nirmal should bring in 21,000 as capital and 18,200 as goodwill

2. Furniture and stock be depreciated by 20% and 10% respectively
3. Value of plant and machinery to be appreciated to 72,200
4. A bill receivable of 1,000 was dishonored
5. After making the above adjustments, the capital accounts of the old partners will be adjusted
according to new profit-sharing ratio on the basis of Nirmal’s capital and actual cash to be paid
off to or brought in by old partners as the case may be

Pass the necessary journal entries and prepare cash account revaluation account capital account and
balance sheet of the new firm.

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 Assignment on Admission of a Partner
Q84. A, b and C are partners in a firm sharing profit ratio 2:3:5. On 31 st march 2014, their balance sheet was
as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 64,000 Cash 18,000
Bills payables 32,000 Bills receivables 24,000
P&L account 14,000 Furniture 28,000
Capitals A 36,000 Stock 44,000
B 44,000 Debtors 42,000
C 52,000 1,32,000 Investments 32,000
Machinery 34,000
goodwill 20,000

2,42,000 2,42,000
They admitted D into partnership on the following terms:

1. Furniture investments and machinery to be dep. To 85%

2. Stock is undervalued by 4,000
3. D will bring 26,000 as his share of goodwill
4. Outstanding rent amounted to 1,800
5. Prepaid salaries 800
6. D to bring 32,000 towards capital for 1/6th share
7. Adjustments of capital to be made by cash

Prepare revaluation account partner’s account cash account and balance sheet of the firm

[ANS- RL 11,100; capitals, A: 32,000, B: 48,000, C: 80,000, D: 32,000; cash balance 95,100;
balance sheet 2,89,800]

Q85. Ishu and Vishu are partners sharing profits and losses in the ratio of 3:2. Their balance sheet as at 31st
march 2009 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 66,000 Cash at bank 87,700
General reserve 9,000 Debtors 42,000
Investments fluctuation fund 5,000 (-) prov. debts 7,000 35,000
Capitals Ishu 1,19,000 Investments 21,000
Vishu 1,12,000 2,31,000 Building 98,000
Plant and machinery 70,000

3,11,000 3,11,000

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 Assignment on Admission of a Partner
Nishu was admitted on 1st april 2009 for 1/6th share on the following terms:

1. Nishu will bring 56,000 as his share of capital

2. Goodwill of the firm is valued at 84,000 and Nishu will bring his share of goodwill in cash
3. Plant and machinery be dep. By 20%
4. All debtors are good
5. There is a liability of 9,800 included in creditors that is not likely to arise
6. Capitals of ishu ans vishu will be adjusted on the basis of Nishu’s capital and any excess or
deficiency will be made by withdrawing or bringing in cash by the concerned partner.

Prepare the revaluation account, partner’s capital account and balance sheet of the new firm

Q86. A,B and C are partners in a firm sharing profits and losses in the ratio of 3:2:1. Their balance sheet as at
31st march 2007 is as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Sundry creditors 36,000 Cash 14,000
Bank overdraft 20,000 Sundry debtors 50,000
Reserve 15,000 (-) prov. 2,500 47,500
Capitals A 60,000 Stock 60,000
B 60,000 Patents 6,000
C 50,000 1,70,000 Fixed assets 98,500
Goodwill 15,000

2,41,000 2,41,000
On 1 April 2007, D is admitted into the firm with 1/4 share in the profits, which he gets 1/8th from A
st th

and 1/8th form B. other terms of agreement are as under:

1. D will introduce 60,000 as his capital and pay 18,000 as his share of goodwill
2. 20% of the reserve is to remain as a provision against bad debts
3. A liability to extend of 1,000 be created in respect of a claim for damages against the firm
4. An item of 4,000 included in sundry creditors is not likely to be claimed
5. Stock is to be reduced by 30% and patents to be written off in full
6. A is to pay off the bank overdraft

After making the above adjustments the capital accounts of the old partners adjust on the basis of
D’s capital to his share in the business actual cash to be paid off to, or brought in by, the old partner’s
as the cash may be.

Prepare journal entries, capital accounts and the balance sheet of the new firm.

