Objective Type Questions

1. State whether the following statements are True or False:

(i) At the time of admission of a partner, Accumulated Profits/Losses are transferred to Revaluation Account
(ii) Unrecorded Assets or Liabilities are transferred to Partners' Capital Accounts.
(iii) Undistributed profits, General Reserve, ,etc., are transferred to Partner~' Current Accounts, if Capital
Accounts are fixed.
(iv) Ram and Shyam are partners in a firm sharing profits and losses in the ratio of 7 : 5. They admit Mohan for
1/5th share in a firm. T~e new profit:sharing ,ratio will be 2 : 2 : 1.
(v) Old profit-sharing ratio plus new p~ofit-sti~rang ratio is sacrificin-g ratio.
(vi) At the tfme of admission, ifthe profit-sharing ratio amo!1g the old -partners does not change then
sacrificing ratio will be their old.,.profit-sharing ratio.
. (vi'i) Raj is admitted in a firm -for _1/4th share in the~-profits _for which he brings 30,000 as goodwill. It
will be taken by the· old partners in gaining r~tio.
(viii) At the time of admission, :General Reserve 'is transferred to Capital Accounts of the old partners in
old profit-sharing ratio.
(ix) ,Revaluation Acc~unt is debited to transfer gain on Revaluation to Old Partners' Capital Accounts in
their o~d profit-sharing ratio.
(x) Newly admitted partner does not have the right on the assets of the firm .
(xi) Admission of a partner means reconstitution of a firm as existing agreement comes to an end and
a new agreement comes into effect because of the admission of a partner.
(xii) Partner's Capital Account is credited with his share of gain on Revaluation Account.
 Chapter 5 • Admission of a Partner 5.19
···i partner's Capital Account is debited with h' h
()(Ill Is s are of I R . .
. 1 crease in the value of asset • d' oss on evaluation Account.
()(1V) n is ere ited to Revaluation A t
f f d ·· . ccoun .
()(V) At t he 1me o a mIssIon of a partner R •
Plant and Machinery.
1
' eva uation Account is credited on increase in the value of

()(vi) At the time of admission of a partner R . . .

Provision for Doubtful Debts. ' evaluation Account is debited to record the increase in

()(vii) The _ratio in which all partners includin th • . . .

. . g e incoming partner share future profits and losses Is known
as oId profit-s h anng ratio.

( viii) The ratio in which old partners a t L · •

x 'fi . gree O ,orego tneir shares in profits in favour of a new partner Is
known as 5acn cmg Ratio.
nd
(xix) A a are sharing profits and losses in the ratio of 3 : 2. They admitted C as a new partner and
gave him 113rd share in the profit f th fi · · ·
· · , so e _rm. The new profit-sharing ratio will be 6 : 4 : 5.
th
(xx) At e time of admission of a partner, unrecorded assets or liabilities ·are transferred to Profit and
Loss Account. .

[Ans~: (i) False; (ii.) False; {iii.) True; {iv) False; (v) False; (vi) Jrue; (vii) False. (viii) True;
· (ix) True; (x) False; (xi) True; (xii) True; (xii i) True;· (xiv) True. (xv) True;
(xvi) True; (xvii) ·_False; (xviii) True; (xix) True; (xx) False.]
2. Fill-in-the blanks with appropr~ate words:
(i) Gaining partner or partners ~he sacrificing partner or partners for the sacrifice in
shar~ of profit: , -----

(ii) In the absence of an agreement as to who will contribute to new partner's share of profit, it is
assumed that the Old partners will contribute in their -----.,-----'
(iii) When anew partner brings his·share of goodwill in cash, the amount is debited to _ _ _ __
{iv) Profit or Loss on the revaluation of -assets or reassessment of liabilities on admissi~n of a partner is
transferred to Old Partners' Ca_pit~l· 1ccounts in their - - - ' - - - ·
(v) Ram and ·Mohal'.l are sh~ring profits in t~e ratio of 3 : 2. They admit Shyam as a partner for 113rd
· share in the profits. He gets this share 3/Sth from Ram and 2/Sth from Mohan. New profit-sharing
ratio will be ·· ·
(vi) X and Y are partners sharing. profits in the ratio of 3 : 2 with Capitals as f 1,00,000 and f 50,000
respectively. z is admitted for 1/Sth share of the profits. The amount Z brings as capital will be

. l

(vii) Alfa and Beta are partners sharing profits· ih the ratio of 2 : 3. They admit Gama as a ·partner for 1/4th
share. The sacrificing ratio of Alfa a'nd Beta will be _ _ _ __
(viii) On admission, the share sacrificed by a partner is the excess of his _ _ _ _ _ profit share over
_ _ _ _ _ profit share.
(ix) Decrease in the value of assets at the time of admission of a partner isdebited to _ _ _ __
0

(x) Increase in the value of l iabilities at the time of adm_

lssion of a partner is _ _ _ _ _ _ to
. r

Revaluation Account.
(xi) Decrease in the value of liabilities at the time of admission of a partner is _ _ _ _ _ _ to
Revaluation Account.
(xii) A, B and c are partners sharing profits and losses in the ratio of 3 : 2 : 1. 0-is admitted as· partner for
117th share of profit which he gets from A. New profit-sharing ratio will be _ _ _ _ _.
(xiii) xis admitted into the partnership for 1.L4th share. Total Capital of the old firm is f 36,000. If Capitals are
to be proportionate to the profit-sharing ratio, the amount that X has to bring will be _ _ _ _ _.
 5.80 Double Entry Book Keeplng-CBSE XII
Reserve is transferred to Capital Acco
1
(xiv) At the time of admission of a partner, Genera · - Unts of Pa11
in~r _ _ _ _ _. \
· h b nee of the Investments Fluctuatio
I
(xv) At the time of admission of a partner, t e a a n Rese"'-' 1
t is transferred t o - - - - - - of e, ar.
meeting the loss on revaluation of lnvestmen s _ ----- 1e,
in their _ _ _ _ _ . · "'
· • h. f10 0 f 7 · 3 C is admitted for 115th sha .
(xvi) A and 8 are partners sharing profits m t e ra • • • . re in Profit
. . · 14. 6 . 5 sacrificing ratio w,11 be · lf tn
new profit-sharing ratio of the p~rtners 1s • · , ·· ----· e
nd
(xvii) At the time of admission of a partner the balance of Profit a Loss Account is transferred
f '
Capital Accounts of _ _ _ _ _ In t h e i r - - - - - - ra ,o. . e
(xviii) Raj is admitted in a firm for 1/4th share in the profits for which he brings 30,000 as 900
It wm be credited to the old Partners' Capital Accounts in their _ _ _ _ _ _ . . dWill

-----·
(xix) P and Qare two partners in a firm having capitals off 15,000 each. R is admitted for 113rd h
which he has to bring t 20,000 for his share bf Capital. The amount of goodwill will be s arefor

(xx) The amount earlier written off as bad debt now received is _ _ _ _ _ _. in Revaluation A
[Ans.: (i) Compensate;
· (ii) Old profit-sharing ratio; (iii) Cash Acco~nt; (iv) Old Profit-sharin ccRou~t
· · . . 9 at,o·
.· (v) 6: 4: 5; (vi) f 37,500; (vii) 2: 3;
· (viii) Old, New; (ix) Revaluation Account- , (x) 0eb'1ted·'
. 7:. 6; (xiii) t 12,000; (xiv) Old profit-shar,·ng rati.o·'
(xi) Credited; (xii) 15: 14:
(xv) Capital Accounts, Old Partners, Old Profit-Sharing Ratio; (xvi) 7 : 3; (xvii) Old partners: 1
Old profit-sharing; (xviii) Sacrificing ratio;· (xix) f 10,000; (xx) credited.]

3. Mq~ch the following:

Group A . Group 8

(i) Reserve Fund/General Reserve (a) Old Ratio · New Ratio

(ii) Sacrificing Ratio (bY Credit to Revaluation Account
(iii) Increase in the value .of liability · (c) Accumulated Profit
(iv) Increase in the value 'of asset (d) Debit to Revaluation Account
'
[Ans.: (i-c), (ii-a), (iii-d), (iv-b).l :
Multiple Choice Questions (MCQs)
Select the correct alternative:
1. X and
. . Y are sharing profits- and losses in th e ratio
. of 3 • 2 Th d . d · hirn i
2/10th share in the profits. The new profit- h . · _ . · · ey a m,t Z as a partner an g,ve
. . . s anng ratio will be · · · ,
(a) 12. 8. 5. ·
(c) 3 : 2 : 5. . (b) 3 : 2 : 2.
. d h · · (d) 2 : 1 · 2
2. Sh1v an Mo an are shanng
- profits and .losses m
• the rpt'· f · · · d jve
0
him 3/10th share of the profits. This share h . 1° S : 3. They, admit Jea as a partner an g
e w, 1I get 1/Sth f
The new profit-sharing ratio will be · I
, · · rom Shiv and 1/10th from Mohan.

