CBSE Class 12 Accountancy Admission of A Partner Worksheet Set C

Question. Which of the following is not the reconstitution of partnership?
(a) Admission of a partner
(b) Dissolution of Partnership
(c) Change in Profit Sharing Ratio
(d) Retirement of a partner
Answer: B

Question. On the admission of a new partner:
(a) Old partnership is dissolved
(b) Both old partnership and firm are dissolved
(c) Old firm is dissolved
(d) None of the above
Answer: A

Question. Sacrificing ratio is used to distribute ------------------ in case of admission of a partner.
(a) Goodwill
(b) Revaluation Profit or Loss
(c) Profit and Loss Account (Credit Balance)
(d) Both b and c
Answer: A

Question. “At the time of admission, old partnership comes to an end”. Is the statement true or false?
Answer: True

Question. Himanshu and Naman share profits & losses equally. Their capitals were \( \text{Rs. } 1,20,000 \) and \( \text{Rs. } 80,000 \) respectively. There was also a balance of \( \text{Rs. } 60,000 \) in General reserve and revaluation gain amounted to \( \text{Rs. } 15,000 \). They admit friend Ashish with \( 1/5 \) share. Ashish brings \( \text{Rs. } 90,000 \) as capital. Calculate the amount of goodwill of the firm.
(a) \( \text{Rs. } 1,00,000 \)
(b) \( \text{Rs. } 85,000 \)
(c) \( \text{Rs. } 20,000 \)
(d) None of the above
Answer: B

Question. Yash and Manan are partners sharing profits in the ratio of \( 2:1 \). They admit Kushagra into partnership for \( 25\% \) share of profit. Kushagra acquired the share from old partners in the ratio of \( 3:2 \). The new profit sharing ratio will be:
(a) \( 14:31:15 \)
(b) \( 3:2:1 \)
(c) \( 31:14:15 \)
(d) \( 2:3:1 \)
Answer: C

Question. A and B are partners sharing profit and losses in ratio of \( 5:3 \). C is admitted for \( 1/4^{th} \) share. On the date of reconstitution, the debtors stood at \( \text{Rs } 40,000 \), bill receivable stood at \( \text{Rs. } 10,000 \) and the provision for doubtful debts appeared at \( \text{Rs. } 4000 \). A bill receivable, of \( \text{Rs } 10,000 \) which was discounted from the bank, earlier has been reported to be dishonored. The firm has sold, the debtor so arising to a debt collection agency at a loss of \( 40\% \). If bad debts now have arisen for \( \text{Rs } 6,000 \) and firm decides to maintain provisions at same rate as before then amount of Provision to be debited to Revaluation Account would be:
(a) \( \text{Rs } 4,400 \)
(b) \( \text{Rs } 4,000 \)
(c) \( \text{Rs } 3,400 \)
(d) None of the above
Answer: C

Question. Heena and Sudha share Profit & Loss equally. Their capitals were \( \text{Rs. } 1,20,000 \) and \( \text{Rs. } 80,000 \) respectively. There was also a balance of \( \text{Rs. } 60,000 \) in General reserve and revaluation gain amounted to \( \text{Rs. } 15,000 \). They admit friend Teena with \( 1/5 \) share. Teena brings \( \text{Rs. } 90,000 \) as capital. Calculate the amount of goodwill of the firm.
(a) \( \text{Rs. } 85,000 \)
(b) \( \text{Rs. } 1,00,000 \)
(c) \( \text{Rs. } 20,000 \)
(d) None of the above
Answer: A

Question. “As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a new partner if it is agreed in the Partnership Deed”. Is the statement True or False?
Answer: False

Question. Which of the following is not true with respect to Admission of a partner?
(a) A new partner can be admitted if it is agreed in the partnership deed.
(b) If all the partners agree, a new partner can be admitted.
(c) A new partner has to bring relatively higher capital as compared to the existing partners
(d) A new partner gets right in the assets of the firm
Answer: C

Question. As per ---------, only purchased goodwill can be shown in the Balance Sheet.
(a) AS 37
(b) AS 26
(c) Section 37
(d) AS 37
Answer: B

Question. “A newly admitted partner cannot pay his share of the goodwill to the sacrificing partners privately”. Is the statement True or False?
Answer: False

Question. “Unless agreed otherwise, Sacrificing Ratio of the old partners will be the same as their Old Profit Sharing Ratio”. Is the statement True or False?
Answer: True

