Solutions Admission of Partner TS Grewal Class 12 [2025-26]
Table of Contents
Question No. 1 to 18
Question 1:
Jiten and Rajiv are partners sharing profits in the ratio of 3 : 2. They admit Bikram as a partner for 1/5th profit share.
Determine profit-sharing ratio after admission of Bikram.
Solution
Jiten : Rajiv = 3 : 2 (O.R.)
Bikram = 1/5th share
Let total share be 1
Remaining share of Jiten & Rajjiv = 1 – 1/5 = 4/5
Jjiten’s new share = \(\frac{3}{5}\) \(\times\) \(\frac{4}{5}\) = \(\frac{12}{25}\)
Rajiv’s new share = \(\frac{2}{5}\) \(\times\) \(\frac{4}{5}\) = \(\frac{8}{25}\)
New Profit Sharing ratio
= \(\frac{12}{25}\) : \(\frac{8}{25}\) : \(\frac{1}{5}\)
= \(\frac{12 : 8 : 5}{25}\) = 12 : 8 : 5
Question 2:
Girija, Yatin, and Zubin are partners sharing profits and losses in the ratio of 5 : 3 : 2. They admit Suresh into the partnership and give him 1/5th share of profits. Find the new profit-sharing ratio.
Solution
Girija: Yatin : Zubin = 5 : 3 : 2 (O.R.)
Suresh = 1/5th share
Let total share be 1
Remaining share of Girija, Yatin & Rajjiv = 1 – 1/5 = 4/5
Girija’s new share = \(\frac{5}{10}\) \(\times\) \(\frac{4}{5}\) = \(\frac{20}{50}\)
Yatin’s new share = \(\frac{3}{10}\) \(\times\) \(\frac{4}{5}\) = \(\frac{12}{50}\)
Zubin’s new share = \(\frac{2}{10}\) \(\times\) \(\frac{4}{5}\) = \(\frac{8}{50}\)
New Profit Sharing ratio
= \(\frac{20}{50}\) : \(\frac{12}{50}\) : \(\frac{8}{50}\) : \(\frac{1}{5}\)
= \(\frac{20 : 12 : 8 : 10}{50}\) = 20 : 12 : 8 : 10 = 10 : 6 : 4 : 5
Question 3:
A and B are partners sharing profits and losses in the proportion of 7 : 5. They admit C as partner for 1/6th share in the profits. He takes this share as 1/24 from A and 1/8 from B. Calculate new profit sharing ratio.
Solution
A : B = 7 : 5
C’s share = \(\frac{1}{6}\)
A’s new share = \(\frac{7}{12}\) – \(\frac{1}{24}\) = \(\frac{14 – 1}{24}\) = \(\frac{13}{24}\)
B’s new share = \(\frac{5}{12}\) – \(\frac{1}{8}\) = \(\frac{10 – 3}{24}\) = \(\frac{7}{24}\)
New Profit sharing ratio
= \(\frac{13}{24}\) : \(\frac{7}{24}\) : \(\frac{1}{6}\)
= \(\frac{13 : 7 : 4}{24}\) = 13 : 7 : 4
Question 4:
X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They admitted A as a new partner for 1/8th share in the profits, which he took 1/16th from Y and 1/16th from Z. Determine the new profit sharing ratio of X, Y, Z and A.
Solution
X : Y : Z = 3 : 2 : 1
A’s share = \(\frac{1}{8}\)
X’s new share = \(\frac{3}{6}\)
Y’s new share = \(\frac{2}{6}\) – \(\frac{1}{16}\) = \(\frac{16 – 3}{48}\) = \(\frac{13}{48}\)
Z’s new share = \(\frac{1}{6}\) – \(\frac{1}{16}\) = \(\frac{8 – 3}{48}\) = \(\frac{5}{48}\)
New Profit sharing ratio
= \(\frac{3}{6}\) : \(\frac{13}{48}\) : \(\frac{5}{48}\) : \(\frac{1}{8}\)
= \(\frac{24 : 13 : 5 : 6}{48}\) = 24 : 13 : 5 : 6
Question 5:
Bharati and Astha were partners sharing profits in the ratio of 3 : 2. They admitted Dinkar as a 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
Bharati : Astha = 3 : 2
Dinkar’s share = \(\frac{1}{5}\)
Dinkar acquired from Bharati = \(\frac{1}{5}\) \(\times\) \(\frac{1}{2}\) = \(\frac{1}{10}\)
Dinkar acquired from Astha = \(\frac{1}{5}\) \(\times\) \(\frac{1}{2}\) = \(\frac{1}{10}\)
Bharati’s new share = \(\frac{3}{5}\) – \(\frac{1}{10}\) = \(\frac{6 – 1}{10}\)= \(\frac{5}{10}\)
Astha’s new share = \(\frac{2}{5}\) – \(\frac{1}{10}\) = \(\frac{4 – 1}{10}\) = \(\frac{3}{10}\)
New Profit sharing ratio
= \(\frac{5}{10}\) : \(\frac{3}{10}\) : \(\frac{1}{5}\)
= \(\frac{5 : 3 : 2}{10}\) = 5 : 3 : 2
Question 6:
Mohan and Mahesh are partners in a firm sharing profits and losses in the ratio of 3 : 2. Nusrat is admitted as a partner with 1/4th share in profit. Nusrat takes his share from Mohan and Mahesh in the ratio of 2 : 1. Calculate the new profit-sharing ratio.
Solution
Mohan : Mahesh = 3 : 2
Nursat’s share = \(\frac{1}{4}\)
Nursat acquired from Mohan = \(\frac{1}{4}\) \(\times\) \(\frac{2}{3}\) = \(\frac{2}{12}\)
Nursat acquired from Mahesh = \(\frac{1}{4}\) \(\times\) \(\frac{1}{3}\) = \(\frac{1}{12}\)
Mohan’s new share = \(\frac{3}{5}\) – \(\frac{2}{12}\) = \(\frac{36 – 10}{60}\)= \(\frac{26}{60}\)
Mahesh’s new share = \(\frac{2}{5}\) – \(\frac{1}{12}\) = \(\frac{24 – 5}{60}\) = \(\frac{19}{60}\)
New Profit sharing ratio
= \(\frac{24}{60}\) : \(\frac{19}{60}\) : \(\frac{1}{4}\)
= \(\frac{24 : 19 : 15}{10}\) = 24 : 19 : 15
Question 7:
S, B and J were partners in a firm. T was admitted as a partner in the partnership firm for 1/5th share of profits. Calculate the sacrificing ratio of S, B and J.