(a) 5: 6: 3.
(c) 17: 11 : 12. (b) 2 : 4: 6.
3. Profit or Loss on revaluation of assets and (d) l 8 : 24 : 38. .1
A
ccounts mtheir
.
.
reassessme t , C p,ta
n of liabilities js transferred to Partners a
(a) Capital Ratio.
(c) _Old Profit-sharing Ratio. (b) Equal Ratio.
(d) Gaining Ratio.
 Chapters . Admission of a Partner S.81

4, Aditya a~d Shiv were partners in a firm with capitals of t 3,00,000 and t 2,00,000, respectively. Naina
was admitted a~ a new_ partner 114th share in the profits of the firm. Naina brought t 1,20,000 for her
share of ~oodw1II premium and 2,40,000 for her capital. The amount of goodwill premium credited to
Aditya will be
(a) t 40,000. (b) t 30,000. ((85£2020)
(cl t 72,000. (d) t 60,000.
S, unrecorded assets or liabilities are transferred to
(a) Partners' Capital Accounts. (b) Revaluation Account.
(c) Profit and Loss Account. (d) Partners' Current Accounts.
6, Xand Yare partners sharing profits in the ratio of 3 : 2, and capitals as·t 100,000 and t 50,000 respectively.
Z is admitted for 1/5th share in profits. The amount z will contribute as capital will be
(a) t 50,000. . t 35,000.
(bl
(c) t 37,500. (d) t 60,000.
7, X and Y are partners sharing profits and losses in the ratio of 3 : ·2. z was admitted for the 1/5th share
.and for this he brings t 150,000, as capital. If capitals are to be proportionate to profit-sharing ratio, the
respective capitals of the partners will be
(b) t 3,60,000 : t 2,40,000: t 1,50,000.
(a) t 3,00,000 : t 3,00,000 : t1 ,50,000.
(d) t 1,so,000: t 2,00,000: t 4,00,000.
(c) t 1,50,000 : t 1,50,000 : t 1,50,000.
8. Goodwill brought by the incoming partner is distributed ~mong the old partners in their '
(a) Old profit-sharing ratio. (bl New profit-sharing ratio.
(d) Gaining ratio.
(c) Sacrificing ratio.
'· 9. When goodwill existing in 'the books is written off at the time of admission of a partner, it is transferred
to Partners' Capital Accounts iri their
(al Old profit-sharing ratio. · (bl New profit-sharing ratio.
(d) Gaining ratio.
(c) Sacrificing ratio'.
10. A and 8 are partners sharing profits in the ·ratio of2: 3, they aqmJt C as a partner for 1/4th share, the
sacrificing ratio of A _and B will be
(b) 1 :-1.
(a) 2: 3.
(d) 2: 1.
(c) 3: 2.
11.. When a new partner is admitted, the balance of 'General Reserve' appe~ring in the Balance Sheet at the
time of admission is credited to
(a) Prqfit and Loss Appropriation Account. (b) Capital Accounts of all the partners:
(c) Capital Accounts of Old Partners. (d) Revaluation Account. (A/ 201 s C) I
12. Anita and Babita were partrers· sharing profits and losses in 'the ratio of 3: 1. Savita was admitted for ·I
1/Sth share in the profits. Savita was unable to bring her share of goodwiil premium in cash. The Journal
entry re~orded for goo~will premium is given below:
L.F. Dr. {t) Cr. {t)
Date Particulars
...Dr. 24,000
Savita's Current Ale 8,000
To Anita's Capital A/c 16,000
To B~bita's Capital Ale
(Adjustment of goodwiU premium on Savita's Admission)
The new profit-sharing ratio of Anita, Babita and Savita; will be
(a) 41 :7:12. (b) 13:12:10.
(CBSE2020)
(c) 3 : 1 : 1. (d) 5 : 3 : 2.
 5.82 Double Entry Book Keeping-CBSE XII
13.
.
Increase in the value of liabilities at the time of ad m,ssr
. •on of a partner is
(a) Debited to Revaluation Account. (b) Credited to Revaluation Account.
(c) Credited to Partner's Capital Account. (d) Debited to Partner's Capital Account.

'
14.
. of· the following situations, old profit-sharing
For whrch • ra r10 of partners is used at the tirn e of adrrr .
of a new partner?
.

(a) When new partner brings only a part of his share of goodwill.
(b) When new partner is not able to bring his share of goodwill.
(c) When, at the time of admission, goodwill already exists in the Balance Sheet.
(d) When new partner brings-his share of goodwill in cash.

15. A and B are partners in a firm having a capital of t 54,000 and { 3 6,000 respectively. They admitted
·for I/3rd share in the profits. c brought proportionate amount of capital. The capital brought io by
would be
i
(a) 90,000. (b) 45,000.

(c) 5,400. (d) 3,~00. (CBSE Sample Paper ~

16. 201
P and.Qare partners in a firm having capitals of~ 15,000 each. R is admitted for 113rd share for Which
he has to bring J 20,000 for his share of capital. The amount of goodwill will be
(a) 8,000. (b) 10,000.
(c) ~9,000.
(d) 11,000.
17. When the new partner brings cash for goodwill, the amount is credited to
(a) Revaluation Account. (b) Cash Account.
(c) Premium for Goodwill Account (d) Realisation Account.
(CBSEDe/hi 20150
18. N~w partner can be admitted into partnership
{a) with the consent of any one partner.
(b) with the consent of majority of partners.
(c) with the consent of all the partners.
(d) with the consent of 213rd of old partners. 1

19. X and Y are partners sharing profits in the ratio of 2 : 1. They admit Z into the partnership for 114th share
in profits for which he brings 20,000 as his share of capital. Hence, the adjusted capitals of X and Y
will be
(a) 40,000 and 20,000 respectively.
(~). 60,000 and t 30,000 respectively.
(b) t 32,000 and ~16,000 respectively.
(d) 20,000 and t 40,000 respectively.
20. At the time of admission, if the profit-shar_ing ratio among the old partners does not change then
sacrificing ratio will be

(a) equal. (b) according to the contributi~n of capital.

(c) their old profit-sharing ratio. {d) according to new partner. . .
[Ans.: 1. o. (a); 11. (c),
(a); 2. (c); 3. (c}; 4. (d); 5. (b); 6. (c); 7. (b); 8. (c); 9. (a}; 1
12
· (a); 13. (a); 14. (c); 15. (b); 16. (b); 17. (c); 18. (c); 19. (a); 20 · (c).J
[Hint 12: New Profit Share = Old Profit Share - Sacrificed Share
3 1 1
Anita's New Profit Share= - -(- x-)=~-_!_=~=~·
4 5 3
· ·4 15 60 60
1
\3
Babita's New Profit Share= - -(- )=_!__.3.. = ~ = 2 .
4 5 3 4 15 60 60
1
Savita's Profit Share =
5
. R . 41 7 1
New Pro fi t-s harrng atro = : : or41:7:12.]
60 60 5
verY Short Answer Type Questions Chapter 5 : Admission of a Partner 5.83
What do you understand by actm· .
1. 1ssIon of a Part
. t d . ner?
2, How is new par ner a mItted to the firm?

3 State any one purpose of admitti

• . ng a new Pariner in a (Al 2009)
4 List any two matters that need act· firm.
• . Justments at the ti . . (Al2012)
5 A new partner acquires two m . . me of admission of a partner.
. . a1n rights in th .
· these rights. e partnership firm which he joins. State one of
6 State the other right which a newl d . (CBSE 2079)
• Y a mItted part .
the firm. ner acquires besides the right to share the profit of
1. State the two main rights that a newl ad . . (Al 2009 C)
· y mitted partner acquires in the firm. (Delhi 2011)
Or
State the rights acquired by a newly adm·tt d
1 e partner.
(Al2014)
Or
State any one right acquired by a newly ad ·tt d
m1 e partner? (CBSE 2020 C)
s. State the n~ed for treatment of goodwill on ad · · f
m1ss1on o a partner. (Delhi 2010)
9, State the reason of contributing for goodwill by a new part t th t· f h' d · ·
· ner a e Ime o Is a mIssIon. (Foreign 2072)
Or
Why should a new partner contribute towards goodwill on his admission? (Delhi 2011 C)

10. If the new partner brings in his share of goodwill in cash and if goodwill also appears in books, how is
existing amount of goodwill dealt with? (NCERT Modified)
11. What is meant by "Sacrificing Ratio"?
(Al 2011, Al 2011 C, 2014 C)
12. At the time of admission of a partner, who decides what will be the share of profit of the new partner
out of the firm's profit? (Delhi 2013 C)

13. Unless given otherwise, what will be the ratio of sacrifice of the old partners in the case of admission of
a new partner? (Al 2012 C)