Question. A, and B are partners sharing profits in the ratio of \( 2:3 \). Their balance sheet shows machinery at ₹\( 2,00,000 \); stock ₹\( 80,000 \), and debtors at ₹\( 1,60,000 \). C is admitted and the new profit sharing ratio is \( 6:9:5 \). Machinery is revalued at ₹\( 1,40,000 \) and a provision is made for doubtful debts \( @5\% \). A’s share in loss on revaluation amount to ₹\( 20,000 \). Revalued value of stock will be:
(a) ₹\( 62,000 \)
(b) ₹\( 1,00,000 \)
(c) ₹\( 60,000 \)
(d) ₹\( 98,000 \)
Answer: C

Question. At the time of admission of a partner, Employees Provident Fund is:
(a) Distributed to partners in the old profit sharing ratio
(b) Distributed to partners in the new profit sharing ratio
(c) Adjusted through gaining ratio
(d) None of the above
Answer: D

Question. If at the time of admission if there is some unrecorded liability, it will be ------------- to -------------- Account.
(a) Debited, Revaluation
(b) Credited, Revaluation
(c) Debited, Goodwill
(d) Credited, Partners’ Capital
Answer: A

Question. At the time of admission of a new partner, the balance of Workmen Compensation Reserve will be transferred to:
(a) Old partners in the old profit sharing ratio
(b) Sacrificing partners in the sacrificing ratio
(c) Revaluation Account
(d) All partners in the new profit sharing ratio
Answer: A

Question. The firm of P, Q and R with profit sharing ratio of \( 6:3:1 \), had the balance in General Reserve Account amounting \( \text{Rs. } 1,80,000 \). S joined as a new partner and the new profit sharing ratio was decided to be \( 3:3:3:1 \). Partners decide to keep the General Reserve unchanged in the books of accounts. The effect will be:
(a) P will be credited by \( \text{Rs. } 54,000 \)
(b) P will be debited by \( \text{Rs. } 54,000 \)
(c) P will be credited by \( \text{Rs. } 36,000 \)
(d) P will be credited by \( \text{Rs. } 36,000 \)
Answer: A

Question. Which statement is true with respect to AS-26?
(a) Purchased goodwill can be shown in the Balance Sheet
(b) Revalued goodwill can be shown in the Balance Sheet
(c) Both purchased goodwill and revalued can be shown in the Balance Sheet
(d) None of the above
Answer: A

Question. Premium brought by newly admitted partner should be:
(a) Credited to sacrificing partners
(b) Credited to all partners in the new profit sharing ratio
(c) Credited to old partners in the old profit sharing ratio
(d) Credited to only gaining partners
Answer: A

Question. Sacrificing ratio is calculated because:
(a) Profit shown by Revaluation Account can be credited to sacrificing partners
(b) Goodwill brought in by the incoming partner can be credited to the new partner
(c) Goodwill brought in by the incoming partner can be credited to the sacrificing partners
(d) Both a and c
Answer: C

Question. Aryaman and Bholu are partners sharing profit and losses in ratio of \( 5:3 \). Chirag is admitted for \( 1/4^{th} \) share. On the date of reconstitution, the debtors stood at \( \text{Rs } 40,000 \), bill receivable stood at \( \text{Rs. } 10,000 \) and the provision for doubtful debts appeared at \( \text{Rs. } 4000 \). A bill receivable, of \( \text{Rs } 10,000 \) which was discounted from the bank, earlier has been reported to be dishonored. The firm has sold, the debtor so arising to a debt collection agency at a loss of \( 40\% \). If bad debts now have arisen for \( \text{Rs } 6,000 \) and firm decides to maintain provisions at same rate as before then amount of Provision to be debited to Revaluation Account would be:
(a) \( \text{Rs } 4,400 \)
(b) \( \text{Rs } 4,000 \)
(c) \( \text{Rs. } 3,400 \)
(d) None of the above
Answer: C

Question. Revaluation Account is a ------------ Account.
(a) Real
(b) Nominal
(c) Personal
(d) Liability
Answer: B

Question. Match the following:
i. Sacrificing Ratio A Nominal Account
ii. Gaining Ratio B Reconstitution of Partnership
iii. Revaluation Account C New Ratio – Old Ratio
iv. Admission of a Partner D Old Ratio – New Ratio
(a) i- B, ii-C, iii-A, iv-D
(b) i- D, ii-B, iii-A, iv-C
(c) i- D, ii-C, iii-A, iv-B
(d) i- D, ii-C, iii-B, iv-A
Answer: C