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 Assignment on Admission of a Partner
Q87. X and Y share profits in the ratio of 3:2. Their balance sheet as at 31 st march 2012, was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Outstanding exp. 5,000 Cash 7,800
Sundry creditors 36,000 Sundry debtors 24,000
Prov. for doubtful debts 800 Stock 5,000
Capitals: 68,000 Fixed assets 80,000
X 31,000 Goodwill 8,000
y P&L 16,000

1,40,800 1,40,800
st
On 1 april, 2012 Z is admitte into partnership on the following terms:

1. Fixed assets are to be dep. By 20%

2. Prov. for doubtful debts should remain at 5% on debtors
3. The new profit sharing ratio will be 5:3:2
4. Z will pay 20,000 as capital and the capitals of old partners will be adjusted on the basis of new
partner’s capital and his share in the business, actual cash to be brought in or withdraw by old
partner’s as the case may be
5. Goodwill of the firm is valued at 20,000

Prepare journal entries, capital account and the opening balance sheet of the new firm.

Q88. A and B were partners sharing profits in the ratio of 2:3. Their balance sheet as at 31 st march 2012 was
as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Bank overdraft 32,000 Cash in hand 3,000

Creditors 25,000 Cash at bank 12,000
P&L 10,000 Debtors 40,000
Capitals A 1,00,000 (-) prov. 5,000 35,000
B 1,05,000 2,05,000 Furniture 40,000
Building 80,000
Machinery 1,00,000
Investments 2,000

2,72,000 2,72,000

On 1st April 2012 they admitted C for 1/5th share in profits which he acquires wholly from B. the other
terms of agreements were:

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 Assignment on Admission of a Partner
1. Goodwill of the firm was to be at valued at two year’s purchase of the average of the last 3 years
profits. The profits for the last 3 years were 58,000; 66,000 and 56,000 respectively.
2. Prov. for doubtful debts was found in excess by 2,000
3. Buildings were found undervalued by 20,000 and furniture overvalued by 5,000
4. 5,000 for damages claimed by a customer had been disputed by the firm. It was agreed at 2,000
by a compromise between the customer and the firm
5. C was to bring in 60,000 as his capital and the necessary amount for his share of goodwill
6. Capitals of A and B were to be adjusted in the new profit sharing ratio by opening necessary
current account.

Prepare journal entries capital account and the opening balance sheet

[ANS- RP 15,000, capitals A: 1,20,000, B: 1,20,000 and C: 60,000; cash in hand 3,000; cash at bank
(after deducting bank overdraft) 64,000. B/S 3,51,000; new ratio 2:2:1, A: current A/c 10,000(Dr.) B
A/c 24,000(Cr.)

Q89. X and Y were sharing profit in the ratio of 2:1. They admitted Z on condition that he made sufficient
capital, to acquire 1/5th share which he takes from X and Y in the ratio of 1:2. Z will also bring 60,000
for goodwill. Capital before admission were X 1,80,000 and Y 1,20,000 reserve stood at 30,000 and
revaluation disclosed a profit of 21,000. Find out Z’s capital

[ANS- X’s capital 2,34,000; Y’s capital 1,77,000 and Z brings 1,02,750]

Q.90. A and B share profits in the ratio of 3:1. Their balance sheet as on 31 st march 2014 was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 60,000 Machinery 50,000
B 29,000 89,000 Goodwill 16,000
Workmen compensation 9,000 Patents 6,000
Creditors 24,000 Furniture 10,000
Outstanding expense 1,500 Sundry debtors 30,000
Bills payables 15,000 (-) prov. 4,000 26,000
Stock 25,000
Cash 5,500
1,38,500 1,38,500

They admitted C as partner on this date. New profit sharing ratio agreed to be 2:1:1. All partners
agreed that:

1. C will bring proportionate capital on the basis of combined capital of old partners after all
adjustments.

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 Assignment on Admission of a Partner
2. C will also bring 14,000 as his share of goodwill
3. There was a claim of 1,000 for workmen compensation
4. 5% discount is expected to be received from creditors
5. Outstanding expense shown in the balance sheet are to be reduced to 1,200
6. Accrued income of 1,000 is to be brought in books
7. Prov. for bad debts was found in excess by 1,500

Prepare necessary accounts and balance sheet of the new firm.