14. State the ratio in which the old· partners share reserves, accumulated profits and losses.
•15. Give two circumstances in which the sacrificing ratio is applied.
· [Hints: (i) At the time of admis~ion of a new partner for distributing goodwill brought in by him.
(ii) For adjusting goodwill in the case of change in the profit-sharing ratio of the existing partners.]
16. Define New Profit-Sharing Ratio in the case of admission of a partner.
17. Why do we _distribute reserves, accumulated profits and losses among the old partners?
. . h eed adjustments in the books of account of a firm at the time of admfssion of
18. List any two items t at n (Al q
2014
a partner.
19. What is meant by Revaluation Account?
t nd liabilities of a firm in case of admissi.on of a partner?
20. Why is it necessary to revalue asse s a · (CBSE Sample Paper 2018)

• fits and losses in the ratio of 3 : 2. On 1st April, 2019, they

21 · a firm sharing pro . .
• A and 8 are partners m . . d .d d to be equal Pass the necessary Journal entry to d1stnbute
T h • new ratio Is ecI e · .
decided to admit C. eir · at the time of C's admission, when Investment appears in
000
60
Investment Fluctuation Reserve oft • • t . (CBSE Sample Paper 2019)
90 000
the books at t 2 10 000 and its market va 1ue is 1, ,
. , , . Reserve Ne by t 60,000; .
[Hint: Dr. Investment Fluctuation . N by t 24 ooo and B's Capital Ne by 16,000.]
Cr. Investment N c by
t 20,000; A's Capita 1 c '
5.84 Double Entry Book Keeping-CBSE XII
. d
d'ted
I to record an unrecorded a
22. State whether Revaluation Account is deb1te or ere sset,
· . eel d'teel to record the increase in Provision fi
23. State whether Revaluation Account is debit or ere I or DoubtftJ,
• · eel dited to record the gain of R Di
24. State whether the Partner's Capital Account Is debit or ere evaluation A
• f R I tion Account on the admission of Ceo
25. State any two reasons for the preparation o eva ua a new P
(Al 2008, CBSE Sam , artn,
p,epa""
· I t' f
26. State the ratio in which the partners share the gain or loss on reva ua ion
.
° assets and liab·i·1%.
l'<r il

. . . . . .
27 • Under what circumstances will the premium for goodwill paid by th e incoming partner not be re
. cord1
in the books of account? (De/hi2014
28. State with reason whether at the time of admission
·
of a partner, partnership is dissolved or Part
nersh
firm is dissolved. I.Af 20,/
. I
29. Amit and Beena were partners in a firm sharing profits and losses in the ratio of 3 : 1. Chaman
admitted as a new partner for 1/6th share in the profits. Chaman acquired 2/Sth of his share from A
:~
How much share did Chaman acquire from Beena?
[Hint: Share acquired from Beena = 3/30.]
30. A and 8 are in partnership sharing profits and losses in_the ratio of 3 : 2. They admit C into partnership
with 1/Sth share which he acquires equally from A and B. Accountant has calculated new profit-shanng
ratio as 5 : 3 : 2. Is accountant correct? · (CBSE Sample Paper 201~

[Hint: Yes, accountant is correct.]

31. A, B and Care partners having capitals oft 3,00,000, t 2,00,000 and t 1,00;000. They admit Das apartner
for 1/5th share on 1st April, 2021. On this day, the firm has reserve oft 60,000. A and B demand that
reserve should be shared in proportion of capitals whereas C is of the opinion that it should be shared
equally as they do not have Partnership Deed. A and B agree to .Cs viewpoint.
What argument must have been put by C that convinced both A and Bi
32. A and 8 are partners in a firm. _They admit C as a partner with 1/Sth share in the profits of the firm.
· C brings t 4,00,000 as his share of capital. Calculate the value of C's share of Goodwill on the basis of h~
ustments is t 10,00,000. (Sample Paper 2DI~
capital, given that the combined capital of A and 8 after all adj_
[Hint: Cs Share of Goodwill = 1,20,000.
Total capital of new firm as per C's share~ 4,00,000 x 5/1) t 20,00,000
Less: Actual capital of A, Band C 10,00,000 + 4,00,000) t 14,00,000
Value of Firm's Goodwill t 6,00,000]
33. Geeta, Sunita and Anita were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 1st Januar)',
2015, they admitted Yogita as a new partner_for 1/l0th share. in the profits. on Yogita's ad~ission, :~:
Profit and Loss Account of the firm was showing a debit balance oft 20,000 which was credited by .
accountant of the firm to the Capital Accounts of Geeta, Sunita and Anita in their profit-sharing rati:1 '
1
. correc
Did the accountant give . t t rea t ment.7 G'Ive reason in support of your answer. (At 20 '
1
[Hint: No, the accountant did not give correct treatment as the debit balance of Profit and Loss Accoun
shows loss, it should have been debited to the Partners' Capital Accounts.] .
.
34• Karan, Nakul an~ Asha were partners ma firm sharing profits and losses in the ratio 3 : 2: 1. At th /irfll
of admission of a partner, the goodwill of the firm was valued at 2 00 000 The accountant of e I in
passed the entry m"ht eboo k sof account and thereafter showed goodwill
' ' ·at 2,00,000 as an aersse ,~
20
the Balance Sheet. Was he correct in doing so? Why? · (CBSE sample pap d i,e
·
[Hmt:
. No, t he accoun tan t's decIsIon
· · ·Is not correct because ·11 shoul
accord'mg t o· AS - 26, goodWI •d,10rit.l
recognised in the books only when consideration in mo ney or moneys, wo rth has been pal
 Chapter 5 . Admission of a Partner 5.85
A, 8, c and D were partners in a firm sharin .
3S, iheY admitted E as a new partner for ~ profits _m the ratio of 4: 3: 2: 1. On 1st January, 2015,
1I1
of goodwill premium which was correct! rec share 1_n the profits. E brought f 10,000 for his share
0rd
showed goodwill at f 1,00,000 in the bo~ks ed in the books by the accountant. Th~ accounta~t
u port of your answer. · Was the accountant correct in doing so? Give reason m
5 p (Delh 1. 2015)
[Hint No, the accountant is not correct R . .
goodwill is recognised in the b · eason. It 1s a self-generated goodwill and only purchased
ooks of account as per AS-26.]