Solution
S : B : J = 1 : 1 : 1
Question 8:
P and Q were partners in a firm sharing profits in a ratio of 5 : 3. R was admitted for 1/4th share in the profits, of which he took 75% from P and the remaining from Q. Calculate the sacrificing ratio of P and Q.
Solution
R’s Share = \(\frac{1}{4}\)
R acquired from P = \(\frac{1}{4}\) \(\times\) \(\frac{75}{100}\) = \(\frac{3}{16}\)
R acquired from Q = \(\frac{1}{4}\) \(\times\) \(\frac{25}{100}\) = \(\frac{1}{16}\)
P’s new share = \(\frac{5}{8}\) – \(\frac{3}{16}\) = \(\frac{10 – 3}{16}\)= \(\frac{7}{16}\)
Q’s new share = \(\frac{3}{8}\) – \(\frac{1}{16}\) = \(\frac{6 – 1}{16}\) = \(\frac{5}{16}\)
New Profit-sharing ratio
= \(\frac{7}{16}\) : \(\frac{5}{16}\) : \(\frac{1}{4}\)
= \(\frac{7 : 5 : 4}{16}\) = 7 : 5 : 4
Calculation of Scarificing ratio of P and Q
P’ sacrifice = \(\frac{5}{8}\) – \(\frac{7}{16}\) = \(\frac{10 – 7 }{16}\) = \(\frac{3}{16}\)
Q’ sacrifice = \(\frac{3}{8}\) – \(\frac{5}{16}\) = \(\frac{6 – 5 }{16}\) = \(\frac{1}{16}\)
Sacrificing Ratio
= 3 : 1
Question 9:
Adil and Suresh are partners in a firm sharing profits and losses in the ratio of 7 : 3. Adil gave 2/10th from his share and Suresh gave 1/10th from his share to Jagan; the new partner. Calculate new profit-sharing ratio and sacrificing ratio.
Solution
Jagan’s Share = \(\frac{2}{10}\) + \(\frac{1}{10}\) = \(\frac{3}{10}\)
Adil’s new share = \(\frac{7}{10}\) – \(\frac{2}{10}\) = \(\frac{5}{10}\)
Suresh’s new share = \(\frac{3}{10}\) – \(\frac{1}{10}\) = \(\frac{2}{10}\)
New Profit-sharing ratio
= \(\frac{5}{10}\) : \(\frac{2}{10}\) : \(\frac{3}{10}\)
= \(\frac{5 : 2 : 3}{10}\) = 5 : 2 : 3
Calculation of Scarificing ratio of P and Q
P’ sacrifice = \(\frac{7}{10}\) – \(\frac{5}{10}\) = \(\frac{2}{10}\)
Q’ sacrifice = \(\frac{3}{10}\) – \(\frac{2}{10}\) = \(\frac{1}{10}\)
Sacrificing Ratio
= 2 : 1
Question 10:
Find the 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) A, B and C are partners in the ratio of 1/2 : 1/3 : 1/6. D joins the firm as a new partner for 1/6th share in profits. C 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 in the ratio of 5 : 3. C is admitted for 3/10th share of profit half of which was gifted by A and the remaining share was taken by C equally from A and B.
Solution
(i)
R : T = 3 : 2 (O.R.)
R surrenders to S = \(\frac{3}{5}\) \(\times\) \(\frac{1}{4}\) = \(\frac{3}{20}\)
T surrenders to S = \(\frac{2}{5}\) \(\times\) \(\frac{1}{5}\) = \(\frac{2}{25}\)
R’s new share =\(\frac{3}{5}\) – \(\frac{3}{20}\) = \(\frac{9}{20}\)
T’s new share= \(\frac{2}{5}\) – \(\frac{2}{25}\) = \(\frac{8}{25}\)
S’s new share = \(\frac{3}{20}\) + \(\frac{2}{25}\) = \(\frac{23}{100}\)
New Profit-sharing ration
= \(\frac{9}{20}\) – \(\frac{8}{25}\) = \(\frac{23}{100}\)
= \(\frac{45 : 32 : 23 }{100}\) = 45 : 32 : 23
(ii)
Let total share be 1
Remaining share of A & B = 1 – \(\frac{1}{4}\) = \(\frac{3}{4}\)
A’s new share = \(\frac{3}{4}\) \(\times\) \(\frac{2}{3}\) = \(\frac{6}{12}\)
B’s new share = \(\frac{3}{4}\) \(\times\) \(\frac{1}{3}\) = \(\frac{3}{12}\)
New Profit-sharing ratio
= \(\frac{6}{12}\) : \(\frac{3}{12}\) : \(\frac{1}{4}\) = 6 : 3 : 3 = 2 : 1 : 1
(iii)
C aquires from A = \(\frac{1}{5}\) \(\times\) \(\frac{1}{5}\) = \(\frac{1}{25}\)
C aquires from B = \(\frac{1}{5}\) \(\times\) \(\frac{4}{5}\) = \(\frac{4}{25}\)
A’s new share = \(\frac{3}{5}\) – \(\frac{1}{25}\) = \(\frac{14}{25}\)
B’s new share = \(\frac{2}{5}\) – \(\frac{4}{25}\) = \(\frac{6}{25}\)
New Profit-sharing ratio
= \(\frac{14}{25}\) : \(\frac{6}{25}\) : \(\frac{1}{5}\)
= 14 : 6 : 5
(iv)
A : B : C = 3 : 2 : 1 (old ratio)
D’s share = \(\frac{1}{6}\)
C’s share = \(\frac{1}{6}\)
Remaining share of A & B = 1 – \(\frac{1}{6}\) – \(\frac{1}{6}\) = \(\frac{4}{6}\)
A’s new share = \(\frac{4}{6}\) \(\times\) \(\frac{3}{5}\) = \(\frac{12}{30}\)
B’s new share = \(\frac{4}{6}\) \(\times\) \(\frac{2}{5}\) = \(\frac{8}{30}\)
New Profit-sharing ratio
= \(\frac{12}{30}\) : \(\frac{8}{30}\) : \(\frac{1}{6}\) : \(\frac{1}{6}\)
= 12 : 8 : 5 : 5
(v)
A : B = 1 : 1
C’s share = 1 – \(\frac{1}{5}\) – \(\frac{1}{6}\) = \(\frac{19}{30}\)
A’s new share = \(\frac{19}{30}\) \(\times\) \(\frac{1}{2}\) = \(\frac{19}{60}\)
B’s new share = \(\frac{19}{30}\) \(\times\) \(\frac{1}{2}\) = \(\frac{19}{60}\)
New Profit-sharing ratio
= \(\frac{19}{60}\) : \(\frac{19}{60}\) : \(\frac{1}{5}\) : \(\frac{1}{6}\)
= 19 : 19 : 12 : 10
(vi)
A : B = 5 : 3
C’s share = \(\frac{3}{10}\)
A surrenders to C = \(\frac{3}{10}\) \(\times\) \(\frac{1}{2}\) = \(\frac{3}{20}\)
Remaining share of C = \(\frac{3}{10}\) – \(\frac{3}{20}\) = \(\frac{3}{20}\)
Remaining share of C was equally contributed by A & B.
