D. K. Goel solutions for अकाऊंटन्सी पार्ट A वॉल्यूम १ अँड २ [इंग्रजी] इयत्ता १२ chapter 3 - Admission of a Partner [Latest edition]

The sacrificing ratio of Dev, Gautam and Kamal will be:

The total interest on capital allowed by the firm to the partners will be:

Deficiency in Naveen’s profits will be:

The average profits of the firm from the year 2017-18 to the year 2020-21 were:

The value of goodwill of the firm on Satvik’s admission was:

Satvik is unable to bring in cash his share of goodwill. The account to be debited to record his goodwill compensation will be:

At the time of Kavi’s admission, the Workmen Compensation Reserve of:

The value of Land and Building in the Balance Sheet of the reconstituted firm will be:

Dhruv and Ansh are partners in a firm sharing profits and losses: Dhruv 75% and Ansh 25%. Their Balance Sheet as at 31st March, 2021 is given below:

On 1st April 2021, Kavi is admitted as a new partner on the following terms:

1. Land and building is found to be valued at 25% above cost. It is decided to bring it to its cost.
2. Bad debts amounting to ₹ 1,800 are to be written off. The remaining debtors are good.
3. Creditors include an amount of ₹ 5,000 received as commission from Amar. The necessary adjustment is required to be made.
4. The liability on Workmen Compensation Reserve is determined at ₹ 3,000.
5. Kavi is to pay ₹ 15,000 to the existing partners as premium for Goodwill for 20% of the future profits of the firm. He is also to bring in ₹ 25,000 as capital.

To adjust the creditors in adjustment (iii):

The provision for Doubtful Debts in the reconstituted firm will be:

The date of the Balance Sheet of the reconstituted firm will be:

Loss on Revaluation will be:

New Profit Sharing Ratio will be:

You are required to choose the correct option:

In respect of goodwill:

A’s Capital A/c balance will be:

B’s Capital A/c balance will be:

Gain on revaluation will be:

New Profit Sharing Ratio will be:

Choose the Correct Option:

Entry for dishonour of Bill of Exchange will be:

A’s Capital A/c balance will be:

Loss on revaluation will be:

New Profit Sharing Ratio will be:

A’s Capital Account Balance will be:

C’s Capital Account Balance will be:

Pijush and Harjeet are partners sharing profits in the ratio 3 : 2. They admit Arun, a new partner, who acquires 1/25th share from Harjeet and rest from Pijush to make his share 1/3rd of Harjeet's new profit share.

What is the new profit-sharing ratio of all the partners?

Aman and Ankita are in partnership sharing profits and losses equally. Their combined capital account balance is ₹ 2,00,000. John is admitted as a partner. At the time of his admission:

(a) The value of non-current assets are to be increased by ₹ 30,000.

(b) John brings his share of Goodwill ₹ 20,000 which is distributed to the sacrificing partners and it is withdrawn by them.

After John's admission, the total of all the partners' capital accounts (including John's capital) is ₹ 2,70,000.

What is John's capital contribution?

On the basis of the above Partners' Capital Account, answer the questions.

1. What is the old profit-sharing ratio and sacrificing ratio?
2. The firm incurred a ______ (profit/loss) of ₹ ______ in the Revaluation A/c.
3. Pass the Journal entry if Om is admitted for 1/4th share and the partners decide to retain the General Reserve in the new Balance Sheet?

A and B are partners sharing profits in the ratio of 5 : 3. C is admitted to the partnership for `1/4`th share of future profits. Calculate the new profit sharing ratio and the sacrificing ratio.

A and B were partners sharing profits in the ratio of 21 : 9. C was admitted on `9/21` share in the profits. Calculate new profit sharing ratio of the partners.

P and Q are partners sharing profits and losses in the ratio of 4 : 3. They admit R as a partner for a `1/7`th share in profits, which he acquires equally from P and Q. Calculate the new profit-sharing ratio of the partners.

R and S share profits in the ratio of 3 : 2. They admitted 7 as partner for 1/4 share which will be borne by R and S equally. Find out the new profit sharing ratio.

P, Q, and R were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted S as a new partner for 1/8th share in the profits which he acquired 1/16th from P and 1/16th from Q.

Calculate new Profit Sharing Ratio of P, Q, R and S.

X and Y are partners sharing profits in the ratio of 2 : 1. Z is admitted with `5/11`th share, which he takes `3/11`th from X and `2/11` from Y. Calculate the new profit-sharing ratio of the partners.

A and B are partners sharing profits in the ratio of 5 : 3. They admit C on a `1/4`th share, which he acquires `1/6`th from A and `1/12`th from B. Calculate the new profit-sharing ratio of the partners.

A, B and C were partners in a firm sharing profits in 1 : 2 : 3 ratio. They admitted D as a new partner for `1/6` th share. D acquired his share `1/24` from A, `1/24` from B and `1/12` from C. Calculate new profit sharing ratio.

A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the partnership, giving him `1/2` share in profits, which he acquires from A and B in the ratio of 3 : 1. Calculate the new profit ratio.

X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z as a new partner who gets `1/5`th share. Calculate the new profit-sharing ratio in each of the following cases:

1. If Z acquires his share from X and Y in their profit-sharing ratio;
2. If he acquires `3/20`th from X and `1/20`th from Y;
3. If he acquires `1/10`th from X and `1/10`th from Y;
4. If he acquires `1/20`th from X and `3/20`th from Y;
5. If he acquires his share entirely from X;
6. If he acquires his share entirely from Y.

A and B are partners sharing profits in the ratio of 3 : 2. C is admitted for 1/5th share of profits out of which half share was gifted by A and the remaining share was taken by C equally from A and B. Calculate new profit sharing ratio.

A and B are partners in a firm sharing profits in the ratio of 2 : 1. С joins the firm. A surrenders 1/4th of his share and B 1/5th of his share in favour of C. Find the new profit sharing ratio.

A and B share profits in the ratio of 3 : 2. They agreed to admit C on the condition that A will sacrifice 3/20th of his share of profit in favour of C and B will sacrifice 1/20th of his profits in favour of C. Calculate new profit sharing ratio.

A, B and C are partners in a firm sharing profits in 4 : 3 : 3 ratio. They decided to admit their manager D into the partnership. A surrendered `1/4` of his share in favour of D; B surrendered `1/5` of his share in favour of D, and C surrendered `1/6` of his share in favour of D. Calculate the new profit sharing ratio.

A and B are partners sharing profits and losses in the ratio of 3 : 2. They admit X and Y as new partners. A surrendered `1/3`rd of his share in favour of X and B surrendered `1/4`th of his share in favour of Y. Calculate the new profit sharing ratio of A, B, X and Y.

P and share profits in 3 : 2. On 1st April, 2022, they admit R and S with `1/4 and 1/5` share respectively. The profit of the firm for the year ended 31st March 2023 amounted to 2,00,000. Prepare necessary journal entries for the distribution of profit.

Hint: New Ratios 33: 22: 25: 20.

Saurabh and Gaurav are equal partners. They admit Chunmun as a partner in their firm and the new ratio of all the three has been decided upon as 4 : 3 : 2. Find the sacrificing ratio.

A, B and C share profit and losses in the ratio of 3 : 2 : 1. Upon admission of D, they agreed to share as follows:

1. 4 : 4 : 2 : 2
2. 2 : 4 : 2 : 4

Calculate sacrificing ratios.

A, B and C are partners sharing profits in the ratio of 2 : 2 : 1 respectively. They admit D for 1/6th share in the firm. Calculate the sacrificing ratio.

A and B are partners sharing profits in the ratio of 5 : 3. C is admitted to the partnership for `1/4`th share of future profits. Calculate the new profit sharing ratio and the sacrificing ratio.

A and B are partners sharing profits in the ratio of 7 : 3. C was admitted. A surrendered `1/7`th of his share and B `1/3`rd of his share in favour of C. Calculate the sacrificing ratio and the new profit-sharing ratios of the partners.

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. C is admitted into partnership. A sacrifices `1/3` of his share and B `1/10` from his share in favour of C. Determine the sacrificing ratio and the new profit sharing ratio.

A and B are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admit C and D as new partners. A sacrifices `1/2` of his share in favour of C and B sacrifices `1/4` from his share in favour of D. Calculate their new profit sharing ratio.

Find out the sacrificing ratio and new ratio in the following case:

A and B are partners sharing profits and losses in the ratio of 4 : 3. C is admitted for 1/5th share. A and B decided to share equally in future. Calculate the new ratio and sacrificing ratio.

A, B, C and D are in partnership sharing profits and losses in the ratio of 36 : 24 : 20 : 20 respectively. E joins the partnership for 20% share and A, B, C and D in future would share profits among themselves as `3/10 : 4/10 : 2/10 : 1/10`. Calculate new profit-sharing ratio after E’s admission.

