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Admission of Partner (Test)
Time allowed:1 hour] [Maximum marks:16
1. Atal and Madan were partners in a firm sharing profits in the ratio of 5 : 3. on 31.3.2022
they admitted Mehra as a new partner for 1/5th share in the profit. The new profit sharing
ratio was 5 : 3 : 2. On Mehra’s admission the Balance Sheet of the firm was as follows:(8)
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Capitals: Land and Building 1,50,000
Atal Rs. 1,50,000 Machinery 40,000
Madan Rs. 90,000 2,40,000 Patents 5,000
Stock 27,000
20,000 Debtors 47,000
Creditors
32,000 - Provision for D/d 1200 45800
Workmen Compensation Fund
Cash 4,200
Profits & Loss Account 20,000
2,92,000 2,92,000
On Mehra’s admission it was agreed that:
1. Mehra will bring Rs. 40,000 as his capital and Rs. 16,000 for his share of goodwill
premium.
2. A provision of 21⁄2% for bad and doubtful debts was to be created:
3. Included in the sundry creditors was an item of Rs. 2,500 which was not be paid;
4. A provision was to be made for an outstanding bill for electricity Rs. 3,000;
5. A claim of Rs. 325 for damages against the firm was likely to be admitted. Provision
for the same was to be made.
6. After the above adjustments, the capitals of Atal and Madan were to be adjusted on
the basis of Mehra’s capital. Actual cash was to be brought in or to be paid off to Atal
and Madan as the case may be.
Prepare Revaluation Account, Capital Accounts of the partners and the Balance Sheet of
the new firm.
2. A and B were partners in a firm sharing profits in the ratio of 11 : 4. C was admitted as a
new partner for 1/5th share in the profits on 1.3.2010. the Balance sheet of A and B on 1
April 2022 was as follows: (8)
Liabilities Amount (Rs.) Assets Amount (Rs.)
Creditors 15,000 Bank 17,000
Bills Payables 30,000 Stock 29,000
Employees Provident Fund 20,000 Debtors Rs. 30,000
Workmen Compensation Fund 1,60,000
Less: Provision for Bad debts 1,000
Capitals: 29,000
Plant
A Rs.20,00,000 3,00,000
Land
25,50,000, 10,00,000
B Rs. 5,50,000 Building
14,00,000
27,75,000 27,75,000
It was agreed that
1. C to bring in capital to be extent of 1/5th of the total capital of the firm and Rs. 1,50,000
for his share of goodwill, half of which was withdrawn by A and B.
2. Building and Plant were to be depreciated by 20%.
3. Provision for bad debts was to be increased by Rs. 200.
4. Claim on account of workmen compensation is Rs. 10,000.
Prepare Revaluation Account, Partners Capital Account and Balance Sheet of the new firm.

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