C aquires from A = \(\frac{3}{20}\) \(\times\) \(\frac{1}{2}\) = \(\frac{3}{40}\)
C aquires from B = \(\frac{3}{20}\) \(\times\) \(\frac{1}{2}\) = \(\frac{3}{40}\)
A’s new share = \(\frac{5}{8}\) – \(\frac{3}{20}\) – \(\frac{3}{40}\) = \(\frac{16}{40}\)
B’s new share = \(\frac{3}{8}\) – \(\frac{3}{40}\) = \(\frac{12}{40}\)
New Profit-sharing ratio
= \(\frac{16}{40}\) : \(\frac{12}{40}\) : \(\frac{3}{10}\)
= 16 : 12 : 12 = 4 : 3 : 3
Question 11:
Mahi and Rajat were in partnership sharing profits and losses in the ratio of 4 : 3. They admitted Kripa as a new partner. Kripa brought ₹ 60,000 as her share of goodwill premium which was entirely credited to Mahi’s Capital Account. On the date of admission, goodwill of the firm was valued at ₹ 4,20,000. Calculate the new profit-sharing ratio of Mahi, Rajat, and Kripa.
Solution
Kripa’s new share = \(\frac{Kripa’s\, premium\,for\,goowill}{Goodwill\,of\,the\,firm}\)
\(\quad\quad\quad\quad\quad\) = \(\frac{60,000}{4,20,000}\) = \(\frac{1}{7}\)
Mahi’s new share = \(\frac{4}{7}\) – \(\frac{1}{7}\)= \(\frac{3}{7}\)
Rajat’s new share = \(\frac{3}{7}\) – 0 = \(\frac{3}{7}\)
New profit-sharing ratio
= \(\frac{3}{7} : \frac{3}{7} : \frac{1}{7}\)
= 3 : 3 : 1
Question 12:
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
Rakesh : Suresh = 4 : 3 (Old Ratio)
Rakesh : Suresh : Zaheer = 7 : 4 : 3
Rakesh sacrifice = \(\frac{4}{7}\) – \(\frac{7}{14}\) = \(\frac{1}{14}\)
Suresh sacrifice = \(\frac{3}{7}\) – \(\frac{4}{14}\) = \(\frac{2}{14}\)
Sacrificing ratio of Rakesh & Suresh
= 1 : 2
Question 13:
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
A : B : C = 4 : 3 : 2 (old ratio)
D’s share = \(\frac{1}{3}\)
Let total share be 1.
Remaining share of A, B, & C = 1 – \(\frac{1}{3}\) = \(\frac{2}{3}\)
A’s new share = \(\frac{4}{9}\) \(\times\) \(\frac{2}{3}\) = \(\frac{8}{27}\)
B’s new share = \(\frac{3}{9}\) \(\times\)\(\frac{2}{3}\) = \(\frac{6}{27}\)
C’s new share = \(\frac{2}{9}\)\(\times\)\(\frac{2}{3}\) = \(\frac{4}{27}\)
New profit-sharing ratio
= \(\frac{8}{27}\) : \(\frac{6}{27}\) : \(\frac{4}{27}\) : \(\frac{1}{3}\)
= 8 : 6 : 4 : 9
A sacrifice = \(\frac{4}{9}\) – \(\frac{8}{27}\) = \(\frac{4}{27}\)
B sacrifice = \(\frac{3}{9}\) – \(\frac{6}{27}\) = \(\frac{3}{27}\)
C sacrifice = \(\frac{2}{9}\) – \(\frac{4}{27}\) = \(\frac{2}{27}\)
Sacrificing ratio of A, B, & C
= 4: 3 : 2
Question 14:
Gautam and Yashica are partners sharing profits and losses in the ratio of 3 : 2. They admit Asma into partnership. Gautam gives 1/3rd of his share while Yashica gives 1/10th from his share to Asma. Calculate new profit-sharing ratio and sacrificing ratio.
Solution
Gautam : Yashica = 3 : 2
Gautam surrenders of his share to Asma= \(\frac{3}{5}\) \(\times\) \(\frac{1}{3}\) = \(\frac{3}{15}\)
Yashica surrenders 1/10ths from his share to Asma.