A and B are partners in a firm sharing profits in the ratio of 3 : 1. They admit C and decide that the profit-sharing ratio between B and C shall be same as existing between A and B. Calculate new profit-sharing ratio and the sacrificing ratio.

A, B and C are partners sharing in the ratio of 4 : 3 : 2. They admit D for `1/9`th share. It is agreed that A would retain his original share. Calculate the new ratios and sacrificing ratios.

P, Q and R are partners sharing profits and losses in the ratio of 5 : 3 : 2. S is admitted as a new partner for `1/5`th share. P sacrifices `1/10` th from his share in favour of S and remaining sacrifice was made by Q and R in the ratio of 2 : 1. Calculate sacrificing ratio and new profit sharing ratio.

L, M and N are partners sharing profits in the ratio of 3 : 2 : 1. They admit O into partnership. O brings in cash ₹ 4,50,000 as capital and ₹ 1,50,000 as goodwill for `1/5`th share of profits. Pass journal entries and find out new profit sharing ratios when:

1. Goodwill is retained in the firm;
2. goodwill is withdrawn by old partners.

P and Q are partners sharing profits and losses in the ratio of 2 : 1. They admit R into partnership for `4/9`th share in profits which he acquires equally from P and Q. R brings in cash ₹ 2,50,000 as capital and ₹ 1,80,000 as goodwill.

Pass journal entries and find out new profit sharing ratios.

X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for `2/7`th share in the profits (of which he acquires `3/4`th from X and `1/4`th from Y). Z brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill. Half of the amount of goodwill is withdrawn by the old partners.

Pass necessary Journal entries and find out new profit sharing ratio.

K and Y were partners in a firm sharing profits in 3 : 2 ratio. They admitted Z as a new partner for `1/3`rd share in the profits of the firm. Z acquired his share from K and Y in 2 : 3 ratio. Z brought ₹ 80,000 for his capital and ₹ 30,000 for his `1/3`rd share as premium. Calculate the new profit sharing ratio of K, Y and Z and pass necessary journal entries for the above transactions in the books of the firm.

Anju and Manju are partners, sharing profits and losses in the proportion of 7 : 5. They agreed to admit Meenu, their manager, into partnership, who is to get one sixth share in the business. Meenu brings in ₹ 2,00,000 for her capital and ₹ 96,000 for `1/6`th share of goodwill which she acquires `1/24`th from Anju and `1/8`th from Manju. The profit for the first year of the new partnership amount to ₹ 4,80,000.

Make the necessary Journal entries in connection with Meenu’s admission and divide the profit between the partners.

X and Y share profits and losses in the ratio of 3 : 2. They admit Z as a partner who pays ₹ 72,000 as premium for goodwill for `1/4`th share in the future profits of the firm.

Pass Journal entries appropriating the premium money and show the new profit sharing ratio in each of the following cases:

1. if he acquires his share of profits in the original ratio of existing partners.
2. if he acquires his share of profits in equal proportions from the existing partners.
3. if he acquires his share in the ratio of 2 : 3 from the existing partners.
4. if he acquires his share of profits as `7/32` th from X and `1/32` th from Y.

A, B and C are partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They admitted D as a new partner, who brings ₹ 5,00,000 as capital and ₹ 2,10,000 as his share of goodwill in cash. A surrendered `1/5`th of his share, B surrendered `1/6`th of his share and C surrendered `1/8`th of his share in favour of D.

Find out sacrifice ratio and pass necessary journal entries for the above.

Partners A, B and C share the profit of a business in the ratio of 3 : 2 : 1 respectively. For one-sixth share they admit D who brings in ₹ 2 00,000 including ₹ 60,000 for his share of goodwill. Show the journal entries if A, B, C and D decide to share the profits respectively in the ratio of (a) 15 : 10 : 5 : 6; (b) 5 : 3 : 2 : 2 and (c) 2 : 2 : 1 : 1. Assume that the entire cash brought in by D remains in the business. Give Journal entries.

X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership, Z paying a premium of ₹ 1,00,000 for 1/4 share of the profits while X and Y as between themselves sharing profits and losses equally. Give Journal entries.

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 : 1. They admit D for `1/4`th share in the profits and he brought in ₹ 1,50,000 as his share of goodwill which was credited to the Capital Accounts of B and C respectively with ₹ 1,25,000 and ₹ 25,000.

Calculate the new profit sharing ratio.

P and Q are partners sharing profits and losses as 2 : 3. R and S are admitted and profit sharing ratio becomes 3 : 4 : 3 : 2. Goodwill is valued at ₹ 3,00,000. R brings required goodwill and ₹ 2,00,000 cash for Capital. S brings in ₹ 1,00,000 cash and Motor Vehicle for ₹ 80,000 as his capital in addition to the required amount of goodwill in cash.

Show the necessary journal entries.

Champak and Raja were partners sharing profits and losses in the ratio of 3 : 7. Varun was admitted on 1st April, 2025 as a new partner for 1/3rd share in the profits of the firm. Half of Varun's share was gifted by Raja and the remaining share was purchased by Varun in the ratio of 2 : 3 from Champak and Raja respectively.

Varun brought in ₹ 4,80,000 as Capital and his requisite share of Goodwill. Firm's goodwill was valued at ₹ 3,60,000. Net profit for the year ended 31st March, 2026 amounted to ₹ 2,40,000.

Pass the necessary journal entries at the time of admission of the new partner and for distribution of net profit.

Ram and Rahim are partners in a firm sharing profits in the ratio of 3 : 2. On April 1, 2023, they admit Raj as a new partner for a `3/13`th 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 and Machinery ₹ 1,50,000; Stock ₹ 80,000; and Debtors ₹ 70,000. On the date of admission of Raj, the goodwill of the firm was valued at ₹ 5,20,000. Record necessary journal entries in the books of the firm.

A and B are partners, sharing profit and losses in the ratio of 3 : 2. Goodwill exists in their Balance Sheet at ₹ 24,000, when C is admitted into partnership for `1/5`th share in profit. He pays ₹ 50,000 for capital and ₹ 8,000 as goodwill. The ratio of the partners A, B and C in the new firm would be 2 : 2 : 1.

Pass journal entries in the books of the new firm to record above adjustments.

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

A and B carrying on business as partners used to share profits and losses thus; A `4/7`ths and B `3/7`ths, and goodwill existing in the books of the firm at ₹ 2,80,000 when C was admitted as a partner having `1/7`th share in profits and losses. C was asked to pay a premium of ₹ 75,000 for goodwill, and the profit-sharing ratio as between A and B remained unchanged.

Show entries in the journal of the firm.

A and B are partners sharing profits and losses in 3 : 2. They admit C into partnership for 1/5th share in the profits. C pays in cash ₹ 40,000 for his capital. Goodwill of the firm is valued at ₹ 25,000 but C is unable to bring his share of goodwill in cash. Pass the necessary journal entries.

Aru and Beena are partners in a firm sharing profits in the ratio of 2 : 1. They admit Charu and Divya as two new partners. The new profit sharing ratio is agreed at 4 : 3 : 2 : 1. Charu introduced ₹ 5,00,000 and Diya ₹ 3,00,000 as their capitals.

Charu brings in ₹ 60,000 in cash for her share of goodwill but Diya is unable to bring her share of goodwill in cash.

Pass necessary journal entries.

A and B are partners sharing profits in the ratio of 3 : 2. On 1st April, 2022, they admit C as a new partner for `1/4`th share. C acquires `1/5`th of his share from A.

Goodwill on C’s admission is to be valued on the basis of the capitalisation of average profits of the last five years. Profits were:

Year ended

31st March, 2018 Profit ₹ 50,000
31st March, 2019 Profit ₹ 1,20,000 (including gain of ₹ 40,000 from sale of fixed assets)
31st March, 2020 Loss ₹ 60,000 (after charging a loss by Fire ₹ 50,000)
31st March, 2021 Loss ₹ 1,00,000 (after charging voluntary retirement compensation paid ₹ 1,50,000)
31st March, 2022 Profit ₹ 1,90,000

On 1st April, 2022, the firm had assets of ₹ 7,00,000 and external liabilities of ₹ 2,20,000.

The normal rate of return on capital is 12%.

C brings in ₹ 1,25,000 for his capital but is unable to bring his share of goodwill in cash.

1. You are required to calculate C’s share of goodwill,
2. Pass necessary journal entries, and
3. Calculate new profit-sharing ratios.

Hint:

C acquires `1/5`th of his share from A and the remaining `4/5`th of his share from B.

