12th Class – Accountancy – Chapter 4 – Worksheet 1

Chapter 4: Admission of a Partner
Important Questions

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

Preparation of Capital Account and Balance Sheet

2. X, Y and Z are equal partners with capital of Rs.1,500; Rs.1,750 and Rs.2,000 respectively. They agree to admit W into equal partnership upon payment in cash Rs.1,500 for 1/4th share of the goodwill and Rs.1,800 as his capital, both sums to remain in the business. The liabilities of the old firm amounted to Rs.3,000 and the assets, apart from cash, consist of Motors Rs.1,200, Furniture Rs.400, Stock Rs.2,650 and Debtors Rs.3,780. The Motors and Furniture were revalued at Rs.950 and Rs.380 respectively.
Pass Journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.

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

BALANCE SHEET as at 31st March, 2019

Liabilities Rs. Assets Rs.
Reserve 10,000 Cash 2,00,000
J’s Capital 1,50,000 Other Assets &nbsp 1,50,000
K’s Capital 1,00,000 2,50,000
Total &nbsp 3,50,000 &nbspTotal 3,50,000

M joins the firm from 1st April,2019 for half share in the future profits. He is to pay Rs.1,00,000 for goodwill and Rs.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 in the profit-sharing ratio of the partners.
(b) 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.

4. On 31st March 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3:1 was as follow:

Liabilities Rs. Assets Rs.
Creditors 2,20,000 Cash at Bank 1,40,000
Employee’s Provident Fund &nbsp&nbsp1,00,000 Debtors &nbsp 1,50,000
Investment Fluctuation Fund 1,00,000 less: Provision
&nbsp for Bad Debts 50,000 &nbsp6,00,000
General Reserve &nbsp 1,20,000 Stock 3,00,000
Capitals: Investments &nbsp 5,00,000
(Market Value Rs. 4,40,000)
Abhir 6,00,000
Divya 4,00,000 &nbsp 10,00,000
Total 15,50,000 &nbspTotal 15,50,000

They decided to admit Vibhor on 1st April,2017 for 1/5Th share.
(a) Vibhor shall bring Rs.80,000 as his share of goodwill premium.
(b) Stock was overvalued by Rs.20,000.
(c) A debtor whose due of Rs.5,000 were written off as bad debts, paid Rs.4,000 in full settlement.
(d) Two months’ salary @ Rs.6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of 1/5th of the total capital of the new firm.

Prepare Revaluation Account, Partners’ Capital Account and the Balance Sheet of the reconstituted firm.

5. 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, 2019 on which date the Balance Sheet of the firm was:

Liabilities Rs. Assets Rs.
Capital A/c: Building 50,000
A &nbsp&nbsp60,000 Plant and Machinery &nbsp&nbsp 30,000
B &nbsp&nbsp 40,000 1,00,000 Stock 20,000
Creditors 20,000 &nbsp Debators &nbsp6,00,000
General Reserve &nbsp 1,20,000 Stock 3,00,000
Capitals: Investments &nbsp 5,00,000
(Market Value Rs. 4,40,000)
Abhir 6,00,000
Divya 4,00,000 &nbsp 10,00,000
Total 15,50,000 &nbspTotal 15,50,000

They decided to admit Vibhor on 1st April,2017 for 1/5Th share.
(a) Vibhor shall bring Rs.80,000 as his share of goodwill premium.
(b) Stock was overvalued by Rs.20,000.
(c) A debtor whose due of Rs.5,000 were written off as bad debts, paid Rs.4,000 in full settlement.
(d) Two months’ salary @ Rs.6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of 1/5th of the total capital of the new firm.

Prepare Revaluation Account, Partners’ Capital Account and the Balance Sheet of the reconstituted firm.

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