CBSE Class 12 Accountancy Admission Of Partner Worksheet Set C

Question: According to Section 31(1) of the Indian Partnership Act, 1932, “A person can be admitted as a new partner only with the ………… unless otherwise agreed upon.”
a) consent of one partner
b) consent of all the existing partners
c) consent of the firm
d) Both (a) and (b)
Answer: b

Question: A newly admitted partner acquires the right to……….
a) share in the assets of the firm
b) share in the future profits
c) None of these
d) Both (a) and (b)
Answer: d

Question: Assertion (A) Profit or loss on revaluation account is not transferred to incoming partners’ capital account.
Reason (R) Profit or loss on revaluation at the time of admission of a partner belongs to pre-admission period hence belong to old partners.
a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
c) Assertion (A) is true, but Reason (R) is false
d) Assertion (A) is false, but Reason (R) is true
Answer: a

Question: Contingency reserve appearing in the balance sheet at the time of admission of partner is ……… to old partners’ capital accounts in old ratio.
a) debited
b) credited
c) Either (a) or (b)
d) None of these
Answer: b

Question: When share of new or incoming partner is given without giving the details of sacrifice made by old or existing partners, then
(i) it is assumed that old partners make sacrifice in their old profit sharing ratio.
(ii) there is no change in profit sharing ratio of the old partners.
a) Only (i) is correct
b) Only (ii) is correct
c) Both (i) and (ii) are correct
d) Both (i) and (ii) are incorrect
Answer: c

Question: ‘X’ and ‘Y’ are partners sharing profits in the ratio of 3 : 1. They admit ‘Z’ as a partner who pays ₹ 4,000 as goodwill, the new profit sharing ratio being 2 : 1 : 1 among ‘X’, ‘Y’ and ‘Z’. The amount of goodwill will be credited to
a) ₹ 2,000 each
b) Only ‘Y’
c) ‘X’ and ‘Y’ as ₹ 3,000 and ₹ 1,000
d) Only ‘X’
Answer: d

Question: A firm has an unrecorded investment of ₹ 5,000. Entry in the firm’s journal on admission of partners will be
a) Unrecorded Investment A/c Dr 5,000
  To Revaluation A/c 5,000
b) Partners’ Capital A/c Dr 5,000
  To Unrecorded Investment A/c 5,000
c) Revaluation A/c Dr 5,000
  To Unrecorded Investment A/c 5,000
d) None of the above
Answer: a

Question: ‘A’, ‘B’ and ‘C’ share profits and losses in the ratio of 3:2:1. ‘D’ is admitted with 1/6 share which he gets entirely from ‘A’. New ratio will be
a) 2:2:1:1
b) 3:1:1:1
c) 2:2:2:1
d) None of these
Answer: a

Question: When 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 partner’s share from 1.
a) (i), (iii), (ii)
b) (iii), (i), (ii)
c) (ii), (iii), (i)
d) (iii), (ii), (i)
Answer: b

Question: Workmen Compensation Reserve (WCR) appears in the balance sheet of Rashmi and Suman, who share profits in the ratio of 2:3, at ₹ 80,000. Deepa is admitted and the new profit sharing ratio is 1:1:1. If the claim on account of WCR is estimated at ₹ 1,00,000, then
a) the difference of ₹ 20,000 will be debited to revaluation account
b) the difference of ₹ 20,000 will be debited to Rashmi’s capital account
c) the difference of ₹ 20,000 will be debited to Suman’s capital account
d) None of the above
Answer: a

Question: The new partner, at the time of admission, may acquire his share from old partners in
a) old profit sharing ratio
b) some agreed ratio
c) particular fraction from some of the partners
d) All of the above
Answer: d

Question: Which of the following statement(s) is/are correct?
(i) In case admission of partner, sacrificing ratio is used to distribute goodwill.
(ii) Inferred goodwill is the excess of desired total capital of the firm over the actual combined capital of all partners.
(iii) At the time of admission of a new partner, the new partner compensates the old partners by premium for goodwill.
(iv) Taxation fund should never be distributed among the old partners at the time of admission of partners.
a) (i) and (ii)
b) (ii) and (iii)
c) (i), (iii) and (iv)
d) All of these
Answer: d

Question: Asha and Nisha are partners sharing profits in the ratio of 2 : 1. Asha’s son Ashish was admitted for 1/4 share of which 1/8 was gifted by Asha to her son. The remaining was contributed by Nisha. Goodwill of the firm is valued at ₹ 40,000. How much of the goodwill be credited to the old partners’ capital account?
a) ₹ 2,500 each
b) ₹ 5,000 each
c) ₹ 20,000 each
d) None of these
Answer: c

CASE STUDY BASED QUESTIONS 

Amit and Mahesh were partners in a fast food corner sharing profits and losses in the ratio 3:2 .They sold fast food items across the continent and home delivery too.Their initial fixed capital contribution was Rs 1,20,000 and Rs 80,000 respectively.
At the end of first year their profit was Rs 1,20,000 before allowing the remuneration of Rs 3,000 per quarter to Amit and Rs 2,000 per half year to Mahesh. Such a promising performance for the first year was encouraging, therefore, they decided to expand the area of operations.
For this purpose they needed a delivery Van, a few bikes and an additional person to support. Six months into the accounting year, they decided to admit Sundaram as a new partner and offered him 20% as a share of profits along with monthly remuneration of rupees Rs. 2,500. Sundaram was asked to introduce Rs. 1,30,000 for capital and Rs.70,000 for premium for Goodwill. Additionally, Sundaram was required to provide Rs. 1,00,000 as loan for two year Sundaram readily accepted the offer and the terms of the offer were duly executed and he was admitted as a partner.