P, Q and R share profits in the ratio of 5 : 3 : 2. S was admitted into partnership. S brings in ₹ 30,000 as his capital. S is entitled for `1/5`th 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 the last four years’ average profits. The profits of the last four years’ are ₹ 32,000, ₹ 38,000, ₹ 35,000 and ₹ 31,000, respectively. S cannot bring goodwill in cash. Goodwill already appears in the books at ₹ 50,000. Give journal entries.

X and Y are partners sharing profits in the ratio of 3 : 2. Goodwill appears in their balance sheet at ₹ 60,000. Z is admitted as a partner for `1/4`th share in the profits. The total goodwill of the firm is valued at ₹ 2,00,000.

Pass journal entries if:

1. Z cannot bring in cash his share of goodwill.
2. Z brings in cash his share of goodwill.

Hint: In both cases, goodwill appearing in the balance sheet at ₹ 60,000 will be written off between old partners in old ratio.

A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the firm for 3/7th profits (which he takes 2/7th from A and 1/7th from B) and brings ₹ 6,00,000 as premium out of his share of ₹ 7,20,000. Goodwill account does not appear in the books of A and В.

Hint: Premium for Goodwill A/c will be debited by ₹ 6,00,000 and Current Account of C will be debited by ₹ 1,20,000 and Capital Accounts of A and B will be credited by ₹ 4,80,000 and ₹ 2,40,000 respectively.

A and B are partners sharing profits in the ratio of 3 : 1. C is admitted as a partner with `2/9`th share; A and B will in future get `4/9`th and `3/9`th share of profits. C pays ₹ 20,000 for goodwill. Pass the necessary journal entries.

Sonu and Monu are partners sharing profits in the ratio of 3 : 1. Tinku is admitted as a partner for which he pays ₹ 60,000 for goodwill in cash. Sonu, Monu and Tinku decided to share future profits in equal proportion. You are required to pass necessary journal entries to give effect to the above.

A, B and C were partners in a firm sharing profits in the ratio of 2 : 2 : 1. They admitted D for `1/6`th share in the profits. The new profit sharing ratio will be 13 : 8 : 4 : 5 respectively. D brought ₹ 5,00,000 for his capital and ₹ 60,000 for his share of goodwill. Pass necessary entries.

A and B are partners in a firm, and their profit sharing ratio is 2 : 1. C is admitted as a new partner for `1/4`th share in the profits. The following entry is passed when C brought ₹ 1,80,000 as his share of goodwill and credited to A and B:

Calculate the new profit sharing ratio.

X and Y are partners sharing profits in the ratio of 3 : 1. Z is admitted as a partner for `1/3`rd share in future profits. Following journal entry is passed at the time of Z's admission:

Ascertain the following:

1. Value of Firm's Goodwill,
2. Sacrifice or Gain by X and Y, and
3. New Profit Sharing Ratio of X, Y and Z.

Pass journal entries to record the following transactions on the admission of a new partner:

1. Land and Building is undervalued by ₹ 2,00,000.
2. Stock is overvalued by 20% (Book Value of Stock ₹ 60,000).
3. Provision to be made for compensation of ₹ 20,000 to an ex-employee.
4. Sundry Debtors appeared in the books at ₹ 1,50,000. They are estimated to produce not more than ₹ 1,30,000.
5. Creditors include an amount of ₹ 10,000 received as commission.
6. Value of Machinery is to be decreased to ₹ 1,20,000 (Вook Value ₹ 2,00,000).
7. Value of Machinery is to be decreased by ₹ 1,20,000 (Book Value ₹ 2,00,000).
8. Expenses on revaluation amount to ₹ 8,000 have been paid by partner X.

Ayushi and Shristhi are partners sharing profits in 3 : 2. Their Balance Sheet showed Stock at ₹ 3,10,000; Machinery at ₹ 4,95,000; Debtors at ₹ 6,00,000; Creditors at 3,47,000. They admit Tina as a partner, and a new profit-sharing ratio is agreed at 4 : 3 : 2. The following terms were agreed:

1. Machinery is overvalued by 10%.
2. Unrecorded debtors of ₹ 20,000 be brought into books and provision for doubtful debts be created at 10%.
3. Creditors of ₹ 27,000 are not likely to be paid.

Shristhi’s share in loss on revaluation amounted to ₹ 36,000. You are required to calculate the revalued value of stock.

Hint: Loss on Revaluation ₹ 90,000.

On the date of admission of a new partner, the Balance Sheet of a firm showed Debtors ₹ 5,00,000 and Provision for Doubtful Debts of ₹ 40,000.

You are required to pass necessary journal entries for treatment of Provision for Doubtful Debts on the date of admission in each of the following cases:

1. Bad Debts amounted to 30,000.
2. Bad Debts amounted to 45,000.

A and B were in partnership, sharing profits and losses in the ratio of 3 : 1. On 1st April, 2024, they admit C as a partner on the following terms:

1. That C brings ₹ 1,00,000 as his capital and ₹ 50,000 for goodwill, half of which to be withdrawn by A and B.
2. That the value of land and buildings is to be appreciated by 15 per cent and that of stocks and machinery and fixtures is to be reduced by 7 and 5 per cent, respectively.
3. That provision for doubtful debts be made at 5 per cent.
4. That ₹ 15,000 be provided for an unforeseen liability.
5. That C to be given `1/5`th share and the profit-sharing ratio between A and B to remain the same.
6. That ₹ 11,000 is to be received as commission, hence to be accounted for.

The Balance Sheet of the old partnership as at 31st March, 2024 stood as:

Give necessary Journal entries, ledger accounts and the balance sheet of the newly constituted firm.

Hints:

Khushi and Sukhi are partners in a firm sharing profits in the ratio of 5 : 4. On April 1, 2024, they admit Muskan as a new partner and the new ratio is agreed at 3 : 2 : 1. On that date there was a balance of ₹ 63,000 in the profit and loss account and a balance of ₹ 45,000 in general reserve. Record the necessary journal entries.

A and B were partners in a firm sharing profits in the ratio of 7 : 3. On 1-3-2024, they admitted C as a new partner for `1/6`th share in the profits of the firm. They fixed the new profit sharing ratio as 3 : 2 : 1. The P & L A/c on the date of admission showed a balance of ₹ 20,000 (Cr.). The firm also had a reserve of ₹ 1,50,000. C is to bring ₹ 40,000 as a premium for his share of goodwill.

Showing your calculations clearly, pass necessary journal entries to record the above transactions.

A and B sharing profits and losses in the ratio of 3 : 2, decide to admit C for `1/3`rd share. On this date, their Balance Sheet disclosed the following items:

Show the accounting treatment in the following cases:

Case (i) If the market value of investments is ₹ 2,90,000 Case (ii) If the market value of investments is ₹ 2,45,000 Case (iii) If the market value of investments is ₹ 3,00,000 Case (iv) If the market value of investments is ₹ 3,25,000

Charu and Deepika were partners sharing profits in the ratio of 3 : 2. They admitted Esha as a new partner and the new ratio is agreed at 4 : 3 : 2. On the date of Esha’s admission, the Balance Sheet of Charu and Deepika disclosed General Reserve ₹ 1,20,000; Dr. balance in Profit & Loss Account ₹ 40,000; Investments ₹ 2,00,000 and Investment Fluctuation Reserve ₹ 60,000.

The following was agreed upon Esha’s admission:

1. Esha will bring ₹ 3,00,000 as her Capital and her share of the goodwill premium in cash.
2. Goodwill of the firm be valued ₹ 1,80,000.
3. The market value of investments was ₹ 2,30,000.

Pass the necessary journal entries.

A, B and C were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as at 31st March, 2024 was as follows:

They admit D into partnership for `1/4`th share on 1st April, 2024. Give necessary journal entries to adjust the accumulated profits and losses.

Rani and Seeta were partners sharing profits in the ratio of 3 : 1. They admitted Mona as a new partner from 1st April, 2024. New profit sharing ratio is agreed at 3 : 2 : 1. On this date, their Balance Sheet disclosed the following items:

Partners decided to record the effect of the above items without affecting their book values. Pass the necessary adjusting entry.

Vimal and Nirmal are partners sharing profits in the ratio of 3 : 2. Following was the position of their business as at 31st March, 2024:

On 1st April, 2024, Kailash agrees to join the business on the following terms and conditions:

1. He will introduce ₹ 40,000 as his capital and pay ₹ 20,000 to the existing partners for his share of goodwill.
2. The new profit-sharing ratio will be 2 : 1 : 1 respectively for Vimal, Nirmal and Kailash.
3. A revaluation of assets will be made by reducing plant and machinery to ₹ 35,000 and stock by 10%. Provision of ₹ 1,000 is to be created for bad and doubtful debts.

Pass journal entries for the above arrangements and give the balance sheet of the newly constituted firm. Also specify the sacrificing ratio.