Question. Match the following with respect to journal entries for treatment of goodwill.
i. Incoming partner brings his share of goodwill | A No Entry
ii. Incoming partner does not bring his share of goodwill | B Premium for Goodwill A/c Dr. To Sacrificing Partners Capital A/c
iii. Incoming partner pays his share of goodwill privately | C Incoming Partner’s Capital A/c Dr. To Sacrificing Partners Capital A/c
iv. Incoming partner brings only a part of his share of goodwill | D Premium for Goodwill A/c Dr. Incoming Partner’s Capital A/c Dr. To Sacrificing Partners Capital A/c
(a) i- B, ii-C, iii-A, iv-D
(b) i- C, ii-D, iii-A, iv-B
(c) i- D, ii-C, iii-A, iv-B
(d) i- D, ii-C, iii-B, iv-A
Answer: B

1 MARK QUESTIONS

Question. How can be a new partner admitted?
Answer: A new partner can be admitted with the consent of all the existing partners, unless otherwise agreed upon in the partnership deed.

Question. Give the two main rights acquired by the new partner.
Answer: The two main rights are: (i) Right to share the future profits of the firm, and (ii) Right to share the assets of the firm.

Question. Why is sacrificing ratio calculated?
Answer: Sacrificing ratio is calculated to determine the amount of compensation (premium for goodwill) that the gaining partner should pay to the sacrificing partners.

Question. Unless given otherwise, what will be the ratio of sacrificing of the old partner in the case of admission of a new partner?
Answer: In the absence of any other information, the old profit-sharing ratio is considered the sacrificing ratio.

Question. Under what circumstances premium for goodwill paid by the incoming partner would never be recorded in the books of account?
Answer: When the premium for goodwill is paid by the incoming partner to the old partners privately outside the business.

Question. Pawan and Jayshree are partner. Bindu is admitted for \( 1/4^{th} \) share. What is the ratio in which Pawan and Jyayshree will sacrifice their share in favour of Bindu?
Answer: Since no specific sacrifice is mentioned, Pawan and Jayshree will sacrifice in their old profit-sharing ratio. If their old ratio is not given, they sacrifice equally (1:1).

Question. A, B and C word partners in the firm sharing profit in the ratio of 3:2:1. They admitted D as a new partner for \( 1/8^{th} \) share in the profit which he acquired 1/16th from B and 1/16 th from C. Calculate the new profit sharing ratio of A, B, C and D.
Answer: New Ratio = Old Ratio - Sacrifice
A = \( \frac{3}{6} = \frac{24}{48} \)
B = \( \frac{2}{6} - \frac{1}{16} = \frac{16-3}{48} = \frac{13}{48} \)
C = \( \frac{1}{6} - \frac{1}{16} = \frac{8-3}{48} = \frac{5}{48} \)
D = \( \frac{1}{8} = \frac{6}{48} \)
New Ratio = 24 : 13 : 5 : 6

Question. Amit and Bina partners in in a farm sharing profit and loss in the ratio of 3:1. Chaman was admitted as A new partner for 1/6 share in the profit. Chaman acquired 2/5th share from Amit. How much share did Chaman acquire from Bina?
Answer: Chaman's total share = \( \frac{1}{6} \)
Share acquired from Amit = \( \frac{1}{6} \times \frac{2}{5} = \frac{2}{30} \)
Share acquired from Bina = Total Share - Share from Amit = \( \frac{1}{6} - \frac{2}{30} = \frac{5-2}{30} = \frac{3}{30} = \frac{1}{10} \)

Question. General reserve at the time of admission of a partner is transfer to_________account of of________ partners.
Answer: Capital (or Current), Old

Question. Accumulated profits and losses at the time of admission of a partner are to be-transferred to revaluation account. (True/ false)
Answer: False (They are transferred to Old Partners' Capital Accounts)

3 MARKS QUESTIONS

Question. A and B are partners in a firm sharing profits in the ratio of 3:1. They admitted C as a new partner. The New profit- sharing ratio of A, B and C will be 2:1:1. C brought Rs.2,50,000 for his capital but could not bring his share of goodwill Rs.10,000 in cash. Pass necessary journal entries in the books of the firm for the amount of capital brought in by C and for the treatment of goodwill.
Answer:
1. Bank A/c Dr. 2,50,000 to C’s Capital A/c 2,50,000 (Capital brought in).
2. C’s Current A/c Dr. 10,000 to A’s Capital A/c 10,000 (Goodwill adjustment; Sacrifice: A = 3/4 - 2/4 = 1/4; B = 1/4 - 1/4 = 0. Only A sacrifices).