EXERCISE

Calculation of New Profit-Sharing Ratio and Sacrificing Ratio

1• Raj,
.
Ram and Ramesh are partners sh ·
rtnersh"ip and . h" anng profits and losses in the ratio of s : 3 : 2. They admit Suresh
into pa give 1m 1/5th• sha re of profi ts. Fmd
• the new profit-sharing ratio.
.
[Ans.: New Profit-sharing Ratio-10: 6: 4: 5.]
2. Ravi and Mukesh are sharing profits in the ratio of 7 : 3. They admit Ashok for 317th share in the firm
which he takes 217th from Ravi and 117th from Mukesh.
Calculate new profit-sharing ratio.
[Ans.: New Profit-sharing Ratio-29: 11 : 30.]
3, A and 8 a~e partners sh~ring profits and losses in the proportion of 7 : s. They agree to admit C, their
manager, into partnership who is to get 116th share in the profits. He takes this share as 1/24th from
A and 1/Sth from 8. Calculate new profit-sharjng ratio.
[Ans.: New Profit-sharing ratio of A, 8 and C-13: 7: 4.]
4. A, 8 and C were partners in a firm sharing profits in the ratio of 3 : ·2 : 1. They admitted D as a new
partner for 1/8th share in the profits, which he acquired 1/16th from 8 and 1/16th from C. Calculate the
new profit-sharing ratio of A, 8, C and D. (Delhi 2016)
[Ans.: New Profit-sharing Ratio_.:.24 : 13 : 5 : 6.]
5. Bharati and Astha were partners sharing profits in the ratio of 3 : 2. They admitted Dinkar as a partner
for 1/Sth share in the future profits of the firm which he got equally from Bharati and Astha. Calculate
· the new profit-sharing ratio of Bharati, Astha and Dinkar. • (Delhi 2016 q
[Ans.: New Profit-sharing Ratio....:....5 : 3 : 2.]
6. Mohan and Mahesh are partners in a firm sharing profits and los·ses in the ratio of 3 : 2. Nusrat is admitted
as partner with 1/4 share in profit. Nusrat takes his share from Mohan and Mahesh in the ratio of 2 : 1.
Calculate new profit-sharing ratio.
[Ans.: New Profit-sharing Ratio-26: 19: 15.]
7. S, 8 and J were partners in a firm. Twas admitted as a partner in the partnership firm for 1/Sth share of
profits. Calculate the sacrificing ratio of S, Band J. (CBSE 2019)
[Ans.: Sacrificing Ratio of 5, 8 and J is 1 : 1 : 1.]
[Hint: Unless agreed otherwise, sacrificing ratio of old partners will be the same as their old profit-sharing .
ratio.]
8. P and Q were partners in a firm sharing profits in the ratio of 5 : 3. R was admitted for 114th share in
the profits, of which he took 75% from P and the remaining from O. Calculate the sacrificing ratio of
P and Q. (CBSE 2020)
[Ans.: Sacrifi~ing Ratio of P and Q-3: 1.]
9. Kabir and Farid are partners in a firm sharing profits and !osses in_ the tatio of 7 : ~- Kabir surrenders
2/l Oth from his share and Farid surrenders 1110th from his share m favour of Jyoti; the new partner.
Calculate new profit-sharing ratio and sacrificing ratio. (CBSE Sample Paper 2015)
· [Ans.: New Profit-sharing Ratio- 5 : 2 : 3; Sacrificing Ratio-2: 1.]
 10. Find New Profit-sharing Ratio: . the ratio of 3 : 2. 5 joins the firm. Rs
. . sharing profits rn . Urrend
(i) R 'and T are partners m a firm . favour of S. ers
d T 1/Sth of his share rn . b
1/4th of his share an ture the ratro etween A and 8 Would b
. c for 1/4th share. 1n u ' e ~.
(ii) . A and Bare partners. They admrt ·n the ratio of 3 : 2. They ad . · l.
(iii) A and B are partners sharing pro
fits and losses I
·. h from A and 4/Sth share from B.
rn1t f cor
. . es 1/Sth of hrs s are
1/Sth share in the profit. C aqurr . ·,ns the firm as a new partner for 1; th
(iv) A, B and Care partners in· the ratro· Of 1/2 ·• 1/3 ·• 1/6. O
·
JO (CBS6 sh are
. · h" · · al share. · £ 202oq
in profits. C would retain rs origin ·th 1/5th and 1/6th shar
. . C an d D as partners wr .
(v) A and B are equal partners. They admrt e respectiveIy,
. . tio of 5 : 3. c is admitted for 3/10th share of Profit h
(vi) A and 8 are partners sharing profits rn ra t ken by C equally from A and 8 alf
. ·tt d b A d the remarmng share was a .
of whrch was 91 e Y an • . .
32 . 23 . (ii) New Profit-sharing Ratio of A
[Ans.: (i) New Profit-sharing Ratio of R, T and 5-45. . . ,14 . 6 • 5· (iv) New Profit-shar , B.and
C-2: 1: 1; (iii) New Profit-sharing Ratio of A, Ba nd C- ·. · ' mg Rat,0 01
A, B, C and D-12 : 8 : 5 : 5; (v) New Profit-sharing Ratio ~f A, 8, and D-19 : 19: 12 : 10;
(vi) New Profit-sharmg Rat,o of A, Band C-4: : 3.J
3
11. Mahi and Raj~t were in partnership sharing profits and losses in the r~tio of~: 3· They a~mitted Kripa as
a new partner. Kripa brought~ 60,000 as her share of goodwill premium whrch was entirely credited to
Mahi's Capital Account. On the date of admission, goodwill of the firm was valued at t 4,20,000. Calculate
the new profit-sharing ratio of Mahi, Rajat and Kripa: : . . . (CBS£ 2020)
. ·. [An·s.: New Ratio of Mahi, Rajat and Kripa = 3 : 3: I.]
12. Rakesh and Sure.sh are sharing profits in the ratio of 4 : 3. Zah·e~r joi.ns and the new ratio among Rakesh,
Suresh and Zaheer is 7 : 4 : 3. Find
. out ;the sacrificing ratio. · [Ans.:,Sacrificing Ratio- I : 2.]
13. Karim and Rehman are partners sharing profits in the ratio •of 3 : 2. Naval is. admitted as a partner. New
profit-sharing ratio among Karim, Rehman and Naval is 4 : 3 : 2. Find .the sacrificing ratio.

·[Ans.: Sacrificing Ratio-7: J]

14. A, B and C ~re partners shating profit~ in the ratio of 4 : 3 : 2. D is .admitted for 113rd share in future
profits. What is the sacrificing ratio? [Aris.: Sacrificing Ratio-4 : 3: 2.]
1 s. A, B, C and D are in partnership sharing pro~ts and losses in the ratio of 36 : 24 : 20 : 20 respectively.
E joins the partnership for 20% .share and A, 8, C and D in future would share profits among themselves
as 3/1 o : 4/1 O : 2/1 O : 1/10. Calculate new profit-sharing ratio after E's admission. ·

[Ans.: New Profit-sharing Ratio of A, B, C, D and E-6 : 8 : 4: 2 : S.]

16. Gautam and Yashica are partners sharing profits and losses in th . f d. . A ma into
. . . . e ratro o 3 : 2. They a mrt s
partnership. Ga~tam gives 1/3rd of his share while Yashica gives 1/l 0th from his share to Asma. cakulate
new profit-sharing ratro and sacrificing ratio.

. [Ans.: New Profit-sharing Ratio-4 : 3 : 3; Sacrificing Ratio-2: 1.l

17. A, B and C are partners sharing profits in the rat·, f for
0 0 2
. retain
1/6th share. C wrll . his original share Cal · -h : 2 : 1· D ·rs a d mrtted
1
· as a new Partner.
·
· cu ate t e new fi h . . . ratio.
. • . Pro t-s anng ratio and sacrificing
[Ans .• New Profit-sharing R t· , 1•1.l
[Hint: When the sacrifice of partners is not giv .h
10
a -19 s
. · 19 · 12 : 10; acr,·t; cmg
· Rat10- . ·
· ratio is same as the o Id rat10· 50'
.] t en sac n·fi crng
Sacrificing Ratio of A and B = ~: 2 or 1 : len,
18. Amit and Vidya are partners sharing profits in th . hO
. . . . -- e ratro of 3 . 2 Th hiP w
acquires 1/5th of hrs share from Amit and 4125 th · · ey admit Chintan into partners iO
d S
.fi . R.. share from v·d ·ng Rat
an acn crng atro. . ' ya. Calculate New Profit-shan
 Chapter 5 . Admission of a Partner 5.87
[Ans.: New Profit-sharing Ratio of Amit, Vidya and Chintan- 14 : 6 : 5;
. • . Sacrificing Ratio of Amit and Vidya-1 : 4.]
[Hint: since Chinftan a~quires 115th of his share from Amit it means he acquires 415th (i.e., 1 - 1/5) of
his share rom V1dya. ' .
if 4/5 of Chintan's share = 4/25 (Received from Vidya)
Chintan's share= 4/25 x 5;4 = 115
Share Acquired by Chintan: from Amit= 1/5 x 115 = 1125; from Vidya = 4/25.]

Admission of a Partner and Treatment of Goodwill

Goodwill/~remium for Good.will is brought in Cash by the New Partner and Retained
in the Busmess
19• Gold and Silver are partners sharing profits and losses in the ratio of 2 : 5. They admit Copper on the
condition that he will bring 14,000 as his share of goodwill to be distributed between Gold and Sliver.
Copper's share in the future profits or losses will be 114th. What will be the new profit-sharing ratio and
what amount of goodwill brought in by Copper will be received by Gold and Silver?
[Ans.: Gold will get~ 4,000; Silver will get~ 10,000; New Profit-sharing Ra,tio-6: 15: 7.]
20. Vimal and Nirmal are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner
Kailash is admitted. Vimal gives 1/Sth of his share and Njrmal gives 2/Sth of his share in favour of Kailash.
For the purpose of Kailash's admission, goodwill of the firm is valued at 75,000 and Kai lash brings his
share of goodwill in cash which is retained in the business. Journalise the above transactions.
[Ans.: New Ratio-12: 6: 7; Sacrificing Ratio-3: 4; Kai/ash's Share of Goodwill-~ 21,000 ft 75,000 x 7/25);
(i) Dr., Bank Ale and Cr. Premium for Goodwill Ale by 21,000; (ii) Dr. Premium for
Goodwill Ale by~ 21,000; 6. Vimal's Capital Ale by~ 9,000 and Nirmal's Capital Ale by~ 12,000.]
21. Pass Journal entries to record the following arrangements in the books of the firm:
(a) B and Care partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill)
of 2,000 for 1/4th share of the profits, shares of B and C remain as before.
(b) 8 and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of 2,100
for 1/4th share of profits which he acquires 1/6th from 8 and 1/12th from C.
22. 8 and C are in partnership sharing profits and losses as 3 : 1. They admit D as partner in the firm, D pays
premiu,:n of~ 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future
profits and losses equally. Draft Journal entries showing appropriations of the premium money.
[Ans.: Dr. Premium for Goodwifl Ale by~ 15,000 and Cs Capital Ale by 3,750;
Cr. B's Capital Ale by~ 18,750.]
23. Geeta and Sunita are partners in a firm sharing profits in the ratio of 3 : 2. They admit Anita as a new partner.
The new profit-sharing ratio between Geeta, Sunita and Anita will be 5 : 3 : 2. Anita brought in 25,000
for her share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.
[Hint: Goodwill will be shared by Geeta and Sunita equally.]
24. A and B are in partnership sharing profits and losses in the ratio of 5 : 3. C is admitted as a partner who
pays 40,000 as capital and the necessary amciunt of goodwill which is valued at 60,000 for the firm.
His share of profits will be 1/Sth which he takes 1/10th from A and ~/10th from 8.
Pass Journal entries and also calculate future profit-sharing ratio of the partners.
[Ans.: New Profit-sharing Ratio-21 : 11: B.]
2S, X and y are partners sharing profits in the ratio of 3 : 1. Z is admitted as a partner for which
he pays 30,000 for goodwill in cash. X, Y and Z decide to share the future profits equally.
· Pass an adjustment Journal entry to give effect to the above arrangement.
[Ans.: Dr. Cash Ale by~ 30,000 and Y's Capital Ale by~ 7,500; Cr. X's Capital Ale by~ 37,500.]
 5.88 Double Entry Book Keeping---:-CBSE XII .
. . the ratio of 7 : 5. They admit Cris th .
. fits and losses m b . . f 1O 00 , e1r M
26. Adil and Bhavya are partners sharing pro . the business. Cris rings ~n , O for his ca _ana9er
into partnership who is to get 116th share m . es 1/24th from Adil and 118th from Bh P1ta1 and'
J
t 3,600 for the 1/6th share of goo dWI·11 which he acquir
000
.
Pass necessary ourna 1 entries for Cris's
avya
· Pr0~
for the first year of the new partners hip was f 24, · adni·lssio~
'11
and apportion the profit between th e partners. fi . Adil-f 13,000; Bhavya-t 7,000· c .
. . . [Ans.: Share of Pro t. . ' r,s--~ 4,oao
. the ratio of 3 : 2. They admit Payal as P .)
27. Anshul and Parul are partners sharing profits in_ f 00 000 as capital and her share ttner for
5
114th share in profits on 1st April, 20 21 · Payal brings ,'pu~chase of average profit of lasti 900dwill
by cheque. It was agreed to value goodwill at th ree years f our Years.
Profits for the last four years ended 31st March, were:
4,00,000
2018 5,00,000
2019
6,00,000
2020
2021 7,00,000