A and B are partners sharing profits in the ratio of 3 : 1. They admitted C as a partner by giving him 1/4th share of profits which he acquired from A and B in the ratio of 2 : 1. C brings in ₹ 1,00,000 as Capital and ₹ 36,000 as goodwill in cash. At the time of admission of C, general reserve appeared in their balance sheet at ₹ 50,000.

Following revaluation are also made:

1. Value of Plant is to be reduced by ₹ 10,000.
2. Bad Debts Provision is to be reduced from ₹ 4,000 to ₹ 3,000.
3. ₹ 2,000 Out of total Creditors of ₹ 20,000 are not to be paid.
4. There is an outstanding bill for repairs for ₹ 1,200.

Pass necessary journal entries and prepare a Revaluation Account. Also calculate the new profit sharing ratios.

X and Y share profits in the ratio of 5 : 3. Their balance sheet as at 31st March, 2024, was as follows:

They admit Z into partnership on 1st April, 2024 with `1/8`th share in profits. Z brings ₹ 20,000 as his capital and ₹ 12,000 for goodwill in cash. Z acquires his share entirely from X. Following revaluations are also made:

1. Provident fund is to be increased by ₹ 5,000.
2. Debtors are all good. Therefore, no provision is required on debtors.
3. Stock includes ₹ 3,000 for obsolete items.
4. Creditors are to be paid ₹ 1,000 more.
5. Fixed Assets are to be revalued at ₹ 70,000.

Prepare Journal entries, necessary accounts and a new balance sheet. Also calculate the new profit-sharing ratio.

X and Y are partners. They admit Z as a partner and a new profit-sharing ratio is agreed at 3 : 2 : 1. Z brings in Capital of ₹ 1,50,000 and ₹ 40,000 as a premium for goodwill in Cash.

Their Balance Sheet was as follows:

The assets and liabilities are revalued as under:

1. Provision for Doubtful Debts is found in excess by ₹ 4,000.
2. Building was found under valued by 20% and Machinery overvalued by 20%.
3. Part of the stock which had been included at a cost of ₹ 10,000 had been badly damaged in storage and could only expect to realise ₹ 2,000.
4. Creditors were written off ₹ 6,000.

Pass necessary journal entries.

Hint:

No. (ii) Dr. Building A/c and Cr. Revaluation A/c by ₹ 50,000
Dr. Revaluation A/c and Cr. Machinery A/c by ₹ 20,000

No. (iii) Dr. Revaluation A/c and Cr. Stock A/c by ₹ 8,000.

A and B are partners sharing profits in 3 : 1. Their Balance Sheet as at 31st March, 2024 stood as follows:

On 1st April, 2024 they admit C as a new partner on the following terms:

1. The new profit-sharing ratio of A, B and C will be 3 : 2 : 1.
2. Land and Buildings are undervalued by 10%.
3. All debtors are good.
4. C to bring in ₹ 5,00,000 as Capital and his share of goodwill amounting to ₹ 60,000 in cash.

You are required to prepare Partner’s Capital Accounts.

Aman and Biswas were partners sharing profits and losses in the ratio of 3 : 2. They admitted Chetan as a new partner for 25% share. Balance sheet of Aman and Biswas was as follows as at March 31, 2023.

Chetan was admitted on the following terms:

1. Market value of Investment is ₹ 20,000.
2. There was a bad debt amounting to ₹ 6,000 and provision for Doubtful Debts is to be maintained at ₹ 9,000.
3. Building was undervalued by 20%.
4. Stock was overvalued by 20%.
5. Goodwill of the firm was valued at ₹ 1,00,000 and Chetan brings his share of goodwill in cash.
6. Chetan was to bring ₹ 1,30,000 as capital.

Prepare the Revaluation Account and Partner’s Capital Accounts.

X and Y are partners in a firm sharing profits and losses in the ratio of 5 : 3. On 31st March 2024, their Balance Sheet was as under:

On 1st April, 2024, Z is admitted as a partner. X surrenders `1/4`th of his share and Y `1/3`rd of his share in favour of Z. Goodwill is valued at ₹ 1,60,000. Z brings in only `2/5`th of his share of goodwill in cash and ₹ 1,50,000 as his capital. Following terms are agreed upon:

1. Premises is to be increased to ₹ 2,00,000 and stock by ₹ 5,000.
2. Creditors proved at ₹ 60,000, one bill for goods purchased having been omitted from the books.
3. Outstanding rent amounted to ₹ 12,000 and prepaid salaries ₹ 2,000.
4. Liability on account of provident fund was only ₹ 10,000.
5. Liability for Workmen's Compensation Claim was ₹ 16,000.

Prepare Revaluation A/c, Capital A/cs and the opening Balance Sheet. Also calculate the new profit sharing ratios.

Hint: Premium for Goodwill A/c will be debited by ₹ 18,000 and Current Account of Z will be debited by ₹ 27,000 and Capital Accounts of X and Y will be credited in the sacrificing ratio of 5 : 4.

Hemant and Nishant were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were ₹ 1,50,000 and ₹ 1,30,000 respectively. They admitted Somesh on 1st April, 2024 as a new partner for a `1/5` share in the future profits. Loss on Revaluation amounted to ₹ 20,000. Somesh brought ₹ 1,20,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Somesh’s admission.

X and Y are partners with capital of ₹ 13,00,000 and ₹ 20,00,000. They share profits in the ratio of 1 : 2. They admit Z as a partner with `1/5`th share in the profits of the firm. Z brings in ₹ 12,00,000 as his share of capital. The 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.

Hint: The Balance of P & L will be credited to the Capital Accounts of X and Y and hidden goodwill will be calculated thereafter.

A, B and C were partners in a firm sharing profits in the ratio of 2 : 1 : 1. The value of the total assets of the firm was ₹ 8,00,000 and outside liabilities were valued at ₹ 1,20,000 as at that date. On 1st April, 2024 they admitted D as a new partner. D brought ₹ 2,00,000 for his capital and the necessary amount for his share of the 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.

A, B and C are partners sharing profits and losses in the ratio of 6 : 3 : 1. Their respective capitals are A ₹ 5,00,000; B ₹ 4,00,000 and C ₹ 2,00,000. They decide to admit D into partnership and the new profit-sharing ratio is agreed at 3 : 3 : 3 : 1.

D brings ₹ 1,50,000 as his capital and his share of goodwill in cash. At the time of D's admission:

1. The firm had a Workmen Compensation Reserve of ₹ 1,00,000 against which there was a claim of ₹ 1,20,000.
2. Advertisement The Suspense A/c (Dr.) balance appeared in their books at ₹ 30,000.
3. Contingency Reserve appeared at ₹ 60,000.

You are required to prepare necessary journal entries.

Nem and Khem, sharing profits in the ratio of 3 : 2 admit Prem as a partner with `1/3` share in profits. He had to contribute proportionate capital. They had the following financial position:

They agreed to admit Prem as a partner on the following terms:

1. Plant and Machinery to be reduced by 10%.
2. Stock to be increased by ₹ 3,000.
3. Bad debts provision was to be created at 5%.
4. Accrued incomes not appearing in the books ₹ 900.
5. Prem was to introduce ₹ 20,000 as a premium for goodwill for a `1/3`rd share of the future profits of the firm.

Prepare Profit and Loss Adjustment Account, Capital Accounts and Balance Sheet of the new firm. Also calculate the new profit-sharing ratio.

Hint: Calculation of Prem’s Capital:

Combined Capital of Nem and Khem for `2/3` share of Profits

= 87,740 + 65,160

= ₹ 1,52,900

Therefore, the total Capital of the new firm will be

= `1,52,900 xx 3/2`

= ₹ 2,29,350

Prem’s Capital for `1/3`rd share = `2,29,350 xx 1/3`

= ₹ 76,450

Mohan and Sohan are in partnership sharing profits in the proportion of `3/5 and 2/5` respectively. The Balance Sheet is as follows:

They decide to admit Rohan to 1/3rd share on the terms that he is to pay into the business ₹ 1,00,000 as Goodwill and sufficient capital to give him 1/3rd share of the total capital of the new firm.

It was agreed that Provision for bad debts to be maintained @10% on debtors, that the stock be revalued at ₹ 2,00,000; and that the plant be reduced to ₹ 50,000.

Prepare necessary ledger accounts and show the balance sheet of the new partnership.

Soma and Navya were partners sharing profits in the ratio of 2 : 1. Ananya was admitted as a partner for `1/5`th share in profits. Following balances appeared in the books of the firm on that day.

Debtors worth ₹ 10,000 became bad. It was decided to create 4% provision on doubtful debts.

Pass necessary journal entries.