Question. The capital of A and B are Rs. 50,000 and Rs. 40,000. To Increase the Capital base of the firm to Rs. 1, 50,000, they admit C to join the firm; C is required to Pay a sum of Rs. 70,000, what is the amount of premium of goodwill?
Answer: Total Capital of new firm = Rs. 1,50,000.
Actual combined capital (A+B+C) = 50,000 + 40,000 + 70,000 = 1,60,000.
Hidden Goodwill = Actual Capital - Required Base = 1,60,000 - 1,50,000 = Rs. 10,000. Alternatively, if C's capital should be the balancing figure for the base, his share of goodwill is included in the Rs. 70,000. C's Capital should be 1,50,000 - 90,000 = 60,000. Thus, Premium for Goodwill = 70,000 - 60,000 = Rs. 10,000.

Question. Saloni and Shrishti were partners in a firm sharing profits in the ratio of 7:3. Their capitals were Rs.2,00,000 and Rs. 1,50,000 respectively. They admitted Aditi on 1st April, 2013 as a new partner for \( 1/6^{th} \) share in future profits. Aditi brought Rs.1,00,000 as her capital. Calculate the value of goodwill of the firm and record necessary entries for the above transaction on Aditi’s admission.
Answer: Total Capital based on Aditi = \( 1,00,000 \times 6 = 6,00,000 \).
Actual Total Capital = 2,00,000 + 1,50,000 + 1,00,000 = 4,50,000.
Firm's Goodwill = 6,00,000 - 4,50,000 = Rs. 1,50,000.
Aditi's share of goodwill = \( 1,50,000 \times 1/6 = 25,000 \).
Entry: Aditi's Current A/c Dr. 25,000 to Saloni's Capital A/c 17,500 to Shrishti's Capital A/c 7,500 (in 7:3).

Question. EK and FK were partners in a firm sharing profits in the ratio of 3 : 1. They admitted GK as a new partner on 1.3.2005 for 1/3rd share. It was decided that EK, FK and GK will share future profits equally. GK brought Rs.50,000 in cash and Machinery worth Rs.70,000 for his share of premium for goodwill. Showing your working clearly, give necessary entries.
Answer:
Cash A/c Dr. 50,000
Machinery A/c Dr. 70,000
To GK's Capital A/c 50,000
To Premium for Goodwill A/c 70,000
(Calculation of sacrifice: EK = 3/4 - 1/3 = 5/12; FK = 1/4 - 1/3 = -1/12 (Gain)).
Premium for Goodwill A/c Dr. 70,000
FK's Capital A/c Dr. 17,500 (1/12 of firm's goodwill)
To EK's Capital A/c 87,500

Question. The average profits for last 5 years of a firm are Rs. 20,000 and goodwill has been worked out Rs. 24,000 calculated at 3 years purchase of super profits. Calculate the amount of capital employed assuming the normal rate of interest is 8 %.
Answer: Super Profit = \( 24,000 / 3 = 8,000 \).
Normal Profit = Average Profit - Super Profit = 20,000 - 8,000 = 12,000.
Capital Employed = \( (Normal Profit \times 100) / Normal Rate = (12,000 \times 100) / 8 = Rs. 1,50,000 \).

4 MARKS QUESTIONS

Question. A and B were sharing profits in the ratio of 3 : 2. They decided to admit C into the partnership for 1/6th share of the future profits. Goodwill, valued at 4 times the average super profits of the firm, was Rs.18,000. The firm had Assets worth Rs.15,00,000 and Liabilities Rs.12,00,000. The normal earning capacity of such firms is expected to be 10% p.a. Find the Average Profits/Actual Profits earned by the firm during the last 4 years.
Answer: Super Profit = \( 18,000 / 4 = 4,500 \).
Capital Employed = Assets - Liabilities = 15,00,000 - 12,00,000 = 3,00,000.
Normal Profit = 10% of 3,00,000 = 30,000.
Average Profit = Normal Profit + Super Profit = 30,000 + 4,500 = Rs. 34,500.