Additional Information:
1. Closing stock for the year ended 31st March, 2020 was overvalued by f 50,000.
2. t 1,00,000 should be charged annually to cover management cost.
Pass necessary Journal entries on Payal's admission. . ·
[Ans.: (i) Dr. Bank Ale by t 8,37,500; Cr. Payal's Capital Ale by f 5,00,000 and Premium for
i
Goodwill Ale by 3,37,500; (ii) Dr. Premium for Goodwill Ale by~ 3,37,500;
Cr. Ansul's Capital Ale by t 2,02,500 and Parul's Capital Ale by~ 1,35,000.)
28. A and B are partners in a firm sharing profits and losses in the ratio of 3 ·: 2. They admit C into partnership
for 1/Sth share. C brings t 30,000 as capital and t i0,000 as goodwill. At the time of admission of c,
goodwill appeared in the Balance Sheet of A and B at f 3,000. New profit-sharing ratio of the partners
will be 5 ;\3 : 2. Pass necessary Journal entries.
[Ans.: (i) Dr1 A's Capital Ale by t 1,800 and B's ,Capital Ale by t 7,200; Cr. Goodwill Ale by f 3,000.
(ii) Dr. Bank Ale by t 40,000; Cr. C's Capital Ale by f 30,000 and Premium for Goodwill Ale by z10,000.
(iii) Dr. Premium for Goodwill Ale by t 10,000; Cr. A's Capital Ale and B's Capital Ale by z5,000
. each in their Sacrificing Ratio-1:1.)
29. Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the
books at t 4,40,000. Raja was admitted to the partnership. New profit~sharing ratio among Anu, Bhagwan
and Raja was 2 : 2 : 1. - ·
Raja brought t 1,00,000 for his c_apital and n~cessary cash for his'goodwill premium. Goodwill of the firm
was valued at t 2,50,000.
Record necessary Journal entries in the books of the firm for the above transactions. (Al 2015Cl
~Ans.: (i) Dr. Anu's Ca~ital Ale by f 3,30,000 and Bh~gwan's Capital Ale by t 1, 10,00;
Cr. Goodw1/I Ale by f 4,40,000; (ti) Dr. Bank Ale by f 7 50 000· C R . , C ·t I Ale by t 1,00,0
. and Premium for Goodwill Ale by f 50 000·
. P . & •, . ,
mo'
or.' Bh I r. ~Jacs ~tp/1 MaC by t 37 soo and
• agwan s ap, a ' soo.J
rem,um ,or Goodwill Ale by f 50,000,· Cr. Anu's Capital Ale by t Bl, ·
Premium for Goodwill brought in Kind
• a firm sharing profits in th
30. Ram and Mohan are partners in .· . theY adrn 1't
10 21
Sohan as a partner for 114th share in the profits. Sohan co~t~: of 3 : 2- ~n 1st April, 20 cis his capital
and for his share of goodwill: uted following assets towar
Stock f 60,000; Debtors f 80,000; Land 'f 1,00,000, Plant and . ·
On the date of admission of Sohan, the goodwill of the firm Machinery t 40,000.
Pass necessary Journal entries in the books of th fi Was valued at f 6,00,000.
e rrn on Sohan' d . . ao,·
[Ans.: Goodwill Brou h s a m1ss1on. . f 130,0 '
9
t by Sohan by-t 7,50,000 and Capital- t ~,ooo.l
0
Share in Goodwill: Ram-t 90,000; Mohan-
 remium for Goodwill is b h . Chapter 5 · Admission of a Partner 5.89
When P roug t in by N
Id partners Fully or Partly ew or Incoming Partner and is withdrawn by
0 rt .
,, and B are pa ners in a business sh .
31 . ,, . . 1 anng profits and I
2020, their capita s were f 8,000 and t 10 asses in the ratio of 113rd and 213rd. On 1st April,
· e him 114th shar · ' 000 respectiv I o ·
and giv e In the future profit C . e y. n that date, they admit C in partnership
The amount of goodwill is Withdrawn by th s. brings t 8,000 as his capital and f 6,000 as goodwill.
the Capital Accounts of all the Partner C e old partners in cash. Pass the Journal entries and show
. f t s. aIculate prop t· . .
tosses m u ure. [Ans.: New R t· or ion in which partners would share profits and
a 10-1 . 2 . 1. C . .
A and 8 were partners in a firm sh . · · ' ap,ta/ Nes: A-f 8,000; B-f 10,000; C-f 8,000.]
32. armg profits and I · • ·
partner for 3llth share in the profit and th asses in the ratio of 3 : 2. They admitted C as a new
as his capital and f 1,50 000 as premi e~ new profit-sharing ratio will be 2 : 2 : 3. C brought f 2,00,000
by A and 8 from the fir~ Calcu· lat u~fi ~r goodwill. Half of their share of premium was withdrawn
· e sacn cmg rat'10 d
transactions in the books ·of the fi rm. an pass necessary Journal entries for the above
(Delhi 2009 q
[Ans.: Sacrificing Ratio-11 : 4.]
When Only Part of Premium for Goodwill is brought by N_ew Partner in Cash
33 A and 8 are partners sharing profits in th ·
, •. · . . e ratio of 2 : 1. They admit C for 114th share in profits. C brings
m f 30,000 for his capital and f 8,000 out of his share of 3F 10 & d - & d · ·· d ·11
. . " ,000 ,or goo w1 11. 8e,ore a m1ss1on, goo w1
existed m the books at f 18,000. Pass Journal entries to give effect to the above arrangement. ·
[Ans.: (i) Dr. A~ Capital Ne by f 12,000 and B's Capital Ne by f 6,000; Cr. Goodwill Ne by f 78,000.
(ii) Dr. Bank Ne by f 38,000; Cr. C's Capital Ne by f 30,000 and Premium for Goodwill Ne by f 8,000.
(iii) Dr. Premium for Goodwill Ne by t 8,000 and C's Current Ale by f 2,000;
Ale by f 6,667 and B's Capital Ale by f 3,333.]
Cr. A's Capital _
34. A and 8 are partners sharing profits and losses in the ratio of 3 : 2. They admit C as partner in the firm
for 114th share in profits which he takes 1/6th from A and 1112th from B. C brings 60% of his share of
firm's goodwill. Goodwill of the firm was valued at f 1,00,000. Pass necessary Journal entries to record
this ar.rangement.
[Ans.: (i) Dr. Bank Ale and Cr. Premium for Goodwill Ale by f 15,000.
(ii) Dr. Premium for Goodwill Ne by t 15,000; Cr. A's Capital Ale by f 10,000 and B's Capital Ale by t 5,000.
(iii) Dr. C~ Current Ne by t 10,000; Cr. A's Capital Ale by f 6,667 and B's Capital Ale by t 3,333.]