A and B are partners sharing profits in the proportion of 3 : 2. Their Balance Sheet as at 31st March, 2024 was as follows:

They agree to admit C as a new partner on the following terms:

1. C will be given a `2/9`th share of profit and he will bring ₹ 50,000 for his share of capital and goodwill.
2. Goodwill of the firm will be calculated at `2 1/2` years’ purchase of the average super profits of the last four years. Profits of the last four years are ₹ 40,000, ₹ 40,000, ₹ 55,000, and ₹ 65,000, respectively. Normal profits that can be earned with the capital employed are ₹ 14,000.
3. Half the amount of goodwill is withdrawn by old partners.
4. 15% of the general reserve is to remain as a provision against doubtful debts.
5. Outstanding salaries will be increased to ₹ 16,000. Stock is overvalued by 25% and Building is undervalued by 25%. Trade Marks be written off by 50%.
6. The New profit sharing ratio of partners will be 4 : 3 : 2 and the capital accounts of A and B will be adjusted on the basis of C’s capital by bringing in or withdrawing cash, as the case may be.

Prepare the necessary accounts and the opening balance sheet of the firm.

Hints:

(i) Actual Value of Stock = `40,000 xx 100/125`

= ₹ 32,000

(ii) Actual Value of Building = `75,000 xx 100/75`

= ₹ 1,00,000

Ashok and Biju were partners sharing profits and losses in the ratio of 3 : 1 respectively. The following was their balance sheet as at 31st March, 2024:

On 1st April, 2024, Chandra was admitted to the firm on the following terms:

1. Chandra would provide ₹ 1,00,000 as a capital and pay ₹ 20,000 as goodwill for his one-third share in future profits.
2. Ashok, Biju and Chandra would share profits equally.
3. Machinery would be reduced by 10% and ₹ 5,000 would be provided for bad debts. Stock would be valued at ₹ 2,49,400.
4. Capital accounts of old partners would be adjusted in the profit sharing ratio on the basis of Chandra's capital by bringing in or taking out cash.

Pass necessary journal entries and prepare partner's capital accounts and balance sheet of the new firm.

Hint: Ashok sacrifices `5/12`; Biju Gains `1/12`.

Chandra's `1/3` share of goodwill = ₹ 20,000. Hence, total goodwill = ₹ 20,000 × 3 = ₹ 60,000. Biju has to compensate `1/12` of 60,000 i.e., 5,000 to Ashok by way of goodwill.

Entry for Goodwill:

A and B are partners sharing profits in the ratio of 5 : 3. C was admitted for `1/4`th share in profits. C acquires this share as `3/16` from A and `1/4`th of his share from B. C brings in ₹ 1,00,000 as his capital.

At the time of C’s admission:

1. The firm’s goodwill was valued at ₹ 2,40,000.
2. General Reserve was ₹ 40,000.
3. Profit on revaluation of assets and liabilities was ₹ 24,000.

Before any adjustments were made, the Capitals of A and B were ₹ 1,20,000 and ₹ 70,000, respectively.

It is decided that after C’s admission, the Capitals of A and B be adjusted on the basis of C’s Capital, any excess or shortfall to be adjusted by withdrawing or bringing in Cash by the old partners. You are required to pass necessary journal entries on C’s admission.

Hint: Sacrificing Ratio 3 : 1; New Ratio 7 : 5 : 4

Om, Ram and Shanti were partners in a firm sharing profits in the ratio of 3:2:1. On 1st April 2014 their Balance Sheet was as follows:

On the above date Hanuman was admitted on the following terms:

1) He will bring Rs 1,00,000 for his capital and will get the 1/10th share in the profits.

2) He will bring necessary cash for his share of goodwill premium. The goodwill of the firm was valued at Rs 3,00,000

3) A liability of Rs 18,000 will be created against bills receivables discount

4) The value of stock and furniture will be reduced by 20%.

]5) The value of land and building will be increased by 10%.

6) Capital accounts of the partners will be adjusted on the basis of Hanuman's capital in their profit sharing ratio by opening current accounts.

Prepare Revaluation Account and Partner's Capital Accounts.

Following is the Balance Sheet of Amit and Vidya as at 31st March, 2024:

On the above date, Chintan was admitted as a partner for 1/4th share in the profits of the firm with the following terms:

1. ₹ 2,900 will be written off as Bad Debts.
2. Stock was taken over by Vidya at ₹ 35,000.
3. Goodwill of the firm was valued at ₹ 40,000. Chintan brought his share of goodwill premium in cash.
4. Chintan brought proportionate capital and the capitals of the other partners were adjusted on the basis of Chintan's Capital. For this necessary cash was to be brought in or paid off to the partners as the case may be.

Prepare Revaluation Account and Partners' Capital Accounts.

Rekha, Sunita and Teena are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Samiksha joins the firm. Rekha surrenders `1/4`th of her share; Sunita surrenders `1/3`rd of her share and Teena `1/5`th of her share in favour of Samiksha. Find the new profit-sharing ratio.

Calculate sacrificing ratios in the following cases:

1. X and Y are sharing profits in the ratio of 4 : 3. Z joins and the new ratios are 7 : 4 : 3.
2. X and Y are sharing profits in the ratio of 7 : 5. Z joins and the new ratios are 13 : 7 : 4.
3. A and B are sharing profits in the ratio of 5 : 3. C joins and the new ratios are 4 : 2 : 1.
4. A and B are sharing profits in the ratio of 3 : 2. C joins and the new ratios are 5 : 3 : 2.

Calculate new ratios and sacrificing ratios in the following cases:

1. A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. D is admitted for `1/3`rd share.
2.  A, B and C are partners sharing profits in the ratio of `1/2`, `1/3` and `1/6`. D is admitted for a `1/6`th share of profits.
3. A, B and C are partners sharing profits in the ratio of `6/14`, `5/14`, and `3/14`. D is admitted for `1/8`th share of profits.

Rohan and Mohan are partners in a firm sharing profits in the ratio of 5 : 3 respectively. They admit Bhim as a partner for `1/7`th share in the profit. The new profit sharing ratio will be 4 : 2 : 1. Calculate the sacrificing ratio of Rohan and Mohan.

Amla and Kamla are partners in a firm sharing profits in the ratio of 4 : 1 respectively. They admitted Bimla as a new partner for `1/4`th share in the profits, which she acquired wholly from Amla. Determine the new profit sharing ratio of the partners.

Anita and Tina are partners sharing profits as 9 : 5. They agree to admit Chetan their manager into partnership, who is to get 1/8 share in the profits. He acquires this share as 1/12 from Anita and 1/24 from Tina. Calculate new profit sharing ratio.

Anil and Sunil are partners sharing profits in the ratio of 4 : 1. They admit Vijay into partnership with 1/3 share in profits which he acquires wholly from Anil. Calculate the new profit sharing ratio.

J & K are partners in a firm sharing profits in the ratio of 2 : 3. L joins the firm. J surrenders `1/5`th of his share and K, `1/3` of his share in favour of L. Find the new profit-sharing ratio.

R and S are partners sharing profits in the ratio of 5 : 3. T was admitted. R surrenders 1/4 of his share and S 2/5 of his share in favour of T. Calculate the sacrificing ratio and the new ratios.

A and B are partners sharing profits and losses in the ratio of 5 : 3. They admit C into partnership giving him 1/4 share in profits which he acquires from A and B in the ratio of 3 : 1. Calculate the new profit sharing ratio.

Mohan and Sohan are partners sharing profits and losses in the ratio of 9 : 6. They admit Gopal with 1/8 share in the profits. The new profit sharing ratio between Mohan and Sohan is agreed to be 4 : 3. Calculate the sacrificing ratio.

Kabir and Farid are partners in a firm sharing profits in the ratio of 3 : 1 on 1-4-2019 they admitted Manik into partnership for `1/4`th share in the profits of the firm. Manik brought his share of goodwill premium in cash. Goodwill of the firm was valued on the basis of 2 years’ purchase of the last three years’ average profits. The profits of the last three years were:

During the year 2018-19, there was a loss of ₹ 20,000 due to fire, which was not accounted for while calculating the profit. Calculate the value of goodwill and pass the necessary journal entries for the treatment of goodwill.

Hint: Loss due to fire of ₹ 20,000 will be ignored since it has not been considered while calculating the profit.

On 1st April, 2025, A and B, sharing profits 2/3 and 1/3 respectively, agree to admit C into partnership on condition that he pays ₹ 3,00,000 as capital and ₹ 90,000 for 1/6 share of goodwill which he acquires equally from A and B. Subsequently, half amount of goodwill is withdrawn by the old partners.

Give journal entries necessary to record these transactions.

Kumar and Rao were partners in a firm sharing profits equally. They admitted Ghosh as a new partner for 1/4th share in profits. Ghosh acquired his 1/4th share from Kumar and Rao in the ratio of 3 : 2 respectively. Ghosh brought ₹ 2,70,000 for his capital and ₹ 39,000 for 1/4th share of goodwill. Calculate new profit sharing ratio of Kumar, Rao and Ghosh and pass necessary journal entries for the above transactions in the books of the firm.