Gautam’s new share = \(\frac{3}{5}\) – \(\frac{3}{15}\) = \(\frac{6}{15}\)
Yashica’s new share = \(\frac{2}{5}\) – \(\frac{1}{10}\) = \(\frac{3}{10}\)
Asma’s share = \(\frac{3}{15}\) + \(\frac{1}{10}\) = \(\frac{6 + 3}{30}\) = \(\frac{9}{30}\)
New profit-sharing ratio
= \(\frac{6}{15}\) : \(\frac{3}{10}\) : \(\frac{9}{30}\)
= \(\frac{12 : 9 : 9}{30}\)
= 12 : 9 : 9
= 4 : 3 : 3
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
A : B :C = 2 : 2 : 1
D’s share = 1/6 th
C will retian his original share.
C’s share = 1/5th
Let total share be 1.
Remaining of A & B = 1 – \(\frac{1}{6}\) – \(\frac{1}{5}\) = \(\frac{30 – 5 – 6 }{30}\) = \(\frac{19}{30}\)
A’s new share = \(\frac{19}{30}\) \(\times\) \(\frac{1}{2}\) = \(\frac{19}{60}\)
B’s new share = \(\frac{19}{30}\) \(\times\) \(\frac{1}{2}\) = \(\frac{19}{60}\)
New profit-sharing ratio
= \(\frac{19}{60}\) : \(\frac{19}{60}\) : \(\frac{1}{5}\) : \(\frac{1}{6}\)
= 19 : 19 : 12 : 10
Sacrificing ratio
A sacrifice = \(\frac{2}{5}\) – \(\frac{19}{60}\) = \(\frac{5}{60}\)
B sacrifice = \(\frac{2}{5}\) – \(\frac{19}{60}\) = \(\frac{5}{60}\)
Sacrificing ratio of A, B, & C
= 5: 5
= 1 : 1
Question 16:
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.
Solution
A : B : C : D = 36 : 24 : 20 : 20
E’s share = 20% = \(\frac{20}{100} = \frac{1}{5}\)
Let total share be 1
Remaining share = 1 – \(\frac{1}{5}\)= \(\frac{4}{5}\)
A’s new share = \(\frac{4}{5} \times \frac{3}{10} = \frac{12}{50}\)
B’s new share = \(\frac{4}{5} \times \frac{4}{10} = \frac{16}{50}\)
C’s new share = \(\frac{4}{5} \times \frac{2}{10} = \frac{8}{50}\)
D’s new share = \(\frac{4}{5} \times \frac{1}{10} = \frac{4}{50}\)
New profit sharing ratio
= \(\frac{12}{50} : \frac{16}{50} : \frac{8}{50} : \frac{4}{50} : \frac{1}{5}\)
= 12 : 16 : 8 : 4 : 10
= 6 : 8 : 4 : 2 : 5
Question 17:
Amit and Vidya are partners sharing profits in the ratio of 3 : 2. They admit Chintan into partnership who acquires 1/5th of his share from Amit and 4/25th share from Vidya. Calculate New Profit sharing ratio and Sacrificing Ratio.
Solution
Calculation of New Profit Sharing Ratio
Amit: Vidya = 3:2 (Old Ratio)
Chintan acquires \(\frac{1}{5}\)th of his share from Amit
And, Remaining \(\frac{4}{5}\)th (\(1 – \frac{1}{5})\) of his share from Vidya.
If \(\frac{4}{5}\)th share of Chintan = \(\frac{4}{25}\)
Chintan’s share = \(\frac{4}{25} \times \frac{5}{4} = \frac{5}{25}\)
Amit’s sacrifice = \(\frac{1}{5} \times \frac{1}{5} = \frac{1}{25}\)
Vidya’s sacrifice = \(\frac{4}{25}\)
Amit’s new share =\(\frac{3}{5} – \frac{1}{25} = \frac{15 – 1}{25} = \frac{14}{25}\)
Vidya’s new share = \(\frac{2}{5} – \frac{4}{25} = \frac{10 – 4}{25} = \frac{6}{25}\)
Chintan’s new share = \(\frac{1}{5} \times \frac{5}{5} = \frac{5}{25}\)
New Profit sharing ratio
= 14 : 6 : 5
Sacrificing Ratio = 1 : 4
Question 18:
Anil and Bimal are partners. They admit Raman as a partner for 1/4 share. You are required to determine:
(a) Profit-sharing ratio between Anil and Bimal before Raman’s admission as a partner.
(b) Profit -sharing ratio after Raman’s admission; and
(c) Sacrificing Ratio
Solution
(a) Since no ratio is given in the question, profit-sharing ratio between Anil and Bimal before Raman’s admission as a partner will be equal
Anil : Bimal = 1 : 1
(b) Anil : Bimal = 1 : 1
Let total share be 1.
Remaining share of Anil and Bimal = 1 – \(\frac{1}{4}\) = \(\frac{3}{4}\)
Anil’s new share = \(\frac{1}{2} \times \frac{3}{4} = \frac{3}{8}\)
Bimal’s new share = \(\frac{1}{2} \times \frac{3}{4} = \frac{3}{8}\)
New profit sharing ratio
= \(\frac{3}{8} : \frac{3}{8} : \frac{1}{4}\)
= 3 : 3 : 2
(C) Anil : Bimal = 1 : 1 (old ratio)
\(\quad\quad\) Anil : Bimal : Raman = 3 : 3 : 2
Anil’s sacrifice = \(\frac{1}{2} – \frac{3}{8} = \frac{1}{8}\)
Bimal’s sacrifice = \(\frac{1}{2} – \frac{3}{8} = \frac{1}{8}\)
Sacrificing ratio
= 1 : 1
Solutions Admission of Partner TS Grewal Class 12 [2025-26]
Admission of a Partner and Treatment of Goodwill
Questions No. 19 to 28
Question 19:
Gold and Silver are partners sharing profits and losses in the ratio of 2 : 5. They admit copper on the condition that he will bring ₹ 14,000 as his share of goodwill to be distributed between Gold and Silver. Copper’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 Copper will be received by Gold and Silver?
Solution
Gold : Silver = 2 : 5
Let total share be 1.