When New or Incoming Partner is not able to bring his Share of Premium for Goodwill
35. On the admission of Rao, goodwill of Murty and Shah is valued at f 30,000. Rao is to get 1/4th share of
profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao is una~le to bring a~o~nt of
goodwill. Give Journal entries in the books of Murty and Shah when: (a) Goodwill does not exist m the
books· and (b) Goodwill exists in the books at f 10,000.
'
[Ans.: (a) Dr. Rao's Gurren t Mc b1v
J
f 7.500·
, ,
Cr.• Murty's Capital• Ale by f 4,500 and Shah's Capital
•
Ale by t 3,000.
(b) (i) Dr. Murty's Capita• I 111c
" , bvJ
t 6, 000_ and Shah's Capital Ale. by- f 4,000; Cr. Goodw1/I
, •
Ale by f 70,000.
(ii) Dr. Rao's Current Ale by t 7,500; Cr. Murty's Capital Ale by f 4,500 and Shahs Capital Ale by t 3,000.]
· h · profits in the ratio of 5 · 4 : 1. Two new partners D and Eare admitted
' 36, A Band Care in partnerships anng · . · .
' . . . . 3 . 4 . 2 : 2 : 1. D is to pay f 90,000 for his share of Goodwill but E is
and the new profit-sharing ratio is · · · h h · · I
d •11 B0 th the new partners in.traduced f 1,20,000 eac as t e1r capita .
unable to bring his share of Goo WI • .
y, ; cessary Journal entries.
ou are required to pass ne . . b A and 8 = 75: 4. Since c is gaining 4160th share in the
[Ans.: (i) Sacrificing Ratio e,.twAee;nd 8 proportionately (i.e., t 5,40,000 x 4/60 = f -36,000).
fi 5 h will also compensa,e -
· pro t , e . of Goodwill: Dr. C's Capital Ale by f 36,000; E's Current Ale by t 45,000 and
st
(ii} For A~1u ment OOO; Cr. A's Capital Ale by f 1;35,000 and B's Capital Ale by t 36,000.]
Premium for Goodwill Ale by f 90,
 5.90 Double Entry Book Keeping-CBSE XII
Hidden Goodwill
3 1. A and 8 are partners in a firm with capital of~ 60,000 and ~. 1,20,0~0 r~spectively. They decide to ad .
into the partnership for 1/4th share in the future profits. C is to bring ma sum oH 70,000 as hi '11itc
S Capi1,I
Calculate amount of goodwill. (A/ 2 'O ,
. 008
[Ans.: Goodwi/1-t Q
3000
38. Anil and Sunil are partners in a firm with fixed capitals of~ 3, 2 0,000 and 2,40,00Q resp : 0.1
They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st A/t201 1
Vely,
Charu brought 3,20,000 as her share of capital. rr 2.

l,O;~;
Calculate value of goodwill and record necessary Journal entries. . (A/ 2
[Ans.: (i) Dr. Bank Ale and Cr. Charu's Capital Ale by 3,20,000; (ii} Dr. Ch~ru's Current Ale by t
Cr. Anil's Current Ale bv 50 000 and Sunil's Current Ale by~ 50,000. Hidden Goodwill bv r 400 ' '
; • I • • • ;
1
,000,]
39. Bhuwan and Shivam were partners in a firm sharing profits m t.he ratio of 3 : 2. Their capitals
50,000 and 75,000 respectively. They admitted Atul on 1st April, 2021 as new partner for 114th s~ere
in future profits. Atul brought~ 75,000 as his capital. Calculate the value of goodwill of the firm and rec:;~
necessary Journal entries for the above transactions on Atul's admission. (Foreign 2014, Modifie~
[Ans.: Value of goodwill of the firm-~ 1,00,000; Atul's share in goodwill-t 2S,OOO.
(i) Dr. Bank Ale and Cr. Atul's Capital Ale by 75,000; (ii) Dr. Atul's Capital Ale 01
Atul's Current Ale .b y~ 25,000; Cr.Bhuwan's Capital Ne byt 15,000
· and Shivam's Capital Ne by t 10,000.J
40. X and Y: are partners with capitals of~ 50,000 each. They admit Z as a partner for 1/4th share in the
profits of the firm. Z brings in 80,000 as his share of capital. Profit and Loss Account showed a credit
balance of 40,000 as on date of admission of Z.
Give necessary Journal entries to record the goodwill. [Ans.: Hidden Goodwi/1-t 1,00,000.]
[Hint: Hidden Goodwill = (~ 80,000 x 4/1) - 50,000 + 50,000 + ~0,000 + 80,000).]
41. Asin and Shreyas are partners in a firm. They admit Ajay as a new p,a rtner with 115th share in the
profits of the firm. Ajay brings 5,00,000 as his share of capital. The value of total assets of the firm was
15,00,000 and outside liabilities were valued at 5,00,000 on that date. Give necessary Journal entry
to record goodwill at the time of Ajay's admission. Also show your workings. (A/ 2013)
[Ans.: Dr. Ajay's Capital/Current Ne by t 2,00,000;
Cr. Asin's Capital Ne by~ 1,00,000 and Shreyas's Capital Ne by t 1,00,000.)

Miscellaneous
42, Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2. The fixed capital of Disha is
4,80,000 ahd of Divya is 3,00,000. On 1st April, 202f, they admitted Hina as a new partner for
th
1/5th share in future profits. Hina brought 3,00,000 as her capital. Calculate value of goodwill of e
firm and record necessary Journal entries on Hina's admission. · (Delhi 2013 C, Modifiedi
[Ans.: (i) Dr. Ban~ Ale and Cr. Hina~ Capital Ale by 3,00,000; {ii) Dr. Hina's Current Ale by t B
60
4
,o~;
Cr. Disha's Current Ale by 50,400 and Divya's Current Ale by t 33, ·
43. f and F were partners in a firm sharing profits in the ratio of 3 : 1. They admitted G as a new part;:
on 1st April, 2021 for 1/3rd share. It was decided that E, F and G will share future profits equ
G brought f 50,000 in cash and machinery valued at f 70,000 as premium for goodwill.
Pass necessary Journal entries in the books of the firm. ·
. · t 70000;
.[Ans.: (i) Dr. Cash Ale by 50 000 and Machinery Ale by ' d
. d . , 200000n
Cr. Premwm for Goo will Ale by~ 1,20,000. (ii) Dr. Premium for Goodwill Ale by t 1, ' l
F's Capital Ale by~ 30,000; Cr. E's Capital Ale by t /,So,OOo·
[Hint: E's Sacrifice = 5/12; F's Gain = 1/12.]
 Chapters. Admission of a Partner 5 •91

verrYla and Sharma are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted
IA· Ghosh as a new partn_er for l~Sth s~are of profits. Ghosh is to bring in t 20,000 as. capital and f 4,000
as hiS share of goodwill" premium. Give the necessary Journal entries:
) When the amount of goodwill is retained in the business.
~:) When the amount of goodwill is fully withdrawn.
c) When SO% of the amount of goodwill is withdrawn.
~) When goodwill is paid privately. (NCERn
Aman commenced business with a capital off 2,50,000 on 1st April, 2016 _During the five years ended
45· st March, 2021, the following profits and losses were made:
31
31 st March, 2017-Loss f 5,000 31st March, 2020-Profit f 20,000

31 st March, 2018-Profit f 13,000 31st March, 2021-Profit f 25,000

1st March, 2019-Profit f 17,000
3
During this period he had drawn f 40,000 for his personal use. On 1st April, 2021 , he admitted Boman
into partnership on the following terms:
Boman to bring for his half share in the business, capital equal to Arna n's Capital on 31st March, 2021
and to pay for the one-half share of goodwill of the business, on the basis of three times the average
profit of the last five years. Prepare the statement showing what amount Boman should invest to become
a partner and pass entries to record the transactions relating to admission.
[Ans.: Boman will have to bring f 2,80,000 as Capital and f 21,000 for Goodwill.]