Piyush and Deepika are partners sharing profits in the ratio 7 : 3. They admit Seema as a new partner, paying ₹ 40,000 as premium for 1/5 share. The new ratio being 5 : 3 : 2. Pass journal entries.

P and Q are in partnership sharing profits in the ratio of 5 : 3. They admit R into the firm, R paying a premium of ₹ 1,00,000 for 1/4 share of the profits. As between themselves, P and Q agree to share future profits and losses equally. Pass entries.

X and Y are partners sharing profits and losses in the ratio of 6: 9. They agree to admit Z into partnership who brings 1,00,000 in cash for his capital and goodwill. Goodwill is valued at `1 1/2` year's purchase of the last 4 years average profits, which were ₹ 30,000; ₹ 8,000 (loss); ₹ 20,000 and ₹ 38,000 respectively. X, Y and Z will share future profits in equal proportion. Pass entries.

Arun and Varun are partners sharing profits in the ratio of 3 : 2. Bhushan is admitted paying a premium of ₹ 84,000 for 1/4th share of profits which he acquires 1/6th from Arun and 1/12th from Varun. Calculate new ratios and pass entries.

L and M were partners in a firm sharing profits in 4 : 3 ratio. They admitted O as a new partner. The new profit sharing ratio of L, M and O will be 3 : 3 : 4. O brought ₹ 2,00,000 for his capital. The goodwill of the firm on O's admission was valued at ₹ 70,000. O brought his share of goodwill in cash. Calculate sacrificing ratio of L and M and pass necessary journal entries for the above transactions on O's admission.

A and B are partners sharing profits and losses in the proportion of 3 : 2. They agree to admit C into partnership who is to get 1/5th share in the business. C brings in ₹ 1,00,000 for his capital and ₹ 40,000 for 1/5th share of goodwill which he acquires 3/20 from A and 1/20 from B. The profit for the first year of the new partnership amounted to ₹ 2,00,000.

Make the necessary Journal entries in connection with C's admission and apportion the profit between the partners.

P and share profits in the ratio of P, 5/8 and Q, 3/8. R is admitted as а partner who brings in ₹ 60,000 as his capital and ₹ 20,000 for goodwill. The new profit-sharing ratio is agreed at 7 : 5 : 4. Draft Journal entries.

A and B are partners sharing profits in the ratio of 3 : 2. They admit C into partnership; C pays a premium of ₹ 60,000 for a `1/4`th share of profit. The new ratio is 3 : 3 : 2. Goodwill account appears in the books at ₹ 2,00,000. Give the necessary Journal entries.

A and B are partners sharing profits and losses in the ratio of 3 : 2 respectively. Goodwill appears in their books at ₹ 3,00,000. They admit C into partnership. C paying a premium of ₹ 1,00,000 for one-fourth share of the profits while A and B as between themselves sharing profits and losses as before.

Give Journal entries to record the above arrangement in the books of the firm.

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 `1/4`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:

The following additional information is given:

1. To cover management cost an annual charge of ₹ 56,250 should be made for the purpose of valuation of goodwill.
2. The closing stock for the year ended 31.3.2017 was overvalued by ₹ 15,000.

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

Hints:

A management cost of ₹ 56,250 will be deducted from each year’s profit.

Overvaluation of Closing Stock will be deducted from the profit of 2016-17.

X and Y are partners sharing profits in the ratio of 2 : 1. Their books showed goodwill at ₹ 50,000. Z is admitted with 1/5th share of profits which he acquires equally from X and Y. He brings ₹ 7,50,000 as his capital but is not able to bring in cash his share of goodwill ₹ 40,000. Give Journal entries.

A and B are partners sharing profits in the ratio of 5 : 3. They admit C as a partner for a `1/3`rd share. His share of Goodwill is ₹ 32,000. Give journal entries in the following cases:

1. When the amount of goodwill is paid privately.
2. When the goodwill is received in cash and retained in the business.
3. When the goodwill is received in cash and withdrawn by old partners.
4. When C is unable to bring the goodwill in cash.

Hint:

In case (a) there will be no entry for goodwill.
In case (b) and (c), Premium A/c will be debited by ₹ 32,000 and the Capital A/cs of A and B will be credited in 5 : 3.
In case (d) Current A/c of C will be debited by ₹ 32,000, and the capital A/cs of A and B will be credited in 5 : 3.

Sharan and Angad are partners in a firm sharing profits and losses in the ratio of 3 : 2.

On 1st April, 2022, they admit Akhil as a partner for `1/5`th share in the profits. Akhil acquires `1/5` of his shares from Sharan and the balance from Angad.

On the date of Akhil’s admission, the goodwill of the firm was valued at ₹ 90,000. Akhil contributed the following assets towards his capital and his share of goodwill:

You are required to:

1. Calculate the sacrificing ratio of the partners.
2. Pass the necessary journal entries on Akhil’s admission, ascertaining Akhil’s capital contribution and assuming that he brings into the firm his share of goodwill in cash/kind.

A and B are partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits. C brings ₹ 30,000 for his capital and ₹ 8,000 out of his share of ₹ 10,000 for goodwill. Before admission goodwill appeared in books at ₹ 18,000. Give Journal entries to give effect to above arrangement.

Hint: 

1. Goodwill of ₹ 18,000 written off by A and B in 2 : 1.
2. Goodwill of ₹ 8,000 brought in cash by C will be credited to Premium for Goodwill A/c.
3. Premium for Goodwill A/c will be debited by ₹ 8,000 and C's Current A/c will be debited by ₹ 2,000 and Capital Accounts of A and B will be credited in 2 : 1.

J and R are partners. V is admitted as a partner for 1/4 share of profit but is unable to contribute premium for goodwill in cash amounting to ₹ 80,000 and so it is decided to raise a loan account in the name of V.

You are required to pass a single journal entry in order to give effect the above problem.

Arjun and Vinod are partners sharing profits in the ratio of 3 : 1. They admitted a new partner Prabhakar.

Arjun sacrificed `1/3`rd of his share to Prabhakar and Vinod gifted `1/5`th of his share to Prabhakar. Firm's goodwill on the date of Prabhakar's admission was valued at ₹ 3,60,000.

Ascertain the new profit sharing ratio of the partners and pass the journal entry for premium for goodwill, if Prabhakar is unable to bring his share of goodwill in cash.

A and B share profits in the proportions of 3/4 and 1/4. Their Balance Sheet as at March 31, 2025 was as follows:

On April 1, 2025, C was admitted into partnership for 1/4th share on the following terms:

1. That C pays ₹ 1,00,000 as his capital.
2. That C pays ₹ 50,000 for goodwill. Half of this sum is to be withdrawn by A and B.
3. That stock and fixtures be reduced by 10% and a 5% provision for doubtful debts be created on Sundry Debtors and Bills Receivable.
4. That the value of land and buildings be appreciated by 20%.
5. There being a claim against the firm for damages, a liability to the extent of ₹ 10,000 should be created.
6. An item of ₹ 6,500 included in sundry creditors is not likely to be claimed and hence should be written back.

Record the above transactions (journal entries) in the books of the firm assuming that the profit sharing ratio between A and B has not changed. Prepare the new Balance Sheet on the admission of Mr. C.

A and B share the profits of a business in the ratio of 5 : 3. They admit C into the firm for a `1/4`th share in the profits to be contributed equally by A and B. On the date of admission of C, the Balance Sheet of the firm was as follows:

Terms of C’s admission were as follows:

1. C will bring ₹ 3,30,000 for his share of capital and goodwill.
2. Goodwill of the firm has been valued at 4 years’ purchase of the average super profits of the last three years. Average profits of the last three years are ₹ 2,20,000 while the normal profits that can be earned with the capital employed are ₹ 1,40,000.
3. Furniture is to be appreciated by ₹ 60,000 and the value of stock is to be reduced by ₹ 20,000.
4. Outstanding Expenses will be paid off.

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

A and B were partners with fixed capitals of ₹ 3,70,000 each. They admitted C as a new partner for a `1/4`th share of profits. C brought ₹ 3,00,000 as his capital and the necessary amount of goodwill premium for his share of goodwill. The new profit-sharing ratio will be 2 : 1 : 1.

Pass necessary journal entries for the above transactions in the books of the firm.

Leena and Rohit are partners in a firm sharing profits in the ratio of 3 : 2. On 31st March, 2018, their Balance Sheet was as follows:

On the above date Manoj was admitted as a new partner for `1/5`th share in the profits of the firm on the following terms:

1. Manoj brought proportionate capital. He also brought his share of the goodwill premium of ₹ 80,000 in cash.
2. 10% of the general reserve was to be transferred to provision for doubtful debts.
3. Claim on account of workmen’s compensation amounted to ₹ 40,000.
4. Stock was overvalued by ₹ 16,000.
5. Leena, Rohit and Manoj will share future profits in the ratio of 5 : 3 : 2.