Remaining share of Gold and Silver = 1 – \(\frac{1}{4}\) = \(\frac{3}{4}\)
Gold’s new share = \(\frac{2}{7} \times \frac{3}{4} = \frac{6}{28}\)
Silver’s new share = \(\frac{5}{7} \times \frac{3}{4} = \frac{15}{28}\)
New profit sharing ratio
= \(\frac{6}{28} : \frac{15}{28} : \frac{1}{4}\)
= 6 : 15 : 7
Question 20:
Vimal and Nirmal are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner Kailash is admitted. Vimal gives 1/5th of his share and Nirmal gives 2/5th of his share in favour of Kailash. For the purpose of Kailash’s admission, goodwill of the firm is valued at ₹ 75,000 and Kailash brings his share of goodwill in cash which is retained in the business.
Journalise the above transactions.
Solution
Vimal and Nirmal = 3 : 2 (old ratio)
Share of Profits Kailash will get from Vimal \( \frac{1}{5}\)th of his share
\( = \frac{3}{5} \times \frac{1}{5} = \frac{3}{25}\)
Share of Profits Kailash will get from Nirmal \( \frac{2}{5}\)th of his share
\( = \frac{2}{5} \times \frac{2}{5} = \frac{4}{25}\)
Remaining of –
Vimal \( = \frac{3}{5} – \frac{3}{25} = \frac{12}{25}\)
Nirmal \( = \frac{2}{5} – \frac{4}{25} = \frac{6}{25}\)
Share of Kailash \( = \frac{3}{25} + \frac{4}{25} = \frac{7}{25}\)
New Profit sharing ratio of Vimal, Nirmal and Kailash =
\( \frac{12}{25} : \frac{6}{25} : \frac{7}{25}\)
Kailash brings his share of goodwill in cash =
\( 75{,}000 \times \frac{7}{25} = 21{,}000 \)
Vimal and Nirmal will be compensated in sacrificing =3 : 4
Vimal \( = \frac{21{,}000 \times 3}{7} = 9{,}000 \)
Nirmal \( = \frac{21{,}000 \times 4}{7} = 12{,}000 \)
Journal Entry for Goodwill:
Bank A/c Dr.\(\quad\) 21,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\)21,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 21,000
\(\quad \quad\) To Vimal’s Capital A/c \(\quad\quad\quad\quad\quad\quad\quad\)9,000
\(\quad \quad\)To Nirmal Capital A/c \(\quad\quad\quad\quad\quad\quad\quad\) 12,000
(Being partners compensated in sacrificing ratio 3:4)
____________________________________________________
Question 21:
Pass 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 ₹ 20,000 for 1/4th share of the profits, 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 ₹ 21,000 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.
Solution
(a)
Cash A/c Dr.\(\quad\) 20,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\quad\)20,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 20,000
\(\quad \quad\) To B’s Capital A/c \(\quad\quad\quad\quad\quad\quad\)12,000
\(\quad \quad\)To C’s Capital A/c \(\quad\quad\quad\quad\quad\quad\) 8,000
(Being partners compensated in sacrificing ratio 3:2)
____________________________________________________
(b)
Cash A/c Dr.\(\quad\) 21,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\quad\)21,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 21,000
\(\quad \quad\) To B’s Capital A/c \(\quad\quad\quad\quad\quad\quad\) 14,000
\(\quad \quad\)To C’s Capital A/c \(\quad\quad\quad\quad\quad\quad\) 7,000
(Being partners compensated in sacrificing ratio 2:1)
____________________________________________________
Question 22:
B and C are in partnership sharing profits and losses as 3 : 1. They admit D as partner in the firm, D pays premium of ₹ 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future profits and losses equally.
Draft Journal entries showing appropriations of the premium money.
Solution
\(\quad\quad\quad\) Journal Entries
Cash A/c Dr.\(\quad\) 15,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\) 15,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 15,000
C’s Capital A/c Dr. \(\quad\quad\quad\) 3,750
\(\quad \quad\) To B’s Capital A/c \(\quad\quad\quad\quad\quad\) 18,750
(Being partners compensated in sacrificing ratio)
____________________________________________________
Working Notes:
B : C = 3 : 1 (old ratio)
D = \(\frac{1}{3}\)
Let total share be 1
Remaining share of B & C = 1 – \(\frac{1}{3}\) = \(\frac{2}{3}\)
B’s new share = \(\frac{2}{3}\times \frac{1}{2}\) = \(\frac{2}{6}\)
C’s new share = \(\frac{2}{3}\times \frac{1}{2}\) = \(\frac{2}{6}\)
New Profit-sharing ratio
= \(\frac{2}{6} : \frac{2}{6} : \frac{1}{3}\)
= 2 : 2 : 2
= 1 : 1 : 1
Calculation of Sacrificing ratio
B = \(\frac{3}{4} -\frac{1}{3}\) = \(\frac{5}{12}\) (sacrifice)
C = \(\frac{1}{4} – \frac{1}{3}\) = -\(\frac{1}{12}\) (gain)
Goodwill of the firm = 15,000 \(\times\) 3 = 45,000
C will bring = 45,000 \(\times\) \(\frac{1}{12}\) = 3,750
B’s share in goodwill = 45,000 \(\times\) \(\frac{5}{12}\) = 18,750
Question 23:
Geeta and Meeta are partners in a firm sharing profits in the ratio of 3 : 2. They admit Anita as a new partner. The new profit sharing ratio between Geeta, Sunita and Anita will be 5 : 3 : 2. Anita brought in ₹ 25,000 for her share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.
Solution
\(\quad\quad\quad\) Journal Entries
Cash A/c Dr.\(\quad\) 25,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\) 25,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 25,000
\(\quad \quad\) To Geeta’s Capital A/c \(\quad\quad\quad\quad\quad\) 12,500
\(\quad \quad\) To Meeta’s Capital A/c \(\quad\quad\quad\quad\quad\) 12,500
(Being partners compensated in sacrificing ratio)
____________________________________________________
Working Notes:
Geeta : Meeta = 3 : 2
Geeta : Meeta : Anita = 5 : 3 : 2
Geeta’s sacrifice = \(\frac{3}{5} – \frac{5}{10} = \frac{1}{10}\)
Meeta’s sacrifice = \(\frac{2}{5} – \frac{3}{10} = \frac{1}{10}\)
Sacrificing ratio = 1 : 1
Question 24:
A and B are in partnership sharing profits and 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.
