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TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner

TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner – Here are all the TS Grewal solutions for Class 12 Accountancy Chapter 4. This solution contains questions, answers, images, explanations of the complete Chapter 4 titled Admission of a Partner of Accountancy taught in Class 12. If you are a student of Class 12 who is using TS Grewal Textbook to study Accountancy, then you must come across Chapter 4 Admission of a Partner. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete TS Grewal Solutions for Class 12 Accountancy Chapter 4 Admission of a Partner in one place.

TS Grewal Accountancy Class 12 Solutions Chapter 4 Admission of a Partner

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TS Grewal Solutions Class 12 Accountancy Chapter 4 Admission of a Partner

Class 12, Accountancy Chapter 4, Admission of a Partner solutions are given below in PDF format. You can view them online or download PDF file for future use.

Question 1.
X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2 . They admit A into partnership and give him 1/5th share of profits. Find the new profit-sharing ratio.
Solution:

Question 2.
Ravi and Mukesh are sharing profits in the ratio of 7 : 3. They admit Ashok for 3/7th share in the firm which he takes 2/7th from Ravi and 1/7th from Mukesh. Calculate new profit-sharing ratio.
Solution:

Question 3.
A and B are partners sharing profits and losses in the proportion of 7 : 5 . They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B. Calculate new profit-sharing ratio.
Solution:

Question 4.
A, B and C were partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted D as a new partner for 1/8th share in the profits, which he acquired 1/16th from C. Calculate the new profit-sharing ratio of A, B, C and D.
Solution:

Question 5.
Bharati and Astha were partners sharing profits in the ratio of 3 : 2. They admitted Dinkar as a new partner for 1/5th share in the future profits of the firm which he got equally from Bharati and Astha. Calculate the new profit-sharing ratio of Bharati, Astha and Dinkar.
Solution:

Question 6.
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. Z is admitted as partner with 1/4 share in profit. Z acquires his share from X and Y in the ratio of 2 : 1. Calculate new profit-sharing ratio.
Solution:

Question 7.
R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm as a new partner. R gives 1/4th of his share and S gives 1/5th of his share to the new partner. Find out new profit-sharing ratio.
Solution:

Question 8.
Kabir and Farid are partners in a firm sharing profits and losses in the ratio of 7 : 3. Kabir surrenders 2/10th from his share and Farid surrenders 1/10th from his share in favour of Jyoti; the new partner. Calculate new profit-sharing ratio and sacrificing ratio.
Solution:

Question 9.
Find New Profit-sharing Ratio:
(i) R and T are partners in a firm sharing profits in the ratio of 3 : 2. S joins the firm. R surrenders 1/4th of his share and T 1/5th of his share in favour of S.
(ii) A and B are partners. They admit C for 1/4th share. In future , the ratio between A and B would be 2 : 1.
(iii) A and B are partners sharing profits and losses in the ratio of 3 : 2 . They admit C for 1/5th share in the profit. C acquires 1/5th of his share from A and 4/5th share from B.
(iv) X, Y and Z are partners in the ratio of 3 : 2 : 1. W joins the firm as a new partner for 1/6th share in profits. Z would retain his original share.
(v) A and B are equal partners. They admit C and D as partners with 1/5th and 1/6th share respectively.
(vi) A and B are partners sharing profits/losses in the ratio of 3 : 2. C is admitted for 1/4th share. A and B decide to share equally in future.
Solution:





Question 10.
X and Y were partners sharing profits in the ratio of 3 : 2. They admitted P and Q as new partners X surrendered 1/3rd of his share in favour of P and Y surrendered 1/4th of his share in favour of Q. Calculate new profit-sharing ratio of X, Y , P and Q.
Solution:

Question 11.
Rakesh and Suresh are sharing profits in the ratio of 4 : 3 . Zaheer joins and the new ratio among Rakesh, Suresh and Zaheer is 7 : 4 : 3. Find out the sacrificing ratio.
Solution:

Question 12.
A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. D is admitted for 1/3rd share in future profits. What is the sacrificing ratio ?
Solution:

Question 13.
A and B are partners sharing profits in the ratio of 3 : 2. C is admitted as a partner. The new profit-sharing ratio among A, B and C is 4 : 3 : 2 . Find out the sacrificing ratio ?
Solution:

Question 14.
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 admission.
Solution:

Question 15.
A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio.
Solution:

Question 16.
A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio.
Solution:

Question 17.
A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for 1/4th share. Afterwards D enters for 20 paise in the rupee. Compute profit-sharing ratio of A, B, C and D after D admission.
Solution:

Question 18.
P and Q are partners sharing profits in the ratio of 3 : 2 . They admit R, a new partner who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and sacrificing ratio.
Solution:

Question 19.
A and B are partners sharing profits and losses in the ratio of 2 : 1 . They take C as a partner for 1/5th share. The Goodwill Account appears in the books at its full value ₹ 15,000. C is to pay proportionate amount as premium for goodwill which he pays to A and B privately. Pass necessary entries.
Solution:

Question 20.
A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring in ₹ 14,000 as his share of goodwill in cash to be distributed between A and B. C’s share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B.
Solution:

Question 21.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted. A surrenders 1/5th of his share and B surrenders 2/5th of his share and B surrenders 2/5th of his share in favour of C. For this purpose of C’s admission, goodwill of the firm is valued at ₹ 75,000 and C brings in his share of goodwill in cash which is retained in the firm’s books. Journalise the above transactions.
Solution:

Question 22.
Give Journal entries to record the following arrangements in the books of the firm:
(a) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill) of ₹ 2,000 for 1/4th share of the profits, shares shares of B and C remain as before.
(b) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of ₹ 2,100 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.
Solution:

Question 23.
B and C are in Partnership sharing profits and losses as 3 : 1. They admit D into the firm, D paying a premium of ₹ 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share the future profits and losses equally. Draft journal entries showing appropriations of the premium money.
Solution:


Question 24.
M and J are partners in a firm sharing profits in the ratio of 3 : 2. They admit R as a new partner. The new profit-sharing ratio between M, J and R will be 5 : 3 : 2. R brought in ₹ 25,000 for his share of premium for goodwill. Pass necessary journal entries for the treatment of goodwill.
Solution:

Question 25.
A and B are in partnership sharing profitsand losses in the ratio of 5 : 3. C is admitted as a partner who pays ₹ 40,000 as capital and the necessary amount of goodwill which is valued at ₹ 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B.
Give journal entries and also calculate future profit-sharing ratio of the partners.
Solution:

Question 26.
A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in ₹ 10,000 for his capital and ₹ 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Their profits for the first year of the new partnership amount to ₹ 24,000. Pass necessary journal entries in connection with C’s admission and apportion the profits between the partners.
Solution:


Question 27.
X and Y are partners sharing profits in the ratio of 3 : 1. Z is admitted as a partner for which he pays ₹ 30,000 for goodwill in cash. X, Y and Z decided to share the future profits in equal proportion. You are required to pass a single journal entry to give effect to the above arrangement.
Solution:

Question 28.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings in ₹ 30,000 as capital and ₹ 10,000 as goodwill. At the time of admission of C, goodwill appears in the Balance Sheet of A and B at ₹ 3,000. The new profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary journal entries.
Solution:

Question 29.
Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the books at ₹ 4,40,000. Raja was admitted to the partnership. The new profit-sharing ratio among Anu, Bhagwan and Raja was 2 : 2 : 1.
Raja brought ₹ 1,00,000 for his capital and necessary cash for his goodwill premium. The goodwill of the firm was valued at ₹ 2,50,000.
Record necessary journal entries in the books of the firm for the above transactions.
Solution:

Question 30.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2018, they admit Z as a new partner for 1/4th share in the profits. Z contributed following assets towards his capital and for his share of goodwill:
Stock ₹ 60,000; Debtors ₹ 80,000; Land ₹ 1,00,000; Plant and Machinery; ₹ 40,000. On the date of admission of Z, the goodwill of the firm was valued at ₹ 6,00,000. Pass necessary journal entries in the books of the firm on Z’s admission.
Solution:

Question 31.
A and B are partners in a business sharing profits and losses in the ratio of 1/3rd and 2/3rd. On 1st April, 2018, their capitals are ₹ 8,000 and ₹ 10,000 respectively. On that date, they admit C in partnership and give him 1/4th share in the future profits. C brings in ₹ 8,000 as his capital and ₹ 6,000 as goodwill. The amount of goodwill is immediately withdrawn by the old partners in cash. Draft the journal entries and show the Capital Accounts of all the Partners. Calculate proportion in which partners would share profits and losses in future.
Solution:


Question 32.
A and B were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted C as a new partner for 3/7th share in the profit and the new profit-sharing ratio will be 2 : 2 : 3. C brought ₹ 2,00,000 as his capital and ₹ 1,50,000 as premium for goodwill. Half of their share of premium was withdrawn by A and B from the firm. Calculate sacrificing ratio and pass necessary journal entries for the above transactions in the books of the firm.
Solution:



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Question 33.
A and B are partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits C brings in ₹ 30,000 for his capital and ₹ 8,000 out of his share ₹ 10,000 for goodwill. Before admission, goodwill appeared in books at ₹ 18,000. Give journal entries to give effect to the above arrangements.
Solution:

Question 34.
A and B are partners sharing profits in the ratio of 3 : 2 . They admit C into the firm for 1/4th share in profits which he takes 1/6th from A and 1/12th from B. C brings in only 60% of his share of firm’s goodwill. Goodwill of the firm has been valued at ₹ 1,00,000. Pass necessary journal entries to record this arrangement.
Solution:

Question 35.
On the admission of Rao, it was agreed that the goodwill of Murty and Shah should be valued at ₹ 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao cannot bring in any cash. Give journal entries in the books of Murty and Shah when:
(a) there is no Goodwill Account and
(b) Goodwill appears in the books at ₹ 10,000.
Solution:


Question 36.
A and B are partners sharing profits in the ratio of 3 : 2. Their books show goodwill at ₹ 2,000. C is admitted with 1/4th share of profits and brings in ₹ 10,000 as his capital but is not able to bring in cash for his share of goodwill ₹ 3,000. Draft journal entries.
Solution:

Question 37.
A, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1 respectively. Two new partners D and E are admitted. The profits are now to be shared in the ratio of 3 : 4 : 2 : 2 : 1 respectively. D is to pay ₹ 90,000 for his share of Goodwill but E has insufficient cash to pay for Goodwill. Both the new partners introduced ₹ 1,20,000 each as their capital. You are required to pass necessary journal entries.
Solution:

Question 38.
Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years purchase of the average profit of last 4 years which were ₹ 50,000 for 2014-15, ₹ 60,000 for 2015-16, ₹ 90,000 for 2016-17 and ₹ 70,000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary journal entries in the books of the firm on Ram’s admission when:
(a) Goodwill appears in the books at ₹ 2,02,500.
(b) Goodwill appears in the books at ₹ 2,500.
(c) Goodwill appears in the books at ₹ 2,02,000.
Solution:


Question 39.
Anil and Sunil are partners in a firm with fixed capitals of ₹ 3,20,000 and ₹ 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought ₹ 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary journal entries.
Solution:

Question 40.
A and B are partners in a firm with capital of ₹ 60,000 and ₹ 1,20,000 respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of ₹ 70,000 as his capital. Calculate amount of goodwill.
Solution:

Question 41.
Bhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were ₹ 50,000 and ₹ 75,000 respectively. They admitted Atul on 1st April, 2018 as a new partner for 1/4th share in the future profits. Atul brought ₹ 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transactions on Atul’s admission.
Solution:

Question 42.
X and Y are partners with capitals of ₹ 50,000 each. They admit Z as a partner with 1/4th share in the profits of the firm. Z brings in ₹ 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of ₹ 40,000 as on date of admission of Z. Give necessary journal entries to record the goodwill.
Solution:

Question 43.
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th 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 firm was ₹ 15,00,000 and outside liabilities were valued at ₹ 5,00,000 on that date. Give necessary journal entry to record goodwill at the time of Ajay’s admission. Also show your workings.
Solution:

Question 44.
Verma and Sharma are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in ₹ 20,000 as capital and ₹ 4,000 as his share of goodwill premium. Give the necessary journal entries:
(a) When the amount of goodwill is retained in the business.
(b) When the amount of goodwill is fully withdrawn.
(c) When 50% of the amount of goodwill is withdrawn.
(d) When goodwill is paid privately.
Solution:

Question 45.
Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is ₹ 4,80,000 and of Divya is ₹ 3,00,000. On 1st April, 2018 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought ₹ 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary journal entries on Hina’s admission.
Solution:

Question 46.
E and F were partners in a firm sharing profits in the ratio of 3 : 1. They admitted G as a new partner on 1st April, 2018 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought ₹ 50,000 in cash and machinery worth ₹ 70,000 for his share of profit as premium of goodwill. Pass necessary journal entries in the books of the firm.
Solution:

Question 47.
Mr. A commenced business with a capital of ₹ 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made:
31st March, 2014, Loss – ₹ 5,000
31st March, 2015, Profit – ​₹ 13,000
31st March, 2016, Profit – ​₹ 17,000
31st March, 2017, Profit – ₹ 20,000
31st March, 2018, Profit – ₹ 25,000
During this period he had drawn ₹ 40,000 for his personal use. On 1st April, 2018, he admitted B into partnership on the following terms:
B to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transactions relating to admission.
Solution:

Question 48.
Pass entries in the firm’s journal for the following on admission of a partner:
(i) Machinery be depreciated by ₹ 16,000 and Building be appreciated by ₹ 40,000.
(ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to ₹ 80,000.
(iii) Provision for warranty claims be increased by ₹ 12,000.
Solution:

Question 49.
Pass entries in the firm’s journal for the following on admission of a partner:
(i) Unrecorded Investments worth ₹ 20,000.
(ii) Unrecorded liability towards suppliers for ₹ 5,000.
(iii) An item of ₹ 1,600 included in Sundry Creditors is not likely to be claimed and hence should be written back.
Solution:

Question 50.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a new partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at ₹ 50,000 and ₹ 5,000 respectively all debtors are good. Pass the necessary journal entries.
Solution:

Question 51.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share. At the time of admission of Z, Stock (Book Value ₹ 1,00,000) is to be reduced by 40% and Furniture (Book Value ₹ 60,000) is to be reduced to 40%. Pass the necessary journal entries.
Solution:

Question 52.
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z Investments appeared at ₹ 80,000. Half of the investments to be taken over by X and Y in their profit-sharing ratio at book value. Remaining investments were valued at ₹ 50,000. Pass the necessary journal entries.
Solution:

Question 53.
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a new partner for 1/4th share of profits. At the time of admission of Z Debtors and Provision for Doubtful Debts appeared at ₹ 76,000 and ₹ 8,000 respectively. ₹ 6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary journal entries.
Solution:

Question 54.
X, Y and Z are partners sharing profits ands losses in the ratio of 6 : 3 : 1. They decide to take W into partnership with effect from 1st April, 2018. The new profit-sharing ratio between X, Y, Z and W will be 3 : 3 : 3 : 1. They also decide to record the effect of the following revaluations without affecting the book values of the assets and liabilities by passing a single adjustment entry:

Pass necessary adjustment entry.
Solution:


Question 55.
At the time of admission of a new partner C the assets and liabilities of A and B were revalued as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry Debtors ₹ 50,000).
(b) Creditors were written back by ₹ 5,000.
(c) Building was appreciated by 20% (Book Value of Building ₹ 2,00,000).
(d) Unrecorded Investments were worth ₹ 15,000.
(e) A Provision of ₹ 2,000 was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was ₹ 3,000.
Pass necessary journal entries.
Solution:

Question 56.
X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1st April, 2018, they admit Z as a new partner for 1/5th share in profits . On that date, there was a balance of ₹ 1,50,000 in General Reserve and a debit balance of ₹ 20,000 in the Profit and Loss Account of the firm. Pass necessary journal entries regarding adjustment of reserve and accumulated profit/loss.
Solution:

Question 57.
X and Y were partners in a firm sharing profits and losses in the ratio of 2 : 1. Z was admitted for 1/3rd share in the profits. On the date of Z’s admission, the Balance Sheet of X and Y showed General Reserve of ₹ 2,50,000 and a credit balance of ₹ 50,000 in Profit and Loss Account. Pass necessary journal entries on the treatment of these items on Z’s admission.
Solution:

Question 58.
(a) X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2. They decide to admit W for 1/6th share. Following is th extract of the Balance Sheet on the date of admission:

(b) A and B were partners in a firm sharing profit in 4 : 3 ratio. On 1st April, 2018, they admitted C as a new partner. On the date of C’s admission, the Balance Sheet of A and B showed a General Reserve of ₹ 84,000 and a debit balance of ₹ 8,400 in the Profit and Loss Account Pas necessary journal entries for the treatment of these items on C’s admission.
(c) Give the journal entries to distribute Workmen Compensation Reserve of ₹ 72,000 at the time of admission of Z, when there is no claim against it. The firm has two partners X and Y.
(d) Give the journal entries to distribute Workmen Compensation Reserve of ₹ 72,000 at the time of admission of Z, when there is claim of ₹ 48,000 against it. The firm has two partners X and Y.
(e) Give the journal entry to distribute Investment Fluctuation Reserve of ₹ 24,000 at the time of admission of Z, when Investment (Market Value ₹ 1,10,000 ) appears at ₹ 1,20,000. The firm has two partners X and Y.
(f) Give the journal entry to distribute General Reserve of ₹ 4,800 at the time of admission of Z, when 20% of General Reserve is to be transferred to Investment Fluctuation Reserve. The firm has two partners X and Y.
(g) A, B and C were partners sharing profits and losses in the ratio of 6 : 3 : 1. They decide to take D into partnership with effect from 1st April, 2018. The new profit-sharing ratio between A, B, C and D will be 3 : 3 : 3 : 1. They also decide to record the effect of the following without affecting their book values, by passing a single adjustment entry:

Pass the necessary single adjustment entry, through the Partner’s Current Account.
Solution:



Question 59.
A and B, carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2, require a partner, when their Balance Sheet stood as:

They admit C into partnership and give him 1/8th share in the future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years profits which amounted to ₹ 21,000; ₹ 24,000 and ₹ 25,560.
(b) C is to bring in cash for the amount of his share of goodwill.
(c) C is to bring in cash ₹ 15,000 as his capital.
Pass journal entries recording these transactions, draw out the Balance Sheet of the new firm and state  new profit-sharing ratio.
Solution:

Question 60.
X, Y and Z are equal partners with capitals of ₹ 1,500; ₹ 1,750 and ₹ 2,000 respectively. They agree to admit W into equal partnership upon payment in cash ₹ 1,500 for 1/4th share of the goodwill and ₹ 1,800 as his capital, both sums to remain in the business. The liabilities of the old firm amounted to ₹ 3,000 and the assets, apart from cash, consist of Motors ₹ 1,200, Furniture ₹ 400, Stock ₹ 2,650 and Debtors ₹ 3,780. The Motors and Furniture were revalued at ₹ 9450 and ₹ 380 respectively.
Pass journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.
Solution:



Question 61.
Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 : 1 as at 31st March, 2018:

They agree to admit C into the partnership on the following terms:
(a) C was to bring in ₹ 7,500 as his capital and ₹ 3,000 as goodwill for 1/4th share in the firm.
(b) Values of the Stock and Plant and Machinery were to be reduced by 5%.
(c) A Provision for Doubtful Debts was to be created in respect of Sundry Debtor ₹ 375.
(d) Building Account was to be appreciated by 10%.
Pass necessary journal entries to give effect to the arrangements. Prepare Profit and Loss Adjustment Account (or Revaluation Account), Capital Accounts and Balance Sheet of the new firm.
Solution:



Question 62.
Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31st March, 2018. A and B share profits and losses in the ratio of 2 : 1.

C is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) C will bring in ₹ 1,00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4th share in the profits.
(b) Plant is to be appreciated to ₹ 1,20,000 and the value of building is to be appreciated by 10%.
(c) Stock is found overvalued by ₹ 4,000.
(d) A Provision for doubtful debts is to be created at 5% of Sundry Debtors.
(e) Creditors were unrecorded to the extent of ₹ 1,000.
Pass the necessary journal entries, prepare the Revaluation Account and Partners Capital Accounts, and show the Balance Sheet after the admission of C.
Solution:


Question 63.
Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:

M joins the firm from 1st April, 2018 for a half share in the future profits. He is to pay ₹ 1,00,000 for goodwill and ₹ 3,00,000 for capital. Draft the journal entries and prepare Balance Sheet in each of the following cases:
(a) If M acquires his share of profit from the firm in the profit – sharing ratios of the partners.
(b) If M acquires his share of profits from the firm in equal proportions from the original partners.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future profit-sharing ratio of the partners in each case.
Solution:







Question 64.
The Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2 : 3 as at 31st March, 2016 is given below:

Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their new profit-sharing ratio will be 2 : 3 : 5. Gayatri brought ₹ 4,00,000 as her capital and her share of goodwill premium in cash.
(a) Goodwill of the firm was valued at ₹ 3,00,000.
(b) Land and Building was found undervalued by ₹ 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the debtors.
(d) There was a claim of ₹ 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the reconstituted firm.
Solution:


Question 65.
Shyamlal and Sanjay were in partnership business sharing profits and losses in the ratio of 2 : 3 respectively. Their Balance Sheet as at 31st March, 2018 was:

On 1st April, 2018, they admitted Shanker into partnership for 1/3rd share in the future profits on the following terms:
(a) Shanker is to bring in ₹ 30,000 as his capital and ₹ 20,000 as goodwill which is to remain in the business.
(b) Stock and Furniture are to be reduced in value by 10%.
(c) Building is to be appreciated by ₹ 15,000.
(d) Provision of 5% is to be made on Sundry Debtors for Doubtful Debts.
(e) Unaccounted Accrued Income of ₹ 2,400 to be provided for. A debtor, whose dues of ₹ 4,800 were written off as bad debts, paid 50% in full settlement.
(f) Outstanding Rent amounted to ₹ 4,800.
Show Profit and Loss Adjustment Account (Revaluation Account), Capital Accounts of Partners and opening Balance Sheet of the new firm.
Solution:



Question 66.
A, B, C are partners sharing profits and losses in the ratio of 3 : 2 : 1 respectively. Their Balance Sheet as at 31st March, 2108 is as follows:

D is admitted as a new partner on 1st April, 2018 for an equal share and is to pay ₹ 50,000 as capital.
Following are the adjustments required on D’s admission:
(a) Out of the Creditors, a sum of ₹ 10,000 is due to D which will be transferred to his capital Account.
(b) Advertisement Expenses of ₹ 1,200 are to be carried forward to next accounting period as Prepaid Expenses.
(c) Expenses debited in the Profit and Loss Account  includes a sum of ₹ 2,000 paid for B’s personal expenses.
(d) A Bill of Exchange of ₹ 4,000, which was previously discounted with the banker, was dishonoured on 31st March, 2018 but no entry has been passed for that.
(e) A Provision for Doubtful Debts @ 5% is to be created against Debtors.
(f) Expenses on Revaluation amounted to ₹ 2,100 is paid by A.
Prepare necessary Ledger Accounts and Balance Sheet after D’s admission.
Solution:



Question 67.
X and Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2018 was:

Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
They admit Z into partnership with 1/8th share in profits on this date. 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:
(a) Employees Provident Fund liability is to be increased by ₹ 5,000.
(b) All Debtors are good. Therefore, no provision is required on Debtors.
(c) Stock includes ₹ 3,000 for obsolete items.
(d) Creditors are to be paid ₹ 1,000 more.
(e) Fixed Assets are to be revalued at ₹ 70,000.
Prepare journal entries, necessary accounts and new Balance Sheet. Also, calculate new profit-sharing ratio.
Solution:



Question 68.
Balance Sheet of Ram and Shyam who shares profits in proportion to their capitals as at 31st March, 2018 is:

On 1st April, 2018 they admitted Arjun into partnership on the following terms:
(a) Arjun to bring in ₹ 20,000 as capital and ₹ 6,600 for goodwill, which is to be left in the business and he is to receive 1/4th share of the profits.
(b) Provision for Doubtful Debts is to be 2% on Debtors.
(c) Value of Stock to be written down by 5%.
(d) Freehold Premises are to be taken at valuation of ₹ 22,400; Plant and Machinery ₹ 11,800; Fixtures and Fittings ₹ 1,540 and Vehicles ₹ 800.
You are required to make necessary adjustments entries in the firm, give Balance Sheet of the new firm as at 1st April, 2018 and also give’s the proportions in which the partners will share profits , there being no change in the proportions of Ram and Shyam.
Solution:




Question 69.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2018 was as follows:

On 1st April, 2018 , they admitted Z as a partner for 1/6th share on the following terms:
(i) Z brings in ₹ 40,000 as his share of Capital but he is unable to bring any amount for Goodwill.
(ii) Claim on account of Workmen Compensation is ₹ 3,000.
(iii) To write off Bad Debts amounted to ₹ 6,000.
(iv) Creditors are to be paid ₹ 2,000 more.
(v) There being a claim against the firm for damages, liabilities to the extent of ₹ 2,000 should be created.
(vi) Outstanding rent be brought down to ₹ 11,200.
(vii) Goodwill is valued at 1 years purchase of the average profits of last 3 years, less ₹ 12,000. Profits for the last 3 years amounted to ₹ 10,000 ; ₹ 20,000 and ₹ 30,000.
Pass journal entries, prepare Capital Accounts and opening Balance Sheet.
Solution:




Question 70.
Following is the Balance Sheet of X and Y as at 31st March, 2018 who are partners in a firm sharing profits and losses in the ratio of 3 : 2 respectively:

Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000 ; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
Solution:




Question 71.
X and Y are partners sharing profits and losses equally. Their Balance Sheet as on 31st March, 2018 is given below:

Z is admitted as a new partner for 1/4th share under the following terms:
(a) Z is to introduce ₹ 1,25,000 as capital.
(b) Goodwill of the firm was valued at nil.
(c) It is found that the creditors included a sum of ₹ 7,500 which was not to be paid. But it was also found that there was a liability for compensation to Workmen amounting to ₹ 10,000.
(d) Provision for Doubtful Debts is to be created @ 10% on debtors.
(e) In regard to the Partners Capital Accounts present fixed capital method is to be converted into fluctuating capital method.
(f) Bills of ₹ 20,000 accepted from creditors were not recorded in the books.
(g) X provides ₹ 50,000 loan to the business carrying interest @ 10% p.a.
You are required to prepare Revaluation Account, Partners Capital Accounts, Bank Account and the Balance Sheet of the new firm.
Solution:


Question 72.
Rajesh and Ravi are partners sharing profits in the ratio of 3: 2. Their Balance Sheet at 31st March, 2018 stood as:

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. So it is decided to value the goodwill on the basis of Raman’s share in the profits and the capital contributed by him. Following revaluation s are made:
(a) Stock to depreciate by 5% ;
(b) Provision for Doubtful Debts is to be ₹ 500;
(c) Furniture to depreciate by 10% ;
(d) Building is valued at ₹ 40,000.
Show necessary Ledger Accounts and Balance Sheet of new firm.
Solution:




Question 73.
A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a partner on 1st April, 2018 on which date the Balance Sheet of the firm was:

You are required to prepare the Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm after considering the following:
(a) C brings in ₹ 30,000 as capital for 1/4th share. He also brings ₹ 10,000 for his share of goodwill.
(b) Part of the Stock which had been included at cost of ₹ 2,000 had been badly damaged in storage and could only expect to realise ₹ 400.
(c) Bank Charges had been overlooked and amounted to ₹ 200 for the year 2017-18.
(d) Depreciation on Building of ₹ 3,000 had been omitted for the year 2017-18.
(e) A credit for goods for ₹ 800 had been omitted from both purchases and creditors although the goods had been correctly included in Stock.
(f) An expense of ₹ 1,200 for insurance premium was debited in the Profit and Loss Account of 2017-18 but ₹ 600 of this are related to the period after 31st March, 2018.
Solution:



Question 74.
A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2018 on which date, the Balance Sheet of the firm was:

Following are the required adjustments on admission of C:
(a) C brings in ₹ 25,000 towards his capital.
(b) C also brings in ₹ 5,000 for 1/5 th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a contingent liability of ₹ 4,000, which has been decided by the court at ₹ 3,200.
(e) In regard to the Debtors , the following Debts proved Bad or Doubtful
₹ 2,000 due from X bad to the full extent.
₹ 4,000 due from insolvent, estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:


Question 75.
Following is the Balance Sheet of the firm, Ashirvad, owned by A, B and C who share profits and losses of the business in the ratio of 3 : 2 : 1.

On 1st April, 2018, they admit D as a partner on the following conditions:
(a) D will bring in ₹ 1,20,000 as his capital and also ₹ 30,000 as goodwill premium for a quarter of the share in the future profits/losses of the firm.
(b) The values of the fixed assets of the firm will be increased by 10% before the admission of D.
(c) Mohan, an old customer whose account was written off as bad debts , has promised to pay ₹ 3,000 in full settlement of his dues.
(d) The future profits and losses of the firm will be shared equally by all the partners.
Pass the necessary journal entries and Prepare Revaluation Account, Partners Capital Accounts and opening Balance Sheet of the new firm.
Note: There will be no entry for the promise made by Mohan, since it is an event and not a transaction. There is another view, ₹ 3,000 is to be considered as bad debts recovered. In this situation result will be as follows:
Gain( Profit) on Revaluation – ₹ 36,000; Capital A/c’s: A – ₹ 1,66,000; B – ₹ 1,42,000; C – ₹ 1,16,000; D – ₹ 1,20,000; Balance Sheet Total – ₹ 5,72,000.
Solution:





Question 76.
A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. Following is their Balance Sheet as at 31st March, 2018:

C is admitted as a partner on 1st April, 2018 on the following terms:
(a) C is to pay ₹ 20,000 as capital for 1/4th share. He also pays ₹ 5,000 as premium for goodwill.
(b) Debtors amounted to ₹ 3,000 is to be written off as bad and a Provision of 10% is created against Doubtful Debts on the remaining amount.
(c) No entry has been passed in respect of a debt of ₹ 300 recovered by A from a customer, which was previously written off as bad in previous year. The amount is to be paid by A.
(d) Investments are taken over by B at their market value of ₹ 4,900 against cash payment.
You are required to prepare Revaluation Account, Partner’s Capital Accounts and new Balance Sheet.
Solution:



Question 77.
X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31st March, 2018 is:

They admit Z into partnership on 1st April, 2018 on the following terms:
(a) Goodwill is to be valued at ₹ 1,00,000.
(b) Stock and Furniture to be reduced by 10%.
(c) A Provision for Doubtful Debts is to be created @ 5% on Sundry Debtors.
(d) The value of Land and Building is to be appreciated by 20%.
(e) Z pays ₹ 50,000 as his capital for 1/5th share in the future profits.
You are required to show Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Note: Z’s Share of Goodwill ₹ 20,000 (i.e, ₹ 1,00,000 x 1/5 ) can be adjusted through Z’s Current A/c. In that situation, Partners Capital A/cs: X – ₹ 1,87,875; Y – ₹ 92,625; Z – ​₹ 50,000; Z’s Current A/c (Dr.) – ​₹ 20,000; Balance Sheet Total – ₹ 5,18,000.
Solution:



Question 78.
Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2 . On 31st March,2018 their Balance Sheet was:

On the above date, the partners decided to admit Anshu as a partner on the following terms:
(a) The new profit-sharing ratio of Deepika, Rajshree and Anshu will be 5 : 3 : 2 respectively.
(b) Anshu shall bring in ₹ 32,000 as his capital.
(c) Anshu is unable to bring in any cash for his share of goodwill. Partners therefore, decide to calculate the goodwill on the basis of Anshu’s share in the profits and the capital contribution made by her to the firm.
(d) Plant and Machinery is to be valued at ₹ 60,000, Stock at ₹ 40,000 and the Provision for Doubtful Debts is to be maintained at ₹ 4,000. Value of Land and Building has appreciated by 20%. Furniture has been depreciated by 10%.
(e) There is and additional liability 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 decide to show this liability in the books of account of the reconstituted firm.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of Deepika, Rajshree and Anshu.
Solution:



Question 79.
X and Y are partners sharing profits in the ratio of 2 : 1. Their Balance Sheet as at 31st March, 2018 was:

They admit Z into partnership on the same date on the following terms;
(a) Z brings in ₹ 40,000 as his capital and he is given 1/4th share in profits.
(b) Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old partners.
(c) Investments are valued at ₹ 10,000. X takes over Investments at this value.
(d) Typewriter is to be depreciated by 20% and Fixed Assets by 10%.
(e) An unrecorded stock of Stationery on 31st March, 2018 is ₹ 1,000.
(f) By bringing in r withdrawing cash, the Capitals of X and Y are to be made proportionate to that of Z on their profit-sharing basis.
Pass journal entries, prepare Revaluation Account, Capital Accounts and new Balance Sheet of the firm.
Solution:






Question 80.
A and B are in partnership sharing profits and losses in the proportion of 2/3rd and 1/3rd respectively. Their Balance Sheet as at 31st March, 2018 was: Cash ₹ 1,000; Sundry Debtors ₹ 15,000; Stock ₹ 22,000; Plant and Machinery ₹ 4,000; Sundry Creditors ₹ 2,000; Bank Overdraft ₹ 15,000; A’s Capital ₹ 15,000; B’s Capital ₹ 10,000.
On 1st April, 2018 they admitted into partnership on the following terms:
(a) C to purchase one-quarter of the goodwill for ₹ 3,000 and provide ₹ 10,000 as capital. C brings in necessary cash for goodwill and capital.
(b) Profits and Losses are to be shared in the proportion of one-half to A, one-quarter to B and one quarter to C.
(c) Plant and Machinery is to be reduced by 10% and ₹ 500 are to be provided for estimated Bad Debts. Stock is to be taken at a valuation of ₹ 24,940.
(d) By bringing in or withdrawing cash the capitals of A and B are to be made proportionate to that of C on their profit-sharing basis.
Prepare necessary Ledger Accounts in the books of the firm relating to the above arrangement and submit the opening Balance Sheet of the new firm.
Solution:



Question 81.
A and B were partners in a firm sharing profits in 3 : 1 ratio. They admitted C as a partner for 1/4th share in the future profit. C was to bring ₹ 60,000 for his capital. The Balance Sheet of A and B as at 1st April, 2018, the date on which C was admitted, was:

The other terms agreed upon were:
(a) Goodwill of the firm was valued at ₹ 24,000.
(b) Land and Building were valued at ₹ 65,000 and Plant and Machinery at ₹ 60,000.
(c) Provision for Doubtful Debts was found in excess by ₹ 400.
(d) A liability of ₹ 1,200 included in Sundry Creditors was not likely to arise.
(e) The capitals of the partners be adjusted on the basis of C’s contribution of capital to the firm.
(f) Excess of shortfall, if any, be transferred to Current Accounts.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:



Question 82.
The Balance Sheet of X, Y and Z who share profits and losses in the ratio of 3 : 2 : 1, as o 1st April, 2018 is as follows:

On the above date, W is admitted as a partner on the following terms:
(a) W will bring ₹ 50,000 as his capital and get 1/6th share in the profits.
(b) He will bring necessary amount for his share of goodwill premium. Goodwill of the firm is valued at ₹ 90,000.
(c) New profit-sharing ratio will be 2 : 2 : 1 : 1.
(d) A liability of ₹ 7,004 will be created against bills receivable discounted earlier but now dishonored.
(e) The value of stock, furniture and investments is reduced by 20%, whereas the value of Land and Building and Plant and Machinery will be appreciated by 20% and 10% respectively.
(f) Capital Accounts of the partners will be adjusted on the basis of W’s Capital through their Current Accounts.
Prepare Revaluation Account, Partners Current Accounts and Capitals Accounts.
Solution:



Question 83.
Shikhar and Rohit were partners in a firm sharing profits int he ratio of 7 : 3. On 1st April, 2013, they admitted Kavi as a new partner for 1/4th share in profits of the firm. Kavi brought ₹ 4,30,000 as his capital and ₹ 25,000 for his share of goodwill premium. The Balance Sheet of Shikhar and Rohit as on 1st April, 2013 was as follows:

It was agreed that:
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of Machinery will be depreciated by 10%.
(c) the liabilities of Workmen’s Compensation Fund were determined at ₹ 50,000.
(d) capitals of Shikhar and Rohit will be adjusted on the basis of Kavi’s capital and actual cash to be brought in or to be paid off as the case may be.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:





Question 84.
Raghu and Rishu are partners sharing profits in the ratio 3 : 2. Their Balance Sheet as at 31st March, 2009 was as follows:

Z is admitted as a new partner on 1st April, 2018 on the following terms:
(a) Provision for doubtful debts is to be maintained at 5% on Debtors.
(b) Outstanding rent amounted to ₹ 15,000.
(c) An accrued income of ₹ 4,500 does not appear in the books of the firm. It is now to be recorded.
(d) X takes over the Investments at an agreed value of ₹ 18,000.
(e) New Profit-sharing Ratio of partners will be 4 : 3 : 2.
(f) Z will bring in ₹ 60,000 as his capital by cheque.
(g) Z is to pay an amount equal to his share in firm’s goodwill valued at twice the average profits of the last three years which were ₹ 90,000 ; ₹ 78,000 and ₹ 75,000 respectively.
(h) Half of the amount of the goodwill is to be withdrawn by X and Y.
You are required to pass journal entries, prepare Revaluation Account, Partners Capital and Current Accounts and the Balance Sheet of the new firm.
Rishabh was admitted on that date for 1/4th share of profit on the following terms:
(a) Rishabh will bring ₹ 50,000 as his share of capital.
(b) Goodwill of the firm is valued at ₹ 42,000 and Rishabh will bring his share of goodwill in cash.
(c) Buildings were appreciated by 20%.
(d) All Debtors were good.
(e) There was a liability of ₹ 10,800 included in Creditors which was not likely to arise.
(f) New profit-sharing ratio will be 2 : 1 : 1.
(g) Capital of Raghu and Rishu will be adjusted on the basis of Rishabh’s share of capital and any excess or deficiency will be made by withdrawing or bringing in cash by the concerned partners as the case may be.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:



Question 85.
Following is the Balance Sheet of Abha and Binay as at 31st March, 2014:

Chitra was admitted as a partner for 1/4th share in the profits of the firm. It was decided that:
(a) Bad Debts amounted to ₹ 1,500 will be written off.
(b) Stock worth ₹ 8,000 was taken over by Abha and Binay at Book Value in their profit-sharing ratio. The remaining stock was valued at ₹ 2,500.
(c) Plant and Machinery and Goodwill were valued at ₹ 32,000 and ₹ 20,000 respectively.
(d) Chitra brought her share of goodwill in cash.
(e) Chitra will bring proportionate capital and the capitals of Abha and Binay will be adjusted in their profit-sharing ratio by bringing in or paying off cash as the case may be.
Prepare Revaluation Account and Partners Capital Accounts.
Solution:


Question 86.
M and N were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet on 31st March, 2015 was as follows:

On the above date, O was admitted as a new partner and it was decided that:
(i) The new profit-sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.
(ii) Goodwill of the firm was valued at ₹ 1,80,000 and O brought his share of goodwill premium in cash.
(iii) The market value of investments was ₹ 36,000.
(iv) Machinery will be reduced to ₹ 58,000.
(v) A creditor of ₹ 6,000 was not likely to claim the amount and hence was to be written off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partners Capital Accounts and the Balance Sheet of the new firm.
Solution:



Question 87.
A and B are partners in a firm sharing profits and losses in the ratio 3 : 1. They admit C for 1/4th share on 31st March, 2014 when their Balance Sheet was as follows:

The following adjustments were agreed upon:
(a) C brings ₹ 16,000 as goodwill and proportionate capital.
(b) Bad Debts amounted to ₹ 3,000.
(c) Market value of Investments is ₹ 4,500.
(d) Liability on account of workmen compensation reserve amounted to ₹ 2,000.
Prepare Revaluation Account and Partners Capital Accounts.
Solution:

Question 88.
Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2018 was:

They admitted Leander as a new partner on this date. New profit-sharing ratio is agreed as 3 : 2 : 3. Leander brings in proportionate capital after the following adjustments:
(a) Leander brings ₹ 16,000 as his share fo goodwill.
(b) Provisions for Doubtful Debts is to be reduced by ₹ 2,000.
(c) There is an old Typewriter valued at ₹ 2,400. It does not appear in the books of the firm. It is now to be recorded.
(d) Patents are valueless.
Prepare Revaluation Account, Capital Accounts and opening Balance Sheet of Pradeep, Dhanraj and Leander.
Solution:





Question 89.
Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2018 was:

They decide to admit Rohan to a 1/3rd share upon the terms that he is to pay into the business ₹ 1,000 as Goodwill and sufficient Capital to give him a 1/3rd share of the total capital of the new firm. It was agreed that the Provision for Doubtful Debts be reduced to ₹ 100 and the Stock be revalued at ₹ 2,000 and that the Plant be reduced to ₹ 500. You are required to record the above in the Ledger of the firm and show Balance Sheet of the new partnership.
Solution:




Question 90.
Following is the Balance Sheet of X and Y as at 31st March, 2018. Z is admitted as a partner on that date when the position of X and Y was:

X and Y share profits in the proportion of 3 : 2. The following terms of admission are agreed upon:
(a) Revaluation of assets: Building ₹ 18,000; Stock ₹ 16,000.
(b) The liability on Workmen Compensation Reserve is determined at ₹ 2,000.
(c) Z brought as his share of goodwill ₹ 10,000 in cash.
(d) Z was to bring in further cash as would make his capital equal to 20% of the combined capital of X and after above revaluation and adjustments are carried out.
(e) The further profit-sharing proportions were: X – 2/5th, Y – 2/5th and Z – 1/5th.
Prepare new Balance Sheet of the firm and Capital Accounts of the Partners.
Solution:




Question 91.
A and B are partners sharing profits in the ratio of 3 : 2. They admit C as a new partner from 1st April, 2018. They have decided to share future profits in the ratio of 4 : 3 : 3. The Balance Sheet as at 31st March, 2018 is given below:


Terms of C’s admission are as follows:
(i) C contributes proportionate capital and 60% of his share of goodwill in cash.
(ii) Goodwill is to be valued at 2 years purchase of super profit of last three completed years. Profits for the years ended 31st March were: 2016 – ₹ 4,80,000; 2017 – ₹ 9,30,000; 2018 – ​₹ 13,80,000. The normal profit is ​₹ 5, 30,000 with same amount of capital invested in similar industry.
(iii) Land and Building was found undervalued by ​₹ 1,00,000.
(iv) Stock was found undervalued by ​₹ 31,000.
(v) Provision for Doubtful Debts is to be made equal to 5% of the debtors.
(vi) Claim on account of Workmen Compensation is ​₹ 11,000. Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet.
Solution:



Question 92.
Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2018, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of the Kalpana and Kanika as on 1st April, 2018 was as follows:

It was agreed that;
(a) the value of Land and Building will be appreciated by 20%.
(b) the value of plant be increased by ₹ 60,000.
(c) Karuna will bring ₹ 80,000 for her share of goodwill premium.
(d) the liabilities of Workmen’s Compensation Fund were determined at ₹ 60,000.
(e) Karuna will bring in cash as capital to the extent of 1/5th share of the total capital of the new firm.
Prepare Revaluation Account, Partners Capital Accounts and Balance Sheet of the new firm.
Solution:



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Essay on India: Romaine Rolland, a French scholar, once quoted, “If there is one place…

2 days ago