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

Shikha, Shweta and Manisha were partners sharing profits and losses in the ratio of 5 : 3 : 2. They admitted Pooja into partnership for a 25% share. Shikha, Shweta and Manisha decided to share future profits and losses equally. Pooja brings in Capital of ₹ 8,00,000 and ₹ 1,50,000 out of her goodwill share of ₹ 2,50,000. Pass necessary entries at the time of Pooja’s admission.

On 31st March, 2019 the Balance Sheet of Madan and Mohan who share profits and losses in the ratio of 3 : 2 was as follows:

They decided to admit Gopal on 1st April, 2019 for `1/5`th share, which Gopal acquired wholly from Mohan on the following terms:

1. Gopal shall bring ₹ 10,000 as his share of the premium for Goodwill.
2. A debtor whose dues of ₹ 3,000 were written off as bad debt paid ₹ 2,000 in full settlement.
3. A claim of ₹ 5,000 on account of workmen’s compensation was to be provided for.
4. Patents were undervalued by ₹ 2,000. Stock in the books was valued 10% more than its market value.
5. Gopal was to bring in capital equal to 20% of the combined capitals of Madan and Mohan after all adjustments.

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

Rajat and Ravi are partners in a firm sharing profits and losses in the ratio of 7 : 3. Their Balance Sheet as at 31st March, 2024 is as follows:

On 1st April, 2024, 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 1/4 share in profits.
2. Stock is to be reduced by 40% and furniture is to be reduced to 40%.
3. Capitals of the partners shall be proportionate to their Profit-Sharing Ratio taking Rohan's Capital as base. Adjustment of Capitals to be made by cash.

Requirements: Prepare Revaluation Account, Partners' Capital Accounts and Cash Account.

Balance Sheet as at 31st March, 2024 of Ramesh, Kumar and Pappu, who were sharing profits and losses in the ratio of 2 : 3 : 5.

On 1st April, 2024 they admit Shilpa into partnership on the following terms:

1. Furniture, Investments and Machinery to be reduced by 15%.
2. The value of stock to be taken is at ₹ 48,000.
3. Shilpa will bring in ₹ 26,000 as her share of goodwill.
4. Shilpa to bring ₹ 32,000 towards capital for a `1/6`th share and old partners to adjust their capitals accordingly.
5. Outstanding rent amounted to ₹ 1,800.
6. Prepaid salaries ₹ 800.
7. Adjustments of capital to be made by cash.

Prepare Revaluation Account, Capital Accounts, Cash Account and the Balance Sheet of the new firm.

On 31-3-2024 the Balance Sheet of W and R, who shared profits in 3 : 2 ratio was as follows:

On 1st April, 2024 B was admitted as a partner on the following conditions:

1. B will get `4/15`th share of profits.
2. B had to bring ₹ 30,000 as his capital, to which amount other Partners capitals shall have to be adjusted.
3. He would pay cash for his share of goodwill, which would be based on `2 1/2` years’ purchase of average profits of the past 4 years.
4. The assets would be revalued as under:
   Sundry debtors at book value, less 5% provision for bad debts. Stock at ₹ 20,000, Plant and Machinery at ₹ 40,000.
5. The profits of the firm for the years 2021, 2022, and 2023 were ₹ 20,000, ₹ 14,000, and 17,000, respectively.

Prepare the Revaluation Account, Partner’s Capital Accounts, and the Balance Sheet of the new firm.

Hint:

Average Profits = `(20,000 + 14,000 + 17,000 + 15,000  "(Given in Balance Sheet)")/4`

= ₹ 16,500

Value of Goodwill = `16,500 xx 2 1/2`

= ₹ 41,250

B’s Share in Goodwill = `41,250 xx 4/15`

= ₹ 11,000

A and B are partners sharing profits in the ratio of 2 : 3. Their balance sheet as at 31st March, 2024 was as follows:

On 1st April, 2024 they admitted C for a `1/5` share in profits, which he acquires wholly from B. The other terms of agreement were:

1. Goodwill of the firm was to be valued at two years’ 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. Provision 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 accounts.

Prepare journal entries, capital accounts and the opening balance sheet.

Hint: No entry will be passed for ₹ 5,000. Only the following entry will be passed in respect of damages:

Juliet and Rabani are partners in a firm, sharing profits and losses in the ratio of 3 : 1. On 31st March, 2016, their Balance Sheet was as under:

Mike was taken as a partner for a `1/4`th share, with effect from 1st April, 2016, subject to the following adjustments:

1. Plant and Machinery was found to be overvalued by ₹ 16,000. It was to be shown in the books at the correct value.
2.  Provision for Doubtful Debts was to be reduced by ₹ 2,000.
3. Creditors included an amount of ₹ 2,000 received as commission from Malini. The necessary adjustment was required to be made.
4. Goodwill of the firm was valued at ₹ 60,000. Mike was to being in cash, his share of goodwill along with his capital of ₹ 1,00,000.
5. Capital Accounts of Juliet and Rabani were to be readjusted in the new profit-sharing arrangement on the basis of Mike’s capital, any surplus to be adjusted through the current account and any deficiency through cash.

You are required to prepare:

1. Revaluation Account,
2. Partner’s Capital Accounts, and
3. Balance Sheet of the reconstituted firm.

X and Y were partners in the profit-sharing ratio of 3 : 2. Their balance sheet as at March 31, 2022 was as follows:

Z was admitted for 1/6th share on the following terms:

1. Z will bring ₹ 56,000 as his share of capital but was not able to bring any amount to compensate the sacrificing partners.
2. Goodwill of the firm is valued at ₹. 84,000.
3. Plant and Machinery were found to be undervalued by ₹ 14,000 Building was to be brought up to ₹ 1,09,000.
4. All debtors are good.
5. Capitals of X and Y will be adjusted on the basis of Z’s share and adjustments will be done by opening necessary current accounts.

You are required to prepare revaluation account and partners’ capital account.

A and B were partners in a firm sharing profits and losses in the ratio of 3 : 1. On 31.03.2022, their Balance Sheet was as follows:

On the above date, C was admitted as a new partner for `1/5` share in the profits on the following terms:

1. C will bring ₹ 2,00,000 as her capital and ₹ 1,60,000 as her share of goodwill premium.
2. Stock will be appreciated by ₹ 1,500.
3. Debtors of ₹ 5,000 will be written off as bad debts and a provision of 10% for bad and doubtful debts will be maintained.

Prepare Revaluation Account and Partner’s Capital Accounts.

Hint:

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

With an aim to expand business it is decided to admit Ranvijay as a partner on 1^st April 2023 on the following terms:

1. Provision for doubtful debts is to be increased to 6% of debtors.
2. An outstanding bill for repairs ₹ 50,000 to be accounted in the books.
3. An unaccounted interest accrued of ₹ 7500 be provided for.
4. Investment were sold at book value.
5. Half of stock was taken by Rajinder at ₹ 42,000 and remaining stock was also to be revalued at the same rate.
6. New profit-sharing ratio of partners will be 5:3:2.
7. 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 31^st March 2023, 2022 and 2021 were ₹ 1,50,000, ₹ 1,30,000 and ₹ 1,70,000 respectively.

Pass necessary journal entries.

Uma and Umesh were partners in a firm sharing profits and losses in the ratio of 2 : 3. On 31st March, 2024, their Balance Sheet was as follows:

On the above date, Daya was admitted as a new partner on the following terms:

1. The new profit-sharing ratio of Uma, Umesh and Daya will be 3 : 2 : 5.
2. Daya will bring ₹ 10,00,000 as her capital and ₹ 2,00,000 as her share of goodwill premium.
3. The value of Land and Building will be increased by ₹ 2,00,000.
4. Liability against Workmen Compensation was estimated at ₹ 35,000.
5. ₹ 3,000 bad debts will be written off and a provision for bad and doubtful debts created @ 5% of debtors.
6. Outstanding electricity bill will be paid off.

Pass necessary journal entries for the above transactions on Daya's admission.

Karan and Arjun were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2024, their Balance Sheet was as follows:

On 1st April, 2024, Nakul was admitted into the partnership for 1/4th share in the profits of the firm on the following terms:

1. Nakul brought ₹ 4,00,000 as his capital and his share of goodwill premium in cash. Goodwill of the firm was valued at ₹ 2,00,000.
2. Furniture was valued at ₹ 2,50,000.
3. A provision for doubtful debts @ 10% is to be maintained on debtors.
4. The liability against Workmen's Compensation Reserve was estimated at ₹ 1,20,000.
5. After the above adjustments, the capitals of Karan and Arjun were to be adjusted taking Nakul's capital as the base. Excess or shortage in the capital accounts of Karan and Arjun was to be adjusted by opening current accounts.