Pass Journal entries and also calculate future profit sharing ratio of the partners.
Solution
\(\quad\quad\quad\) Journal Entries
Cash A/c Dr.\(\quad\) 52,000
\(\quad \quad\quad\) To C’s Capital A/c \(\quad\quad\quad\) 40,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\) 12,000
(Being Goodwill brought in Cash)
____________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 12,000
\(\quad \quad\) To A’s Capital A/c \(\quad\quad\quad\quad\quad\) 6,000
\(\quad \quad\) To B’s Capital A/c \(\quad\quad\quad\quad\quad\) 6,000
(Being partners compensated in sacrificing ratio 1 : 1)
____________________________________________________
Calculation of New Profit-sharing ratio
A : B = 5 : 3
C’s share = \(\frac{1}{5}\)
C takes 1/10th from A and 1/10th from B.
A’s new share = \(\frac{5}{8}- \frac{1}{10} = \frac{25 – 4}{40} = \frac{21}{40}\)
B’s new share = \(\frac{3}{8}- \frac{1}{10} = \frac{15 – 4}{40} = \frac{11}{40}\)
New profit-sharing ratio
\(\frac{21}{40} : \frac{11}{40} : \frac{1}{5}\)
= 21 : 11 : 8
Question 25:
Adil and Bhavya are partners sharing profits and losses in the ratio of 7 : 5. They admit Cris, their Manager, into partnership who is to get 1/6th share in the business. Cris brings ₹ 1,00,000 for his capital and ₹ 36,000 for the 1/6th share of goodwill which he acquires 1/24th from Adil and 1/8th from Bhavya. Profit for the first year of the new partnership was ₹ 2,40,000.
Pass necessary Journal entries for Cris’s admission and apportion the profit between the partners.
Solution
\(\quad\quad\quad\) Journal Entries
Cash A/c Dr.\(\quad\) 1,36,000
\(\quad \quad\quad\) To Cris’s Capital A/c \(\quad\quad\quad\) 1,00,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\) 36,000
(Being Goodwill brought in Cash)
_________________________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 36,000
\(\quad \quad\) To Adil’s Capital A/c \(\quad\quad\quad\quad\quad\) 9,000
\(\quad \quad\) To Bhavya’s Capital A/c \(\quad\quad\quad\quad\quad\) 27,000
(Being partners compensated in sacrificing ratio 1 : 3)
_________________________________________________________________
Profit & Loss A/c Dr. \(\quad\) 2,40,000
\(\quad \quad\) To Adil’s Capital A/c \(\quad\quad\quad\quad\quad\) 1,30,000
\(\quad \quad\) To Bhavya’s Capital A/c \(\quad\quad\quad\quad\quad\) 70,000
\(\quad \quad\) To Cris’s Capital A/c \(\quad\quad\quad\quad\quad\) 40,000
(Being profits distributed in 13 : 7 : 4 at the end of the year)
——————————————————————————-
Calculation of New Profit-sharing ratio
Adil : Bhavya = 7 : 5
Cris’s share = \(\frac{1}{6}\)
Cris takes 1/24th from Adil and 1/8th from Bhavya.
Adil’s new share = \(\frac{7}{12}- \frac{1}{24} = \frac{14 – 1}{24} = \frac{13}{24}\)
Bhavya’s new share = \(\frac{5}{12}- \frac{1}{8} = \frac{10 – 3}{24} = \frac{7}{24}\)
New profit-sharing ratio
\(\frac{13}{24} : \frac{7}{24} : \frac{1}{6} \)
= 13 : 7 : 4
Sacrificing ratio = 1 : 3
Question 26:
Aayush and Aarushi are partners sharing profits and losses in the ratio of 3 : 2. They admitted Naveen into partnership for 1/4th share. Goodwill of the firm was to be valued at three year’s purchase of super profits. Average net profit of the firm was ₹ 20,000. Capital investment in the business was ₹ 50,000 and Normal Rate of Return was 10%. Calculate the amount of Goodwill premium brought by Naveen.
Solution
Calculation of Goodwill of the Firm
Normal Profit = Capital Employed \(\times\) Noraml Rate of return
\(\quad\quad\) = 50,000 \(\times\) 10% = 5,000
Super Profit = Average Profit – Nornal Profit = 20,000 – 5,000 = 15,000
Goodwill = Super Profit \(\times\) 3 years’ of purchase = 15,000 \(\times\) = 45,000
Amount of Goodwill premium brought by Naveen = 45,000 \(\times\) \(\frac{1}{4}\)= ₹ 11,250
Question 27:
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 ₹ 30,000 as capital and ₹ 10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at ₹ 3,000. New Profit sharing ratio of the partners will be 5 : 3 : 2.
Pass necessary Journal entries.
Solution
\(\quad\quad\quad\) Journal Entries
Cash A/c Dr.\(\quad\) 40,000
\(\quad \quad\quad\) To C’s Capital A/c \(\quad\quad\quad\) 30,000
\(\quad \quad\quad\) To Premium for Goodwill A/c \(\quad\) 10,000
(Being Goodwill brought in Cash)
_________________________________________________________________
Premium for Goodwill A/c Dr. \(\quad\) 10,000
\(\quad \quad\) To A’s Capital A/c \(\quad\quad\quad\quad\quad\) 5,000
\(\quad \quad\) To B’s Capital A/c \(\quad\quad\quad\quad\quad\) 5,000
(Being partners compensated in sacrificing ratio 1 : 1)
_________________________________________________________________
A’s Capital A/c Dr. \(\quad\) 5,000
B’s Capital A/c Dr. \(\quad\) 5,000
\(\quad \quad\) To Goodwill A/c \(\quad\quad\quad\quad\quad\) 10,000
(Being goodwill appeared wriiten off in old ratio.)
