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Partnership - Admission of Partner - DPP 10 (Of Lecture 12) - (Kautilya)
Partnership - Admission of Partner - DPP 10 (Of Lecture 12) - (Kautilya)
Partnership - Admission of Partner - DPP 10 (Of Lecture 12) - (Kautilya)
Kautilya Batch
Admission of a partner DPP-10
1. A and B are two partners sharing profits in the ratio of 2:1. C, a new partner admitted for 1/4th share. At the
time of admission, loss from revaluation is ₹9,000. Pass a necessary journal entry for distribution of loss
between the partners?’
(1) A’s Capital A/c Dr 6,000
B’s Capital A/c Dr 3,000
To Revaluation A/c 9,000
(2) A’s Capital A/c Dr 9,000 To
B’s capital A/c 9,000
(3) Revaluation A/c Dr 9,000
To A’s Capital A/c 6,000
To B’s Capital A/c 3,000
(4) B’s Capital A/c 9,000
To A’s Capital A/c 9,000
2. Earth and Mars were partners in a firm sharing profits in the ratio of 2:1. Venus was admitted as a new partner in
the firm. The new profit sharing ratio was 3:3:2. Venus brought the following assets towards his share of goodwill
and his capital: Machinery ₹2,00,000; Furniture ₹1,20,000; Stock ₹80,000; Cash ₹50,000. If his capital is
considered as ₹3,80,000, the goodwill of the firm will be:
(1) ₹70,000
(2) ₹2,80,000
(3) ₹4,50,000
(4) ₹1,40,000
3. The Emi, Nemi and Kimi are partners sharing profits in the ratio of 5:3:2. They have admitted Vimi into the
partnership for 1/6th share. An Extract of their balance sheet on 1st April 2020 is as follows
Liabilities – Investment Fluctuation Fund ₹27,000
Assets – Investment (Cost) ₹3,00,000
If the market value of investments is ₹2,90,000, then the investment fluctuation fund will be shown in the balance
sheet of the firm :
(1) Rs. 27000
(2) Rs. 20000
(3) Rs. 10000
(4) Rs. 13000
4. Dana and Lana were sharing profits in the ratio of 2:1. Jana was admitted for 1/3rd share and claim on workmen
compensation reserve was ₹10,000.
Journalise.
Liabilities – Workmen's Compensation Reserve – ₹18,000
(1) Workmen Compensation Reserve A/c Dr 18,000
To Dana’s Capital A/c 12,000
To Lana’s Capital A/c 6,000
(2) Workmen Compensation Reserve A/c Dr 18,000
To Dana’s Capital A/c 8,000
To Lana’s Capital A/c 4,000
To Jana’s Capital A/c 6,000
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5. At the time of admission of new partner Chikki, if the value of land and building is to be appreciated by 10%, then
what will be the amount of Land and Building which is to be shown in the new balance sheet if Land & Building
given on balance sheet is Rs. 100000?
(1) ₹90,000
(2) ₹1,00,000
(3) Rs. 10000
(4) Rs. 110000
6. X and Y are partners sharing profit in the ratio of 3 : 2. They agree to admit Z for 1/5th share in future profit. Z
brings 5,00,000 as capital and is unable to bring his share of goodwill in cash. The goodwill of the firm is to be
valued at Rs. 3,60,000. Pass the necessary journal entries if:
No goodwill exists in the books.
At the time of admission goodwill existed in the books of the firm at 1,60,000
7. A and D are partners sharing profits and losses in the ratio of 3/10 and 7/10 respectively K admitted into partnership
for 1/4 share in profits on the terms that Plant & Machinery increased by Rs 5000 , Provision for doubtful debt to be
create Rs 1250 , Claim to be create against Liability for damages Rs. 750 , Value of Debtors Increased by 250 .
What will be the revaluation profit?