Revaluation of Assets and Reassement of Liabilities

46. Pass entries in the firm's Journal for the foilpwing on admission of a partner:
{i) Machinery be reduced by f 16,000 and Building be appreciated by f 40,000.
_(ii) A provision be created for Doubtful Debts@ 5% of Debtors amounting to f 80,000.
(iii) Provision for warranty claims be increased by f 12,000.
(iv) Furniture {Book Value f 50,000) is to be reduced by 40%.
(v) Furniture {Book Value f 50,000) is to be reduced to 40%.
[Ans.: (i) (a) Dr. Revaluation Ale and Cr. Machinery Ale by f 76,000.
(b) Dr. Building Ale and Cr. Revaluation Ale by f 40,000.
(ii) Dr. Revaluation Ale and Cr. Provision for Doubtful Debts by f 4,000.
(iii) Dr. Revaluation Ale and Cr. Provision for Warranty Claims Ale by f 72,000.
(iv) Dr. Revaluation Ale and Cr. Furniture Ale by f 20,000 (f 50,000 x 40/100).
(v) Dr. Revaluation Ale and Cr. Furniture Ale by f 30,000(f 50,000 x 60/100).]
47. Pass entries in firm's Journal for the following on admission of a partner:
(i) Unrecorded Investments off 20,000 are to be accounted.
(ii) Unrecorded liability towards suppliers for 't 5,000 is to be accounted.
(iii) An item of f 1,600 included in Sundry Creditors is not likely to be claimed and hence should be
written back.
[Ans.: (i) Dr. Investments Ale and Cr. Revaluation Ale by f 20,000.
(ii) Dr. Revaluation Ale and Cr. Sundry Creditors Ale by f 5,000.
(iii) Dr. Sundry Creditors and Cr. Revaluation Ale by f 1,600.]
48, X and y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed
'new profit-shari~g ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts
existed at f SO,OOO and f 5,000 respectively. All debtors are good. Pass the necessary Journal entries.
[Ans.: (i) Dr. Provision for Doubtful Debts Ale and Cr. Revaluation Ale by f 5,000.
(ii) Dr. Revaluation Ale by f 5,000; Cr. X's Capital Ale by f 3,000, and Y's Capital Ale by f 2,000.]

h,
 5.92 Double Entry Book Keeping-CBSE XII

49• X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a
114 th share. At the time of admission of Z, Stock (Book Value t 1,00,000) is to be reduced bPartne, for
40
Furniture (Book Value t 60,000) is to be reduced to 40%. Pass the necessary Journal entries. y % and
. __[Ans.: (i) Dr. Revaluation Ale by t 76,000; C': Stock Ale by t 40,~00 and Furn~ture Ale by'{
(ii) Dr. X's Capital Ale by t 45,600 and Y's Capital Ale by t 30,400, Cr. Revaluation Ale by t 36,00Q_
SO X · 76,0001
• and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 114th .
z,
of profits. At the time of admission of Investments appeared at t 80,000. Half of the invest share
be taken by X and Y in their profit-sharing ratio at book value. Remaining investments were rn~nts to
t S0,000. Pass the necessary Journal entries. . va Ued at
[Ans.: (i) Dr. X's Capital Ale by t 24,000 and Y's Capital Ale by t 76,000; Cr. Investments Ale by'{
4 0
(ii) Dr. Investments Ale and Cr. Revaluation Ale by t ~ 00.
1
(iii) Dr. Revaluation Ale by t 70,000; Cr. X's Capital Ale by t 6,000 and Y's Capital Ale by t ,00Q.
· . 4,000,)
51. Ashok and Bhaskar are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Cham
a ·partner for 114th share of profits. At the time of admission of Chaman, Sundry Debtors and Prov~"- as
i · 1s1on
or Doubtful Debts existed at t 76,000 and t 8,000 respectively. t 6,000 of the debtors proved b
A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary Journal entn:~-
[Ans.: (i) Dr. Bad Debts Ale and Cr. Sundry Debtors Ale by'{- 6,ooo:
(ii) Dr. Provision for Doubtful Debts Ale and Cr. Bad Debts Ale by'{- 6,ooo.
(iii) Dr. Revaluation Ne and Cr. Provision for Doubtful Debts by'{- 1,500._
*5/700 76,000 - t 6,000) - B,OQO - t 6,000) == '{ 1,500.
(iv)·Dr. Ashok's Capital Ale by t 900 and Bhaskar's Capital Ale by t 600; Cr. Revaluation Ale by'{- 1,500_
1
52, At the time of admission of a partner Suresh, assets and liabilities of Ramesh and Naresh were revalued
as follows:
(a) A Provision for Doubtful Debts @10% was made on Sundry Debtors (Sundry Debtors t 50,000).
(b) Creditors were written back by t 5,000.
(c) Building was appreciated by 20% (Book value of Building t 2,00,000).

I
(d) Unrecorded Investments were valued at t 15,000.
(e) A Provision oft 2,000 was made for an Outstanding Bill for repairs.
(f) Unrecorded Liability towards suppliers was t 3,000.
Pass necessary Journal entries.
[Ans.: (i) Dr. Revaluation Ale by t 10,000; Cr. Provision for Doubtful Debts by'{ 5,000;
Provision ~or Outstanding Repairs Bill Ale by t 2,000 and Creditors Ale by t 3,000.
(ii) Dr. Creditors Ale by t 5,000; Building Ale by t 40,000 and Investment Ale by'{ 15,000;
Cr. Revaluation Ale by'{ 60,000.
(iii) Dr. Revaluation Ale by t 50,000 (Gain (Profit) on Revaluation);
Cr. Ramesh's Capital Ale by t 25,000 and Naresh's Capital Ale by t 25,000,]

Reserves and Accumulated Profits/ Losses and Preparation of Revaluation Account.

53. Ram and Shyam were partner~ in a firm sharing profits and losses in the ratio of 2 : 1. Mohan was admitted
for 1/3rd share in the profits. On the date of Mohan's admission, the Balance Sheet of Ram and Shyam
showed General Reserve of t 2,50,000 and a credit balance of '{ 50,000 in Profit and Loss Account. Pass
necessary Journal entries on the treatment of these items on Mohan's admission.
· (Ans.: Dr. General Reserve Ale by '{ 2,50,000 and Profit and Loss Ale by t so,oOO;
Cr. Ram's Capital Ale by t 2,00,000 and Shyam's Capital Ale by'{ 1,00,ooo.]
54. xand y are partners in a firm sharing profits and losses in the ratio of 3 : 2. on' 1st April, 2021, th eY
admit z as a partner for 115th share in profits. On that date, there was a balance of'{ 1,50,000 in Genera:
Reserve and a debit balance oft 20,000 in the Profit and Loss Account of the firm. Pass necessary Journa
entries regarding adjustment of reserve and accumul~ted profit/loss.
[Ans.: (i) Dr. General ReseNe Ale by t 7,50,000; Cr. X's Capital Ale by~ 90,000 and Y's Capital Ale by t 60,00oj
(ii) Dr. X's Capital Ale by '{ 72,000 and Y's Capital Ale by t 8,000; Profit and Loss Ale by t 2o,ooo.
 Chapter 5. Admission of a Partner S.93
yand z are partners sharing profits and lo .
sS· (a) X, th share. Following is the -extract of th Bs~es in the ratio of 5 : 3 : 2. They admit Was partner for
1/6 e a ance Sheet on the date of admission:
f Assets
uabilitieS
ral Reserve 36,000 Advertisemen~ Suspense Ale 24,000
Gene ncy Reserve 6,000
Conrin9ed LOSS A/c 18,000
profit an
pass necessary Journal entries.

(bl Give _t~e Journa_l entry ~o di st ri~ute 'Workmen Compensation Reserve' oft 72,000 at the time of
admission of Z, if th ere is no claim against it. The firm has two partners X and Y.
(cl Give the Journal entry to diSt ribute 'Workmen Compensation Reserve' of t 72 000 at · the time of
admission of Z, if there is claim of 'f 48,000 against it. The firm has two partner; X and Y.
(d) Give the Journal entry to distribute 'Investment Fluctuation Reserve' of t 24,000 at the time of
admission of Z, when Investment (Market Value t 1,10,000) exist~ at t1 ,20,000. The firm has two
partners X a~d Y.
(el Give the Journal entry to distribute 'General Reserve' oft 4,800 at the time of admission of Z, when
20% of General Reserve is to be transferred to Investment Fluctuation Reserve. lhe firm has two
partners X and Y.
(fl A, B and C were partners sharing profits and lasses in the ratio of 6 : 3 : 1. l'hey take D into
partnership with effect from 1st April, 2021. The new profit-sharing ratio between A, IJ, C and D will be
3 : 3 : 3 : 1. They also dedde to record the effect of the following without affecting their book values,
by passing an adjustment entry: · Sook Values ~)
General Reserve 1 ,S(),()O()
Contingency Reserve 60,000
Profit and Loss A/c (Cr.) 90,000
Advertisement Suspense Ale (Dr.) 1,20,000
Pass the necessary adjustment entry through the PartMr's Current Account. .
[Ans.: (a) (I) Dr. General.Reserve Alt by~ 36,000i CMtlrlgenty ffeserve Alt by f 6/JOOJ and Pttmt and Loss Ale
, by t 18,ooo;·cr. X's Capital.Ale byt 3oJ)(J(J; Y1 Ct1pltal Ale byt 1/J/J(J()ar,d t '§ tqpltuf Alt byf 11,(}()().
(UJ Dr. X's Capital Alt by t 1z,tJOdi Y~ Capital Alt by t ft160 dtrd t 's Capital Ale by t 4,800;
tr. Advtrtlsemer,t 5tBpense Alt by t ' 24,000.
(b) or. Workmen C<,mpensatlon Reserve Ale by f 72lJOO; Ct, X's Capital Ale by~ J6lJ00
• and Y'..9 Capita( Ale by t 36,0()0.
(c) Dr. Workmen compensaflM ReseNe Ale by t 12,()()0: Ct. Workmen comper,~atlon
clafm Alt by't 48,()()(J; X'f Capital Alt by t 1z,(JOO at1d Y~ Cap;taf Ale by t 12/100.
(d) Dr. fnvesfment"Fluduatlon ReserVe Alt by 't Z4lJ00; Ct. lnvestf!1ent Alt by t 1o,(}(J(J;
· X~ Capital Ale by t 1,000 and Y's Capital Alt t,y "f 7,0(J(J,
(eJ Dt. Get1eral Reserve Ale by't 4,800i Ct. lnve§fment Ffuct11ati0r1 Reserve Ale t,yt 960;
X~ C'1pltal Ale by"f 1,910 and Y's Capltt1/ Alt by'f 1/JZO,
(fJ Dr. O cuaent Ale by t 16,000 and D's Ccittenf Alt byf 11JlJ(J(J; Ct. A's Current Alt by~ 54,(J()(J,J