——————————————————————————-
Question 28:
X and Y are partners sharing profits in the ratio of 5 : 3. Z is admitted as a partner for 3/10th share of profit, half of which was gifted by X and remaining share was taken by Z equally from X and Y. The goodwill of the firm is valued at ₹ 54,000. Z brings in his requisite share of firm’s goodwill. The profit for the first year of new partnership amounts to ₹ 60,000.
Pass the necessary Journal entries to adjust goodwill and to distribute profits.
Premium for Goodwill brought in Kind
Question No. 29
Question 29:
Ram and Mohan are partners in a firm sharing profits in the ratio of 3 : 2. on 1st April, they admit Sohan as a partner for 1/4th share in the profits. Sohan 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 Sohan, the goodwill of the firm was valued at ₹ 6,00,000.
Pass necessary Journal entries in the books of the firm on Sohan’s admission if:
i) Partners do not withdraw the share of goodwill.
ii) Partners withdraw half of their share of goodwill.
When Premium for Goodwill is brought by New or Incoming Partner and is withdrawn by Old Partners Fully or Partly
Question Nos. 30 to 32
Question 30:
A and B are partners in a business sharing profits and losses in the ratio of 1/3rd and 2/3rd. On 1st April, 2022, their capitals were ₹ 80,000 and ₹ 1,00,000 respectively. On that date, they admit C in partnership and give him 1/4th share in the future profits. C brings ₹ 80,000 as his capital and ₹ 60,000 as goodwill. The amount of goodwill is withdrawn by the old partners in cash. Pass the Journal entries and show the capital accounts of all the partners. Calculate proportion in which partners would share profits and losses in future.
Question 31:
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.
Question 32:
Mahesh and Suresh were partners in a firm sharing profits and losses in the ratio of 2 : 1. They decided to admit Nita into partnership with 1/4th share in the profits. Nita brought ₹ 2,00,000 for her capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at ₹ 12,00,000. The new profit sharing ratio of the partners is 2 : 1 : 1. Mahesh and Suresh withdraw their share of goodwill. Pass necessary Journal entries in the books of the firm for the above transactions.
When Only Part of Premium for Goodwill is brought by New Partner
Question Nos. 33 &b 34
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 of ₹ 10,000 for goodwill. Before admission, goodwill existed in the books at ₹ 18,000. Pass Journal entries to give effect to the above arrangement.
Question 34:
Rohit and Mohit were partners in a firm sharing profits and losses in the ratio of 3 : 2. Rahul was admitted into partnership for 1/3 share in profits. Goodwill of the firm was valued at ₹ 30,000. Rahul brought ₹ 40,000 as capital and ₹ 5,000 out of his share of goodwill premium in cash. At the time of Rahul’s admission, goodwill was appearing in the books of the firm at ₹ 15,000.
Pass necessary Journal entries for the above transactions in the books of the firm on Rahul’s admission.
When New or Incoming Partner is not able to bring his Share of Premium for Goodwill
Question No. 35 & 36
Hidden Goodwill
Question No. 37 to 41
Revaluation of Assets and Reassement of Liabilities
Question Nos. 42 to 50
Question 42:
Arun and Vijay are partners in a firm sharing profits & loss in the ratio of 3 : 2.
| Liabilities | ₹ | Assets | ₹ |
| Machinery | 2,00,000 |
If the value of machinery in the Balance Sheet is excess by 33 and 1/3%, find the value of machinery to be shown in the New Balance Sheet.
Solution
Let the current value of Machinery be x
x + \(\frac{1}{3}\)x = 2,00000
\(\frac{4}{3}\)x = 2,00,000
x = 2,00,000 \(\times \frac{3}{4}\) = 1,50,000
The value of machinery to be shown in the New Balance Sheet = 1,50,000
Question 43:
Pass entries in the firm’s Journal for the following on admission of a partner:
(i) Machinery be reduced 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) Provisions for warranty claims be increased by ₹ 12,000.
(iv) Furniture (Books Value ₹ 50,000) is to be reduced by 40%.
(v) Furniture (Books Value ₹ 50,000) is to be reduced to 40%.
Solution
(i)
Revaluation A/c Dr. 16,000
\(\quad\quad\) To Machinery A/c 16,000
(Being value of machinery reduced.)
Building A/c Dr. 40,000
\(\quad\quad\) To Revaluation A/c 40,000
(Being value of building appreciated.)
(ii)
Revaluation A/c Dr. 4,000
\(\quad\quad\) To Provision for doubtful A/c 4,000
(Being provision for doubtful debts @ 5% created on debtors.)
(iii)
Revaluation A/c Dr. 4,000
\(\quad\quad\) To Provision for warranty claims A/c 4,000
(Being provision for warranty claims created.)
(iv)
Revaluation A/c Dr. 20,000
\(\quad\quad\) To Furniture A/c 20,000
(Being value of furniture @ 40% reduced.)
(v)
Revaluation A/c Dr. 30,000
\(\quad\quad\) To Furniture A/c 30,000
(Being value of furniture @ 60% reduced.)
Question 44:
Pass entries in firm’s Journal for the following on admission of a partner:
(i) Unrecorded Investments of ₹ 20,000 are to be accounted.
(ii) Unrecorded liability towards suppliers for ₹ 5,000 is to be accounted.
(iii) An item of ₹ 1,600 included in Sundry Creditors is not likely to be claimed and hence should be written back.
Solution
(i)
Investment A/c Dr. 20,000
\(\quad\quad\) To Revaluation A/c 20,000
(Being unrecorded investment recorded.)
(ii)
Revaluation A/c Dr. 5,000
\(\quad\quad\) To Creditors’ A/c 5,000
(Being unrecorded liabilities towards suppliers recorded.)
(iii)
Sundry Creditors A/c Dr. 1,600
\(\quad\quad\) To Revaluation A/c 1,600
(Being sundry creditors written back.)
Question 45:
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a 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 by X and Y in their profit sharing at book value. Remaining investments were valued at ₹ 50,000. Pass the necessary Journal entries.