Question. X and Y are partners in a firm sharing profits in the ratio of 4:3. On 1st January they admitted Z as a new partner. On the date of Z’s admission the balance sheet of X and Y showed a General Reserve of Rs.1,40,000 and a debit balance of Rs.14,000 in Profit and Loss Account. Give journal entries for the treatment of these items on Z’s admission.
Answer:
1. General Reserve A/c Dr. 1,40,000 to X's Capital A/c 80,000 to Y's Capital A/c 60,000 (in 4:3).
2. X's Capital A/c Dr. 8,000; Y's Capital A/c Dr. 6,000 to P&L A/c 14,000 (in 4:3).

Question. Give Journal entries for the following on the admission of Vinod, as a partner in the Journal of Amit and Bobby: (a) Unrecorded Investments worth Rs.20,000 (b) Unrecorded Liabilities towards suppliers for Rs.6,000
Answer:
(a) Investment A/c Dr. 20,000 to Revaluation A/c 20,000.
(b) Revaluation A/c Dr. 6,000 to Creditors A/c 6,000.

6 MARKS QUESTIONS

Question. X and Y are partners in a firm sharing profits in the ratio of 3:2. They admitted Z as a new partner for 1/5th share in future profits. At the time of admission of Z, Investment appeared at Rs. 1,00,000 in the Balance Sheet. 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 Rs. 62,500. One month after Z’s admission, X and Y decided to allow a salary of Rs. 50,000 per annum to Z for the extra efforts and time devoted by him to the business. a. Pass necessary journal entries. b. Calculate new profit sharing ratio.
Answer:
(a) 1. X's Capital A/c Dr. 30,000; Y's Capital A/c Dr. 20,000 to Investment A/c 50,000 (Half taken over).
2. Investment A/c Dr. 12,500 to Revaluation A/c 12,500 (Remaining half revalued).
3. P&L Appropriation A/c Dr. 50,000 to Z's Capital A/c 50,000 (Salary).
(b) Let total profit = 1. Remaining share = 1 - 1/5 = 4/5.
New X = \( 4/5 \times 3/5 = 12/25 \). New Y = \( 4/5 \times 2/5 = 8/25 \). New Z = \( 1/5 = 5/25 \). Ratio = 12:8:5.

8 MARKS QUESTIONS

Question. Rajat and Ravi are partners in a firm Sharing profit and losses in the ratio of 7:3 their balance sheet as at 31st march ,2007 is as follows: (Table provided). On 1st April ,2007 they admit Rohan on the following tem:- (i) Goodwill is valued at Rs 40,000 and Rohan is to be bring in the necessary amount in cash as premium for goodwill and Rs 60,000 as capital for ¼ share in profits. (ii) Stock is to be reduced by 40% and furniture is to be reduced to 60%. Capital of partners shall be proportionate to their profit sharing ratio taking Rohan’s capital as base. Adjustments of capital to be made by cash.
Answer: Revaluation Loss: Stock reduction (20,000) + Furniture reduction (12,000) = 32,000. Rohan's share of goodwill = 10,000. Total Capital based on Rohan = \( 60,000 \times 4 = 2,40,000 \). New Ratio = 21:9:10 (assuming old ratio sacrifice). Adjusted capital of Rajat = 1,26,000; Ravi = 54,000; Rohan = 60,000.

Question. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. On 31st March, 2009, their Balance Sheet was as under: (Table provided). On the above date C is admitted as a partner. A surrendered 1/6th of his share and B 1/3rd of his share in favour of C. Goodwill is valued at Rs.120000. C brings in only ½ of his share of goodwill in cash and Rs.100000 as his capital. Following adjustment are agreed upon: (i) Stock is to be reduced to Rs.56000 and furniture by Rs.5000 (ii) There is an unrecorded asset worth Rs.20000. (iii) One month’s rent of Rs.15000 is outstanding. (iv) A creditor for goods purchased for Rs.10000 had been omitted to be recorded although the goods had been correctly included in stock. (v) Insurance premium amounting to Rs.8000 was debited to P&L A/c, of which Rs.2000 is related to the period after 31st March, 2009. You are required to prepare revaluation account, partners’ capital account and the balance sheet of the new firm. Also calculate the new profit sharing ratio.
Answer: Sacrifice A = \( 3/5 \times 1/6 = 3/30 \); Sacrifice B = \( 2/5 \times 1/3 = 2/15 = 4/30 \). New Ratio = 15:8:7. Total Sacrifice = 7/30. C's share = 7/30. Goodwill share = \( 1,20,000 \times 7/30 = 28,000 \). Revaluation items: Loss on stock (4,000), furniture (5,000), rent o/s (15,000), creditors (10,000). Gain on unrecorded asset (20,000), prepaid insurance (2,000). Net Revaluation Loss = 12,000.