Q91. Anu and Manu share profits in the ratio of 3:2. Their balance sheet as on 31st December 2013 was as
under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals Anu 48,500 Leasehold 14,000
Manu 24,600 Machinery 17,000
Workmen profit sharing 11,200 Furniture 4,500
Creditors 14,600 Stock 28,600
Bills payables 8,500 Debtors 22,000
Bills receivables 15,000
Cash 6,300

1,07,400 1,07,400
st
On 1 January, 2014, they admit Tanu as a partner on the following basis:

1. Tanu will get 1/6th in future profits

2. Tanu will bring proportionate capital on the basis of old partner’s capital after all adjustments
3. Tanu will not bring goodwill in cash. Total value of goodwill of firm is 15,000
4. Machinery will be dep. By 10% and obsolete stock of 2000 will be written off
5. Investments of 3,000 not shown in the books will now be shown
6. Commission of 1,200 earned but not yet received by Anu and Manu will be taken in books

Journalize the above and prepare the necessary accounts and balance sheet of the firm

[ANS- RP 500; total balance sheet 1,25,620]

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 Assignment on Admission of a Partner
Q92. The balance sheet of Sethi and Soni carrying on business under partnership and sharing profits in the
ratio of 3:1. Stood on 31st march, 2014 as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals Sethi 42,700 Plant 22,000

Soni 30,600 Furniture 8,400
Workmen compensation 6,000 Patents 3,600
Creditors 16,000 Sundry debtors 30,000
Bills payables 7,600 Stock 26,300
Outstanding exp. 1,200 Cash 1,800
Goodwill 12,000

1,04,100 1,04,100
They admitted Somani as partner on that day . they agreed upon :

1. That new profit sharing ratio will be 5:3:2 and Somani will bring in capital equal to 1/4 th of
combined capital of old partners
2. He will also bring 9,000 as goodwill
3. Outstanding exp. Shown in balance sheet will be increased by 300
4. There was a claim of 1,000 for workmen compensation which was paid off
5. A prov. @10% to be made for debts on debtors and prov. for discount will be created @2% on
debtors and creditors
6. Accrued income of 800 will be brought in the books

Draft necessary journal entries to give effects to the above agreements and prepare the opening
balance sheet of new firm

Q93. The balance sheet of Ram and Shyam, who were sharing profits in the ratio of 3:1, on 31 st march 2010
was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Creditors 28,000 Cash at bank 20,000
Employees prov. funds 12,000 Debtors 65,000
General reserve 20,000 (-) prov. for debts 5,000 60,000
Capitals : Ram 60,000 Stock 30,000
Shyam 40,000 1,00,000 Investments 50,000

1,60,000 1,60,000

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 Assignment on Admission of a Partner
They decided to admit Mohan on April 1st 2010 for 1/5th share on the following terms:

1. Mohan shall bring 60,000 as his share of premium

2. That unaccounted accrued income of 1,000 be provided for
3. The market value of investments was 45,000
4. A debtor whose dues of 5,000 was written off as bad debts paid 4,000 in full settlements
5. Mohan to bring in capital to the extent of 1/5th of the total capital of new firm

Prepare revaluation account, partner’s capital account and the balance sheet of the new firm.

Q94. A and B are partners sharing profits and losses in the ratio of 3:2. Their balance sheet as t 31 st march
2012 stood as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 70,000 Machinery 66,000

B 60,000 Furniture 66,000
General reserve 20,000 Investments 30,000
Bank loan 18,000 Stock 40,000
Creditors 72,000 Debtors 38,000
(-) prov. 4,000 34,000
Cash 24,000

2,40,000 2,40,000
st
On 1 april 2012 they admitted C for 25% share in profits on the followings trms:

1. C brings in capital proportion to his share after all adjustments and 8,000 for goodwill out of his
share of14,000
2. Dep. Furniture by 10%
3. Half of investments were to be taken over by A and B in their profits sharing ratio and remaining
valued at 26,000
4. New ratio will be 3:3:2.

Prepare revaluation account Partner’s capital account and the balance sheet after C’s admission

Q95. A and B are partners sharing profits and losses in the ratio of 3:1. On 1st April, 2014 they admitted C as
new partner for 1/4th share in the profits of the firm. C brings 2,00,000 as capital for his 1/4 th share in
profits of the firm. The capital of A and B after all adjustments in respect of goodwill , revaluation of
assets and liabilities, etc. has been worked out at 5,00,000 for A and 1,20,000 for B, it is agreed that
partner’s capital will be according to new profit sharing ratio. Calculate the new capital of A and B and
pass the journal entries assuming that A and B brought in or withdrew the necessary cash as the case
may be for making their capitals in proportion to their profit sharing ratio.