Prepare Revaluation Account and Partners' Capital Accounts.

State Whether the following Statement is True or False:

When new partner does not bring his share of goodwill in cash, goodwill account is debited.

State Whether the following Statement is True or False:

When new partner does not bring his share of goodwill in cash, his current account will be debited.

State Whether the following Statement is True or False:

Revaluation Account is debited from all incomes.

State Whether the following Statement is True or False:

A new partner is liable for the past losses of a firm.

State Whether the following Statement is True or False:

Revaluation Account is opened when the value of assets and liabilities are changed.

State Whether the following Statement is True or False:

Unrecorded liabilities are recorded on the debit side of Revaluation Account.

State Whether the following Statement is True or False:

All accumulated profits and losses are transferred to the Revaluation Account at the time of admission of a partner.

State Whether the following Statement is True or False:

If the incoming partner brings the amount of goodwill in cash then the same is distributed among the old partners in their new profit sharing ratio.

State Whether the following Statement is True or False:

When capitals of the partners are fixed, then their current accounts are opened.

State Whether the following Statement is True or False:

Unless otherwise stated, the ratio of sacrifice is equal to old profit sharing ratio.

State Whether the following Statement is True or False:

New profit sharing ratio is the difference of old ratio and sacrificing ratio.

State Whether the following Statement is True or False:

The balance of Revaluation Account is transferred to all partner's capital accounts including new partner.

State Whether the following Statement is True or False:

Increase in the value of liabilities is a loss on revaluation.

State Whether the following Statement is True or False:

Decrease in the value of assets is a loss on revaluation.

State Whether the following Statement is True or False:

Revaluation Account is akin to a Profit and Loss Adjustment Account.

State Whether the following Statement is True or False:

A and B are in partnership sharing profits and losses in the ratio of 3 : 2. They admit C into partnership with 1/5th share which he acquires equally from A and B. New profit sharing ratio will be 5 : 3 : 2.

State Whether the following Statement is True or False:

Amit, a partner in a partnership firm withdrew ₹ 7,000 in the beginning of each quarter. Interest on drawings will be charged for 4.5 months.

Consent of ______ partners is required for the admission of a new partner.

If the firm is following fixed capital accounts method, profit or loss on revaluation is transferred to Partner's ______ accounts.

At the time of admission, if the book value and market value of investments is same, Investment Fluctuation Reserve is transferred to ______ accounts of the old partners in their ______ ratio.

At the time of admission of a partner, if an unrecorded liability is recognized, it is ______ to ______ Account.

Goodwill of the firm is valued at ₹ 2,00,000. Goodwill also appears in the books at ₹ 80,000. Kanishk is admitted for 1/4th share. The amount of goodwill brought in by Kanishk will be ______.

P, Q and R are partners sharing profits in 3 : 2 : 1. They admit S as partner. P, Q and R surrender 1/3rd, 1/6th and 1/9th share of their respective profits. The share of profit of S will be ______.

A and B are partners. C is admitted for 1/7th share. New profit sharing ratio will be ______.

At the time of admission of new partner, creditors overvalued are ______ to Revaluation Account.

At the time of admission of new partner, reduction in provision for doubtful debts will be ______ to Revaluation Account.

______ ratio is calculated at the time of admission of a partner.

At the time of admission of a partner, Advertisement Suspense A/c appearing in Balance Sheet will be transferred to ______.

A and B are partners in the ratio of 2 : 1. C is admitted into the firm. А surrenders 1/5th of his share and B surrenders 1/15 from his share in favour of C. C's share will be ______.

A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted for 1/6th share. It is agreed that C will retain his original share. New profit sharing ratio will be ______.

A and B are partners with capitals of ₹ 50,000 each. They admit C for 1/4th share. C brings in ₹ 80,000 as his share of capital. Profit and Loss A/c showed a credit balance of ₹ 30,000 on that date. Value of Hidden goodwill will be ______.

A and B are partners in a firm. They admit C as a partner with 1/5th share in the profits of the firm. C brings ₹ 4,00,000 as his share of capital. Their Balance Sheet shows that A's capital is ₹ 5,00,000 and B's capital is ₹ 3,50,000. General Reserve appearing in the books is ₹ 2,00,000 and loss on revaluation is ₹ 50,000. C’s share of hidden goodwill will be ______.

When a liability is discharged by a partner at the time of dissolution, his Capital Account is credited because ______.

At the time of admission of a new partner in the firm, the new partner compensates the old partners for their loss of share in the super profits of the firm for which he brings in additional amount which is known as ______.

X and Y were partners in a firm sharing profits in the ratio of 7 : 3. Z was admitted for `1/5` th share in the profits of which he took 75% from X and remaining from Y. Calculate the sacrificing ratio of X and Y.

Match the following in case of admission of a partner:

Match the following items:

Match the following items:

Match the following items:

Match the following items:

Treatment of the following on admission of new partner:

Treatment of the following on admission of new partner:

Match the following items:

Treatment of the following on admission of new partner:

Match the following items:

Treatment of the following on admission of new partner:

Match the following items:

A new partner may be admitted into a partnership ______.

On the admission of a new partner:

A and B are partners sharing profit in the ratio of 3 : 2. They admit C as a partner by giving him `1/3`rd share in future profits. The new ratio will be:

Ashu and Basu are partners sharing profits and losses in the ratio of 2 : 1. Chetan is admitted as a new partner with a `1/4`th share in the profits, which he acquires equally from Ashu and Basu. The new profit-sharing ratio between Ashu, Basu and Chetan will be ______.

A and B share profits in the ratio of 2 : 1. C is admitted with `1/4` a share in profits. C acquires `3/4` of his share from A and `1/4` of his share from B. The new ratio will be ______.

B and N are partners in a firm sharing profits in the ratio of 3 : 2. They admit S as a partner for `1/4`th share in the profits. S acquires his share from B and N in the ratio of 2 : 1. The new profit-sharing ratio will be ______.

Hema and Tara were partners in a firm sharing profits and losses in the ratio of 2 : 3. They admited Ojas as a new partner. Hema surrendered `1/3`rd of her share and Tara surrendered `1/2` of her share in favour of Ojas. The new profit-sharing ratio of Hema, Tara and Ojas will be ______.

A and B are partners sharing profit or loss in the ratio of 3 : 2. C is admitted into partnership as a new partner. A sacrifice `1/3` of his share of B sacrifices `1/4` of his share in favour of C. What will be the C’s share in the firm?

Niyati and Aisha were partners in a firm sharing profit and losses in the ratio of 4 : 3. They admitted Bina as a new partner. Niyati sacrificed `1/4`th from her share and Aisha sacrificed `1/7`th from her share in favour of Bina. Bina’s share in the profits of the firm will be ______.

Atul, Beena and Sita were partners in a firm sharing profits and losses in the ratio of 8 : 7 : 5. Damini was admitted as a new partner for the `1/5` th share in the profits, which she acquired entirely from Atul. The new profit-sharing ratio after Damini’s admission will be ______.

Rani, Maharani and Laxmi were partners in a firm sharing profits and losses in the ratio of 3: 3: 2. On 1st April, 2024 they admitted Reena as a new partner for `1/5` th share in the profits of the firm. Reena acquired her share from Rani and Maharani in the ratio of 3 : 2. The new profit sharing ratio between Rani, Maharani, Laxmi and Reena will be:

A, B, C, and D are in partnership sharing profits and losses in the ratio of 9 : 6 : 5 : 5. E joins the partnership for a 20% share. A. B, C and D would in the future share profits among themselves as `3/10 : 4/10 : 2/10 : 1/10`. The new profit-sharing ratio will be ______.

A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for a `1/4`th share. Afterwards D enters for 20 paisa in the rupee. The new profit-sharing ratio after D’s admission will be ______.

The formula for calculating the sacrificing ratio is ______.

Veena and Soma are partners in a firm. They admit Sara on 1st April, 2020, for a `1/4` share in the profits of the firm. Sara acquired her share as `1/12` from Veena and the remaining from Soma. The sacrificing ratio of the old partners will be ______.

A and B are partners sharing profits in the ratio of 5 : 3. A surrenders `1/4`th of his share and B surrenders `1/5` of his share in favour of C, a new partner. What is the sacrificing ratio?

P and Q are partners sharing profits in the ratio of 9 : 7. R is admitted as a partner with a `9/20`th share in the profits, which he takes `1/5`th from P and `1/4`th from Q. The sacrifice ratio will be ______.

A, B and C are partners sharing in the ratio of 5 : 4 : 3. They admit D for `1/7`th share. It is agreed that B would retain his original share. Sacrificing ratio will be ______.