CBSE

Test Paper 02
Ch-4 Admission of a Partner

1. WHEN the value of goodwill is not given at the time of admission of a new partner, it
IS inferred from the capital OF THE NEW FIRM and profit-sharing ratio. This concept
is called
a. Purchased Goodwill
b. Premium for Goodwill
c. Average Goodwill
d. Hidden Goodwill
2. Sacrifice ratio is used only for
a. Distribution of Premium for goodwill
b. Revaluation profit
c. Distribution of Reserve
d. Revaluation of loss
3. At the time of increase in the value of assets which account should be debited while
preparing Revaluation Account?
a. Realisation A/c
b. Revaluation A/c
c. Asset A/c
d. Partners’ Capital A/c
4. Neeta and Sumita are partners sharing profits and losses in the sates 2:1. They admit
Geeta as a partner for 1/4th Share. Geeta pays ₹50, 000 as cash for capital but does not
bring any amount for goodwill. The goodwill of the new firm is valued at ₹36,000.
Give journal entry.
a.
Cash/Bank A/c Dr. 20000
To Geeta's Capital A/c 50000
b.
Cash A/c Dr. 50000
To Geeta's Capital A/c 50000
Geetha's capital A/c Dr 9000
TO Neetha's capital 6000

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 TO Sumitha's capital 3000
c.
Cash/Bank A/c Dr. 5000
To Geeta's Capital A/c 5000
d.
Cash/Bank A/c Dr. 30000
To Geeta's Capital A/c 50000
5. Anand and Nitin are partners sharing profits in the ratio of 3:2. They admitted
Jayshree as a new partner for 3/10 share which she acquired 2/10 from Anand and
1/10 from Nitin. Calculate the new profit sharing ratio of Anand, Nitin and Jay
a. 1:2:2
b. 3:2:2
c. 4:3:3
d. 2:1:1

6. Which account shows the net results of revaluation of assets and reassessment of
liabilities?

7. Amit and Beena were partners in a firm sharing profits and losses in the ratio of 3: 1
Chaman was admitted as a new partner for th share in the period. Chaman
acquired th of his share from Amit. How much share did Chaman acquire from
Beena?

8. State the need for treatment of goodwill on admission of a partner.

9. When the new partner brings cash for goodwill, the amount is credited to which
account?

10. Explain the treatment of goodwill in the books of a firm on the admission of a new
Partner when goodwill already appears in the Balance sheet at its full value and the
new partner brings his share of goodwill in cash.

11. A and B are partners sharing profits and losses in the ratio of 3 : 2. They admit C into
the firm for l/4th share in profits which he takes 1/6th from A and 1/12th from B. C
bring Rs 18,000 as goodwill out of his share of Rs 30,000. No goodwill account appears
in the books of the firm. Pass the necessary journal entries to record this

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 arrangement.

12. Mohan Lal and Sohan Lal were partners in a firm sharing profits and losses in 3:2
ratio. They admitted Ram Lal for 1/4 share on 1.1.2013. It was agreed that goodwill of
the firm will be valued at 3 years purchase of the average profits of last 4 years which
were Rs. 50,000 for 2013, Rs. 60,000 for 2014, Rs. 90,000 for 2015 and Rs. 70,000 for
2016. Ram Lal did not bring his share of goodwill premium in cash. Record the
necessary journal entries in the books of the firm on Ram Lal’s admission when:

a. Goodwill already appears in the books at Rs. 2,02,500.

13. Hemant and Nishant were partners in a firm sharing profits in the ratio of 3: 2. Their
capitals were ₹1,60,000 and ₹1,00,000 respectively. They admitted Somesh on 1st
April, 2019 as a new partner for th share in the future profits. Somesh brought
₹1,20,000 as his capital. Calculate the value of goodwill of the firm and record
necessary journal entries for the above transactions on Somesh’s admission.

14. Abha and Bimal are partners in a firm sharing profits and losses in the ratio of 3: 2.
On 31st March, 2015 they admitted Chintu into partnership for 1/5th share in the
profits of the firm. On that date their balance sheet stood as under

Balance Sheet
as at 31st March, 2015

Liabilities Amt (Rs) Assets Amt (Rs)

General Reserve 20,000 Plant and Machinery 1,30,000

Sundry Creditors Furniture 25,000

Capital A/c Investments 1,00,000

Abha 1,20,000 Sundry Debtors 50,000

Bimal 1,00,000 2,20,000 Bank 35,000

3,40,000 3,40,000

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 Chintu was admitted on the following terms

i. (He will bring Rs 80,000 as capital and Rs 30,000 for his share of goodwill
premium.
ii. Partners will share future profits in the ratio of 5 :3: 2.
iii. Profit on revaluation of assets and reassessment of liabilities was Rs 7,000.
iv. After making adjustments, the capital accounts of the partners will be in
proportion to Chintu’s capital. Balance to be paid off or brought in by the old
partners by cheque as the case may be.
Prepare the capital accounts of the partners and bank account.

15. L, M and N were partners in a firm sharing profits in the ratio of 3: 2: 1. Their balance
sheet as at 31st March, 2015 was as follows

Balance Sheet
as at 31st March, 2015

Amount Amount
Liabilities Assets
(Rs) (Rs)

Creditors 1,68,000 Bank 34,000

General Reserve 42,000 Debtors 46,000

Capital A/cs Stock 2,20,000

L 1,20,000 Investments 60,000

M 80,000 Furniture 20,000

N 40,000 2,40,000 Machinery 70,000

4,50,000 4,50,000

======= =======

On the above date, O was admitted as a new partner and it was decided that:

i. The new profit sharing ratio between L, M, N and O will be 2: 2 : 1: 1.

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iii. The market value of investments was at Rs.36,000.
iv. Machinery will be reduced to Rs 58,000.
v. A creditor of Rs 6,000 was not likely to claim the amount and hence is to be
written-off.
vi. O will bring proportionate capital so as to give him 1/6th share in the profits of the
firm. Prepare revaluation account, partners’ capital accounts and the balance
sheet of the new firm.

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