Question: Upon the admission of Sundaram the sacrifice for providing his share of profits would be done:
a) by Amit only
b) by Mahesh only
c) by Amit and Mahesh equally
d) by Amit and Mahesh in the ratio of 3:2
Answer: d

Question: Remuneration will be transferred to _________ of Amit and Mahesh at the end of the accounting period
a) capital account
b) loan account
c) current account
d) none of the above
Answer: c

Question: While talking up the accounting procedure for the reconstitution the accountant of the firm Mr Suraj Marwaha faced a difficulty. Solve it by answering the following.For the amount of loan that Sundaram has agreed to provide he is entitled in the interest thereon at the rate of
a) 6% p.a
b) 7% p.a
c) 8% p.a
d) 9% p.a
Answer: a

Question: Sundaram will be entitled to a remuneration of _______ at the end of the year
a) Rs. 15,000
b) Rs. 20,000
c) Rs. 40,000
d) Rs. 30,000
Answer: a

Rahul and Modi are two partners into a firm sharing profits equally . On 1st January , 2020, they decided to admit Vikas as a new partner into the firm for 1/5th share. Vikas brings Rs 10,00,000 for his share to capital and premium of goodwill in cash . Half goodwill is withdrew by the old partneRs. Goodwill of the firm is valued on the basis of one year purchase of profits or losses of preceding last 3 yeaRs. Profits of last four years are Rs 6,00,000 in 2016; Rs 7,00,000 in 2017; Rs 8,00,000 in 2018 and Rs 15,00,000 in 2019.

Question: What was the value of goodwill of the firm ?
a) Rs 7,00,000
b) Rs 8,00,000
c) Rs 9,00,000
d) Rs 10,00,000
Answer: d

Question: What was the amount of capital brought in by Vikas ?
a) Rs 2,00,000
b) Rs 8,00,000
c) Rs 10,00,000
d) Can’t be determined
Answer: b

Question: What was the goodwill share given to Modi ?
a) Rs 1,00,000
b) Rs 2,00,000
c) Rs 4,00,000
d) Can’t be determined
Answer: a

Question: Which account is debited when the goodwill is withdrawn by partners ?
a) goodwill a/c
b) premium for goodwill a/c
c) partner’s capital a/c
d) cash/bank a/c
Answer: c

R and S are partners in a firm sharing profits in the ratio of 3:2 they admit T as new partner the new profit sharing ratio of R, S and T will be 5:5:3 T contributed the following assets towards his capital and for his share of Goodwill.Stock Rs. 1,67,000 debtors Rs.1,40,000 (Less Provision for doubtful debts of 5%) and land Rs. 1,00,000 Plant & Machinery Rs.1,80,000. On the date of admission of T, the Goodwill of the firm was valued at Rs.13,00,000.

Question: What could be the purpose of admitting T in the firm?
a) Acquiring additional managerial skills
b) Procuring additional capital
c) Enhancing efficiency of operations
d) None of the above
Answer: b

Question: What is the sacrificing ratio of R and S ?
a) 2:3
b) 3:2
c) 1:1
d) None of the above
Answer: d

Question: What was the amount of capital brought in by T ?
a) Rs. 5,80,000
b) Rs. 3,00,000
c) Rs. 2,85,000
d) Rs. 2,80,000
Answer: d

Question: What share of goodwill did R get ?
a) Rs. 6,50,000
b) Rs. 1,50,000
c) Rs. 2,80,000
d) None of these
Answer: c

DIRECTION Sainath enterprises is a partnership business with Amar, Akbar and Anthony as partners engaged in the production and sales of home appliances. Their capital contributions were Rs 50,00,000, Rs 50,00,000 and Rs 80,00,000 respectively with the profit sharing ratio of 5:5:8.
As they are now looking forward to expanding their business it was decided that they would bring in sufficient cash to double the respective capitals. This was duly followed by Amar and Akbar but due to unavoidable reasons Anthony could not do so and ultimately it was agreed that to bridge the shortfall in the required capital a new partner should be admitted who would bring in the amount that Anthony could not bring and that partner would get share of profits equal to half of Anthony’s shares which would be sacrificed by Anthony only.
Consequent to this agreement, Mahesh was admitted and he bought in the required capital and Rs 30,00,000 as premium for goodwill.
Based on the above information you are required to answer the following questions:

Question: What is the amount of capital brought in by the new partner, Mahesh ?
a) Rs 50,00,000
b) Rs 80,00,000
c) Rs 40,00,000
d) Rs 30,00,000
Answer: c

Question: What will be the new profit sharing ratio of Amar, Akbar, Anthony and Mahesh?
a) 1:1:1:1
b) 5:5:8:8
c) 5:5:4:4
d) None of the above
Answer: c

Question: What is the value of goodwill of the firm ?
a) Rs 1,35,00,000
b) Rs 30,00,000
c) Rs 1,50,00,000
d) Rs 1,00,00,000
Answer: a

Question: What will be the correct journal entry for the distribution of premium for goodwill brought in by Mahesh ?
a) Mahesh capital a/c Dr 30,00,000
b) Premium for goodwill a/c Dr 30,00,000
To Anthony’s capital a/c 30,00,000
(Being ………………..)
c) Premium for goodwill a/c Dr 30,00,000
d) Premium for goodwill a/c Dr 30,00,000
To Amar’s capital a/c 10,00,000
To Akbar’s capital a/c 10,00,000
To Mahesh’s capital a/c 10,00,000
(Being ……………………)
Answer: b