8. A, B and C were partners in a firm sharing profits in the ratio of 2 : 1 : 1. On 1st April, 2018 they admitted D as a
new partner. D brought ₹ 2,00,000 for his capital and ₹ 24,000 for his share of goodwill premium. The new profit
sharing ratio between A, B, C and D will be 1 : 2 : 1 : 1.
Pass necessary journal entries for the above transactions in the books of the firm on D’s admission.
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9. A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. On 31st March, 2019 their balance sheet
was as follows
Balance Sheet as at 31st March, 2015
Liabilities Amount Assets Amount
Creditors 84,000 Bank 17,000
General Reserve 21,000 Debtors 23,000
Capital A\c s Stock 1,10,000
A 60,000 Investments 30,000
B 40,000 Furniture and Fittings 10,000
C 20,000 1,20,000 Machinery 35,000
2,25,000 2,25,000
On the above date, D was admitted as a new partner and it was decided that
1. The new profit sharing ratio between A, B, C and D will be 2: 2: 1: 1.
2. Goodwill of the firm was valued at Rs. 90,000 and D brought his share of goodwill premium in cash.
3. The market value of investments was Rs 24,000. Machinery will be reduced to Rs 29,000.
4. A creditor of Rs 3,000 was not likely to claim the amount and hence to be written-off.
5. D will bring Rs. 29400 as capital so as to give him l/6th share in the profits of the firm.
Prepare revaluation account, partners’ capital accounts and the balance sheet of the reconstituted firm.
10. Pass entries in the firm's Journal for the following on admission of a partner:
Answer Key
1. (1)
2. (2)
3. (3)
4. (3)
5. (4)
6. (H&S)
7. (H&S)
8. (H&S)
9. (H&S)
10. (H&S)
5
2. (2)
The goodwill of the firm will be ₹2,80,000
3. (3)
Rs. 10000
4. (3)
Workmen Compensation Reserve A/c Dr 18,000
To Claim on Workmen compensation A/c 10,000
To Dana’s Capital A/c 5,333
To Lana’s Capital A/c 2,667
5. (4)
The amount of Land and Building which is to be shown in the new balance sheet is Rs. 110000
6. (H&S)
Journal Entries
7. (H&S)
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Revaluation A\c
Particulars Amount Particulars Amount
To Provision for doubtful debt 1250 By Plant & Machinery A\c 5,000
A\c By Debtors A\c 250
To Liability for damages A\c 750
To profit transferred 3,250
8. (H&S)
Journal Entries
Date Particulars L.F Amnt. (Dr.) Amt (Cr.)
2018 Cash A\c Dr. 2,24,000
Apr To D’s Capital A\c 2,00,000
1 To Premium for Goodwill A\c 24,000
(Being amount of capital and premium brought in by D)
Premium for Goodwill A\c Dr. 24,000
B’s Capital A\c Dr. 18,000
To A’s Capital A\c 36,000
To C’s Capital A\c 6,000
1. Calculation of Sacrificing Ratio
Sacrificing Ratio = Old Share – New Share
2 1 10 − 4 6
A= − = =
4 5 20 20
1 2 5−8 3
B= − = =
4 5 20 20
1 1 5−8 1
C= − = =
4 5 20 20
2. 1/5th share of goodwill = ₹ 24,000
Firms goodwill = 24,000 × 5 = ₹ 1,20,000
B would compensate = 1,20,000 ×3/20 = ₹ 18,000 A would sacrifice =1,20,000 x 6/20= ₹ 36,000
C would sacrifice =1,20,000 x 1/20 = ₹ 6,000
9. (H&S)
Revaluation Account
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Balance Sheet:-
Liabilities Amount Assets Amount
Creditors 81,000 Bank 61,400
Capital A\c Debtors 23,000
A 81,000
B 44,000
C 22,000
D 29,400 1,76,400
Stock 1,10,000
Investment 24,000
Furniture And Fittings 10,000
Machinery 29,000
2,57,400 2,57,400
10. (H&S)
JOURNAL
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