RETIREMENT AND DEATH OF A PARTNER

Question. Gaining Ratio means the ratio by which the share in profit stands increased. It is computed by deducting old ratio from the ------------------------
Answer: New Ratio

Question. Give the Journal entry to distribute the ‘Workmen Compensation Reserve’ of Rs.60,000 at the time of retirement of Vinod, when there is no claim against it. There are three partners.
Answer: Workmen Compensation Reserve A/c Dr. 60,000 to All Partners' Capital A/cs 60,000 (in old profit-sharing ratio).

Question. Define the term sacrificing partner and gaining partner.
Answer: A sacrificing partner is one whose profit share decreases due to reconstitution. A gaining partner is one whose profit share increases due to reconstitution.

Question. Calculation of sharing of profit upto date of death will be calculated on the basis of-
(a) Yearly basis
(b) Time basis
(c) Turnover basis
(d) Both Time basis and Turnover basis
Answer: (d)

Question. Insurance premium amounting to Rs.8000 was debited to P&L A/c, of which Rs.2000 is related to the period after 31st March, 2009. You are required to prepare revaluation account, partners’ capital account and the balance sheet of the new firm. Also calculate the new profit sharing ratio.
Answer: This is a sub-part of the previous 8-mark question. The \( Rs. 2,000 \) is treated as Prepaid Insurance (Asset) in the Revaluation Account.

Question. A, B and C are partners in a firm sharing profits and losses in the ratio of 3:2:1. Their Balance Sheet as at 31st March, 2013 is as follows: (Table provided). On Ist April,2013, D is admitted into the firm with 1/4th share in the profits, which he gets 1/8 from A and 1/8the from B. Other terms of agreement are as under: a. D will introduce Rs.60000 as his capital and pay Rs.18000 as his share of goodwill. b. 20% of the reserve is to remain as a provision against bad and doubtful debts. c. A liability to the extent of Rs.1000 to be created in respect of a claim for damages against the firm. d. An item of Rs.4000 included in sundry creditors is not likely to be claimed. e. Stock is to be reduced by 30% and patents to be written off in full. f. A is to pay off the Bank Overdraft. After making the above adjustments the capital accounts of the old partners be adjusted on the basis of D’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 Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.
Answer: New Ratio: A = \( 3/6 - 1/8 = 9/24 \); B = \( 2/6 - 1/8 = 5/24 \); C = \( 1/6 = 4/24 \); D = \( 1/4 = 6/24 \). Ratio = 9:5:4:6. Total Capital = \( 60,000 \times 4 = 2,40,000 \). Capital shares: A = 90,000; B = 50,000; C = 40,000; D = 60,000. Revaluation Gain/Loss to be calculated based on Stock (-18,000), Patents (-6,000), Creditors (+4,000), Liability for damages (-1,000). Provision for BDD from reserve is not a revaluation item but an appropriation of reserve.

Question. A. A and B are partnersshare profit in the ratio Of 3:2 with capital of Rs. 80000 and Rs. 50,000 respectively. They admit C as partner with 1/5th share in the profits of the firm. C brings Rs. 60,,000 as his share of capital. Give journal entry to record goodwill on C’s admission. B. Q.10 A and B were partners sharing profits in the ratio of 3:2. A surrenders 1/6th of his share and B surrenders 1/4th of his share in favour of C, a new partner. What is the new ratio and the sacrificing ratio
Answer: (A) Hidden Goodwill: Total Capital (\( 60,000 \times 5 \)) = 3,00,000. Actual Capital (80k+50k+60k) = 1,90,000. Firm's Goodwill = 1,10,000. C's share = 22,000. Entry: C's Current A/c Dr. 22,000 to A & B Capital A/cs. (B) Sacrifice A = \( 3/5 \times 1/6 = 1/10 \); Sacrifice B = \( 2/5 \times 1/4 = 1/10 \). Sacrificing Ratio = 1:1. New Ratio = 5:3:2.

Please click on below link to download CBSE Class 12 Accountancy Admission of A Partner Worksheet Set C