ADMISSION OF A PARTNER
1. When the incoming partner acquires his share from existing partners in
their profit sharing ratio, the steps for calculation of new profit sharing
ratio are given as
(i) Calculate old partners’ new share as part of combined share
(ii) Convert the new shares of all partners and find out the new
profit sharing ratio.
(iii) Calculate combined share of old partners in the new firm by
deducting new partners share from (i)
Arrange the steps in the correct
order
a. (i),(ii),(iii)
b. (iii),(i),(ii)
c. (ii),(iii),(i)
d. (D)(iii),(ii),(i)
2. Angle and Circle ware partners in a firm. Their Balance Sheet showed
Furniture at ₹ 2,00,000; Stock at ₹ 1,40,000; Debtors at ₹ 1,62,000
andCreditors at ₹ 60,000.Square was admitted and new profit-sharing ratio
was agreed at 2:3:5. Stock was revalued at ₹ 1,00,000, Creditors of ₹
15,000are not likely to be claimed, Debtors for ₹ 2,000have become
irrecoverable and Provision for doubtful debts to be provided @ 10%.
Angle’s share in loss on revaluation amounted to ₹ 30,000.Revalued value
of Furniture will be:
a. ₹ 2,17,000
b. ₹ 1,03,000
c. ₹ 3,03,000
d. ₹ 1,83,000
3. A and B are partners sharing profits in the ratio 4:3. They admitted C as a
new partner who get 1/7th share of profit, entirely from A. The new profit
sharing ratio will be :
a. 3:3:1
b. 4:3:1
c. 3:3:2
d. 4:3:2
4.SWB enterprises is a partnership business with Brian, Williams and Sania as
partners engaged in production and sales of electrical items and equipment.
The capital contribution were 5 lakh, 5 lakh and 8 lakh respectively with the
profit sharing ratio of 5:5:8. Their Balance sheet showed machinery ₹100000;
stock ₹ 50000; P/L A/C (Dr. balance) ₹9000. As they are now looking forward
to expand their business it was decided that they would bring in sufficient cash
to double their respective capitals.
This was duly followed by Brian and Williams but due to unavoidable
explanation Sania could not do so and ultimately it was agreed that to the
shortfall in the required capital, a new partner should be admitted who would
bring in the amount that Sonia could not bring; and that the new partner would
get share of profits equal to half of Sania share which would be sacrificed by
Sania only. Consequently to this agreement Ezaz was admitted and he brought
in the required capital and ₹ 30000 as premium for goodwill. The machinery
was revalued at ₹120000 and Stock decreased by ₹11000.
Based on the above information you are required to answer the following
questions:-
I. How will the P/L A/C (dr. balance) be treated?
(A) Debited to revaluation account
(B) Credited to Revaluation Account
(C) Debited to Partner’s Capital Account
(D) Credited to Partner’s Capital Account
II.The amount of capital to be brought in by the new partner is…………..
(A) Rs.500000
(B) Rs.50000
(C) Rs.800000
(D) Rs.80000
III.What is William’s share of Revaluation Profit or Loss?
(A) Profit Rs.5000
(B) Loss Rs. 5000
(C) Profit Rs. 2500
(D) Loss Rs.2500
IV.The admission of new partner will lead to
(A) Dissolution of Partnership
(B) Dissolution of Partnership firm.
(C) Reconstitution of Partnership Firm
(D) All of these.
5.The following was the Balance Sheet of Arun, Bablu and Chetan sharing profits
and losses in the ratio of 6:5:3 respectively.
Balance Sheet
Amount Amount
Liabilites (₹) Assets (₹)
Creditors 9,000 Land and Buildings 24,000
Bills Payable 3,000 Furniture 3,500
Capital Accounts Stock 14,000
Arun 19,000 Debtors 12,600
Bablu 16,000 Cash 900
Chetan 8,000 43,000
55,000 55,000
They agreed to take Deepak into partnership and give him a share of 1/8 on the
following terms:
(a) That Deepak should bring in ₹ 4,200 as goodwill and ₹ 7,000 as his Capital;
(b) That furniture be depreciated by 12%;
(c) That stock be depreciated by 10% ;
(d) That a Reserve of 5% be created for doubtful debts;
(e) That the value of land and buildings having appreciated be brought upto ₹
31,000;
(f) That after making the adjustments the capital accounts of the old partners
(who continue to share in the same proportion as before) be adjusted on the
basis of the proportion of Deepak’s Capital to his share in the business, i.e.,
actual cash to be paid off to, or brought in by the old partners as the case may
be.
Prepare Cash Account, Profit and Loss Adjustment Account (Revaluation
Account), Capital A/C and the Opening Balance Sheet of the new firm.