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 Assignment on Admission of a Partner

Q96. A,B and C are partners in a firm sharing profit and losses in the ratio of 3:2:1. D is admitted as a new
partner for 1/4th share in the profits of the firm, which he gets 1/8 from A, and 1/6 th from B and C. the
total capital of the new firm after D’s admission will be 2,40,000, d is required to bring in cash equal to
1/4th of the total capital of new firm. The capital of the old partners also have to be adjusted in
proportion of their profits sharing ratio. The capitals of A,B and C after all adjustments in respect of
goodwill and revaluation of assets and liabilities have been made are A: 80,000, B: 30,000 and C:
28,000. 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.

Q97. On 31st December 2019 the balance sheet of A and B who are partners in a firm sharing profits in the
ratio of 3:2 was as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals A 1,00,000 Plant and machinery 1,00,000
B 80,000 Land and buildings 80,000
General reserve 1,50,000 Debtors 1,20,000
Workmen’s compensation 50,000 (-) prov. 10,000 1,10,000
Creditors 1,20,000 Stock 1,20,000
Cash 90,000

5,00,000 5,00,000
st th
On 1 January, 2020 they agreed to admit C into partnership for 1/5 share of profits on the following
terms:

1. Prov. for doubtful debts would be increased by 20,000

2. The value of land and building would be increased by 1,80,000
3. The value of stock would be increased 40,000
4. The liability against workmen’s compensation reserve is determined as 20,000
5. C brought in as his share of goodwill 1,00,000 in cash
6. C would bring further cash as would make his capital equal to 20% of the total capital of the new
firm, after the above revaluation and adjustments asre carried out

Prepare revaluation account partner’s capital account and balance sheet of the firm after C
admission

[ANS- RP 1,20,000, capital account A: 3,40,000, B: 2,40,000 and C: 1,45,000. Balance sheet 8,65,000]

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 Assignment on Admission of a Partner
Q98. X and Y are partners in a firm. They share profits and losses in the ratio of their balance sheet as at 31st
march 2021 stood as follows:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals X 1,40,000 Plant and machinery 1,75,000
Y 1,00,000 Furniture and fixture 65,000
Workmen compensation 40,000 stock 53,000
Creditors 1,50,000 Bills receivables 12,000
Bills payables 10,000 Debtors 1,10,000
(-) prov. 7,000 1,03,000
Cash and bank balance 50,000

4,40,000 4,40,000
th th
Z is admitted in the partnership. X surrender’s 2/5 share and Y 1/5 of his share in favor of Z. the
following info is given about the firm:

1. Plant and machinery be reduced by 35,000 and furniture and fixtures be reduced to 58,500
2. Prov. for bad debts and doubtful debts is to be increased 3,000
3. Actual liability of workmen compensation claim 16,000
4. A liability of 2,500 included in creditors is not likely to arise
5. Z’s share of goodwill is valued at 40,000 but he is unable to bring it in cash
6. Z is to bring in capital proportionate to his share after all adjustments

Prepare revaluation account capital account and balance sheet after Z’s admission. Also calculate the
new profit sharing ratio .

[ANS- RL 42,000; capital accounts X: 1,60,000, Y: 1,02,000 and Z: 1,31,000 balance sheet 1,81,000; Z’s
current account (Dr.) 40,000 balance sheet total 5,66,500; sacrificing ratio 4:1. New ratio 6:4:5]

Q99. The following is the balance sheet of X and Y as at 31 st march 2012, Z is admitted as a partner on that
date when the position of X and Y was as under:

LIABILITIES AMOUNT ASSETS AMOUNT

Capitals X 1,00,000 Debtors 1,60,000
Y 80,000 Stock 1,20,000
Creditors 2,10,000 Cash in hand 1,40,000
General reserve 1,60,000 Buildings 80,000
Workmen’s compensation 50,000 Machinery 1,00,000

6,00,000 6,00,000
X and Y shared profits in the proportion of 3:2. The following terms of admission are agreed upon:

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 Assignment on Admission of a Partner
1. Revaluation of assets; buildings 1,80,000; stock 1,60,000
2. The liabilities of workmen’s compensation is determined at 30,000
3. Z brought in as his share of goodwill 1,00,000 in cash
4. Z was to bring further cash as would make his capital equal to 20% of the combined capital of X
and Y after above revaluation and adjustments are carried out
5. The further profit sharing ratio was:

X- 2/5th Y- 2/5th Z-1/5th

Prepare the new balance sheet of the firm and capital accounts of the partners

[ANS- RP1,40,000; capitals A: 3,92,000, Y: 2,08,000 and Z: 1,20,000; B/S 9,60,000]

AK Coaching Centre

Hari Nagar & Tilak Nagar New Delhi

9811133707,9811683707

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