Question 46:
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed new profit sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts existed at ₹ 50,000 and ₹ 5,000 respectively. All debtors are good. Pass the necessary Journal entries.
Question 47:
Ashok and Bhaskar are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Chaman as a partner for 1/4th share of profits. At the time of admission of Chaman, Sundry Debtors and Provision for Doubtful Debts existed 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.
Question 48:
At the time of admission of a partner Suresh, assets and liabilities of Ramesh and Naresh 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% (Books value of Building ₹ 2,00,000).
d) Unrecorded Investments were valued at ₹ 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.
Question 49:
Question 50:
Question 51:
Question 52:
Question 53:
Question 54:
Preparation of Revaluation Account and Partner’s Capital Accounts
Question Nos. 55 to 56
Question 55:
Their Balance Sheet as on 31st March, 2023 was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors General Reserve Capital A/cs: Amit Anil | 58,000 12,000 1,80,000 1,50,000 | Cash in Hand Cash at Bank Sundry Debtors Stock Machinery Building | 5,000 45,000 60,000 40,000 1,00,000 1,50,000 |
| 4,00,000 | 4,00,000 |
Ankit is admitted as a partner on the date of the Balance Sheet on the following terms:
(a) Ankit will being in ₹ 1,00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4th share in profits.
(b) Machinery 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) General Reserve will continue to appear in the books of the reconstituted firm at its original value.
(e) A Provision for Doubtful Debts is to be created at 5% of debtors.
(f) Creditors were unrecorded to the extent of ₹ 1,000.
Prepare Revaluation Account and Partner’s Capital Accounts.
Solution
\(\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\)Revaluation A/c
| Particulars | ₹ | Particulars | ₹ |
| To Stock A/c | 4,000 | By Machinery A/c | 20,000 |
| To Provision for doubtful debts | 3,000 | By Building A/c | 15,000 |
| To Creditors A/c | 1,000 | ||
| To Profit trfd to: | |||
| Amit’s capital 18,000 | |||
| Anil’s capital 9,000 | 27,000 | ||
| 35,000 | 35,000 |
\(\quad\quad\quad\quad\quad\quad\quad\quad\quad\) Parrtners’ Capital Account
| Particulars | Amit | Anil | Ankit | Particulars | Amit | Anil | Ankit |
| To Balance c/d | 2,40,000 | 1,80000 | 1,00,000 | By Balance b/d | 180,000 | 1,50,000 | – |
| By Bank A/c | – | – | 1,00,000 | ||||
| By Premium for goodwill | 40,000 | 20,000 | – | ||||
| By Revaluation (Profit) A/c | 18,000 | 9,000 | – | ||||
| By Ankit’s current A/c | 2,000 | 1,000 | – | ||||
| 2,40,000 | 180,000 | 1,00000 | 240,000 | 1,80,000 | 1,00,000 |
Question 56:
Vimal and Nirmal are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admit Kailash into the firm on 1st April 2023, when their Balance Sheet was as follows:
| Liabilities | ₹ | Assets | ₹ |
| Vimal’s Capital Nirmal’s Capital General Reserve Bank Loan Creditors | 32,000 34,000 8,000 6,000 6,000 | Goodwill Machinery Furniture Debtors Stock Cash | 8,000 38,000 5,000 23,000 7,000 5,000 |
| 86,000 | 86,000 |
Term’s of Kailash’s admission were as follows:
(I) Kailash will bring ₹ 30,000 as his share of capital and will be entitled to 1/3rd share in the profits.
(ii) Kailash is not to bring goodwill in cash, Vimal and Nirmal raise the goodwill in the books.
(iii) Goodwill of the firm is valued on the basis of 2 year’s purchase of the average profit of the last three years.
Average profit of the last three years is ₹ 6,000.
(iv) Machinery and stock are revalued at ₹ 45,000 and ₹ 8,000 respectively.
Prepare a Revaluation Account and Partner’s Capital Accounts incorporating the above adjustments.
Question 57:
X, Y and Z are equal partners with capitals of ₹ 15,000; ₹ 17,500 and ₹ 20,000 respectively. They agree to admit W into equal partnership upon payment in cash ₹ 15,000 for 1/4th share of the goodwill and ₹ 18,000 as his capital, both sums to remain in the business. The liabilities of the old firm were ₹ 30,000 and the assets, apart from cash, consist of Motors ₹ 12,000, Furniture ₹ 4,000, Stock ₹ 26,500 and Debtors ₹ 37,800. The Motors and Furniture were revalued at ₹ 9,500 and ₹ 3,800 respectively.
Pass Journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.
Question 58:
Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 : 1 as at 31st March, 2023:
| Liabilities | ₹ | Assets | ₹ |
| Capital A/cs: A B Sundry Creditors | 15,000 10,000 32,950 | Building Plant and Machinery Stock Sundry Debtors Cash in Hand | 25,000 17,500 10,000 4,850 600 |
| 57,950 | 57,950 |
They admit C into partnership on 1st April, 2023 on the following terms:
(a) C was to being ₹ 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 on respect of Sundry Debtors ₹ 375.
(d) Building was to be appreciated by 10%.
Pass necessary Journal entries to give effect to the arrangements. Prepare Profit & Loss Adjustment Account (or Revaluation Account), Partner’s Capital Accounts and Balance Sheet of the new firm.
Solution
\[
\begin{array}{|l|c|l|c|}
\hline
\multicolumn{2}{|c|}{\textbf{Dr.}} & \multicolumn{2}{c|}{\textbf{Cr.}} \\
\hline
\textbf{Particulars} & \textbf{₹} & \textbf{Particulars} & \textbf{₹} \\
\hline
\text{To Stock A/c} & 500 & \text{By Building A/c} & 2500 \\
\text{To Plant \& Machinery A/c} & 875 & & \\
\text{To Provision for Doubtful Debts A/c} & 375 & & \\
\text{To Profit on Revaluation A/c} & & & \\
\quad A & 500 & & \\
\quad B & 250 & & \\
\hline
& 2500 & & 2500 \\
\hline
\end{array}
\]