Preparation of Capital Accounts and Balance Sheet

56, X, Y and tare equal partr'lers·with capitals of '( 15,oOai 't 11J~6 ~nd t 20,006 respettively. They agree
~o _adrnit W ihto e4ual parfnt'.!rshlr,- upon payment In ~asf'i t 1~/JOO ~of} /4th share of_ g60dw1U ai'id
{ 18,06() as his capital, both sums· to r'enicill'T in the b~s,iness-, Hablllties- 6f the olcf fltJ'!"',Wefe t J(),00()
an~ the assets, apart from cash, c6nslst 6f Motors t 12,006~Fur~~tur~ l 4,00o, §toe~f 26,soo and oebfors-
37,860. TM M6t61's- at1d furniture were ,~alued at t ~,566 and f J,806 rE!·si,ecttvely.
l>ass Joornal entries t() give effect to the above atl'ar'igeml!nf al'td al~6 sh6WB'alant: She~' of the new fifffl.
[Ailf,f L6ss Ofl h~VtJ/tJtttlM~t z,J(J(JJ haltiftt e Sheet T6ttJl-'t f, 1Z,IJ(J(J_J
 5 94
• Double Entry Book Keeplng-CBSE XII
57
• Following was the Balance Sheet of A and B who were sharing profits in the rat·
. 31st March, 2021: 10 of .2:
Liabilities ,., 1 ai
, Assets · 01
Capital A/cs:
A Building
B 15,000 Plant and ·Machinery
Sundry Creditors 10,000 25,000 Stock
32,950 Sundry Debtors
Cash in Hand
57,950

They admit C into partnership on 1st April, 2021 on the following terms:
(a) C was to bring t 7,500 as his capital and t 3,000 as goodwill for 114th share in the firm.
(b) Values of the .Stock and Plant and Machinery were to be reduced by 5%.
(c) A ~r~vision for Doubtful Debts was to be created in respect of Sundry Debtors t 37s.
(d) Building was to be appreciated by 10%.
Pass necessary Journal entries to give effect to the arrangements. Prepare Profit and Loss Ad'
Account (or Revaluation Account), Partners' Capital Accounts and Balance Sheet of the new fi JUS!rnen1
[Ans.: Revaluation Gain (Profit)-~ 750; Capital Ales: A~~·
58 · 8-'t 11,250; C-'t 7,500; Balance Sheet Total-{ 77f00:
• A and B are carrying on business in partnership and sharing profits and losses in the ratio of . 69'lh00:I
Balance Sheet as at 31st March 2021 stood as· 3 · 2· err
Liabilities '
't Assets .
Creditors
General Reserve 11,800 Cash
20,000 Stock 1,S00
A's Capital
51,450 Debtors · 28,000
B's Capital
36,750 88,200 Furniture 19,SOO
Machinery 2,S00
Goodwill 48,SOO
20,000
1,20,000
1,20,000
They admit C into partnership on 1st April, 2021 and give him 1/Sth share in future profits on the
following. terms:
(a) Goodwill of the firm be valued at twice the average of the last three years' profits which amounted
to f 21,000; f 24,000 and 't 25,560.
(b) C is to bring cash for the amo'i.mt of his share of goodwill.
(c) C is to bring cash 't 15,000 as his capital. _ ·
Pass Journal entries recording these transactions, draw out the Balance Sheet of the new firm and
determine new profit-sharing ratio.
[Ans.: Balance Sheet Total-'t 1,20,880; New Profit-sharing Ratio-21 : 14: S.]
59. Given below is the Balance Sheet of A and 8, who are carrying on partnership business on 31st March,
2021. A and 8 share profits and losses in the ratio of 2: 1.
BALANCE SH ET
E OF A AND 8 as at 3 1st March, 2021
Liabilities 't Assets {

Bills Payable 10,000 Cash in Hand 10,000

Credito(s 58,000 Cash at Bank 40,000
Outstanding Expenses 2,000 Sundry Debtors 60,oOO
Capital Ncs: Stock 40,oOO
1,80,000 Plant 1,00,000
A
8 1,50,000 3,30,000 Building
4,00,000
__i::::-
 Chapter 5. Admission of a Partner 5 •95

Cis adrnitted as a partner on 1st April, 2021 on the following terms:

(a) Cwill ~ring 1,00,00~ as his capital and 60,000 as his share of goodwill for 1/4th share in the profits.
(b) Plant Is to be appreciated to 1,20,000 and the value of building is to be appreciated by 1Oo/o.
(c) Stock is found overvalued by 4,000.
(d) A provision for doubtful debts is to be created at 5% of sundry debtors.
(e) creditors were unrecorded to the extent of 1,000.
pass the necessary Journal entries, prepare the Revaluation Account and Partners' Capital Accounts, and
shoW the Balance Sheet after the admission of c. (NCERT, Modified)
[Ans.: Gain on Revaluation-~ 27,000; Capital Ncs: A-~ 2,38,000; 8-~ 1,19,ooo;
C-~ 1,00,000; Balance Sheet Total-~ 5,88,000.]
• Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:
60
BALANCE SHEET as at 31st Maf c,
h 2021

Liabilities Assets
2,00,000
Reserve 1,00,000 Cash
1,50,000 1,50,000
J's Capital Other Assets
K's Capital 1,00,000 2,50,000
3,50,000
3,50,000
- Mjoins the firm from 1st April, 2021 for half share in the future profits. He is to pay 1,00,000 as goodwill .
and~ 3!00,000 for capital. Draft the Journal entries and prepare Balance Sheet in each of the following cases:
(a) If M gets his share of profits in the profit~sharing ratio of the old partners.
(b) If M gets his share of profits in equal proportion from the old partners.
(c) If M gets his share of profits in the ratio of 3 : 1 from the old partners, determine the future profit-
sharing ratio of the partners in each case.
[Ans.: Capital Ncs: Case (a): J-~ 2,70,000; K-~ 1,80,000; M-~ 3,00,000.
Case (b): J-~ 2,60,000; K-~ 1,90,Q00; M-~ 3,00,000.
Case (c): J-~ 2,85,000; K-~ 1,65,000; M-~ 3,00,000.
Balance Sheet Total in each case-~ 7,50,000.
New Profit-sharing Ratio: Case (a) 3: 2 : 5; (b) 7.: 3: 10; (c) 9: 11 : 20.]
61. Balance Sheet of Madhu and Vidhi who are sharing profits in the ratio of 2: 3 <!Sat 31st March, 2016 is
given below:
Liabilities Assets
5,20,000 Land and Building 3,00,000 \\
Madhu's Capital
Vidhi's Capital 3,00,000 ·Machinery 2,80,000
General Reserve 30,000 Stock 80,000
Bills Payable 1,50,000 Debtors 3,00,000
Less: Provision 10,000 2,90,000
Bank 50,000
10,00,000 10,00,000

Madhu and Vidhi decided to admit Gayatri as a new partner from 1st April, 2016 and their new profit-sharing
ratio will be 2 : 3 : s. Gayatri brought 4,00,000 as her capital and her share of goodwill premium in cash.
(a) Goodwill of the firm was valued at 3,00,000.
(b) Land and Building was found undervalued by 26,000.
(c) Provision for doubtful debts was to be made equal to 5% of the debtors.
(d) There was a claim of 6,000 on account of workmen compensation.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.
· (Delhi 2017 C)
[Ans.: Gain (Profit) on Revaluation-~ 15,000; Capital Ncs: Madhu-~ 5,98,000;
Vidhi-~ 4, 17,000; Gayatri-~ 4!00,000; Total of Balance Sheet-~ 75,71,000.]
 S.96 Double Entry Book Keeping-case XII
6 2. Shyam and s J
an ay were in partnership business sharll'tg pr6flts and fosses In tt..
- 2 .· 3· Their. Ba1ance Sheet as at 31 st Marc h, 2021 was: 11e ,.
at/o of
liabilities
- f ASStU --~
Sundry Creditors
Capital A/cs:
Shyam
12A3S Cash In Hand
Cash at Sank
--- ' 710
Sanjay 34,0SO Sundry Oebtors lf,925
34,050 6MOO Stock s,soo
tumltu(e 18,0Qo
Building 4Mo
80,S35 r--1Moo
On 1st April, 2021, tc--. 80SJ5
. . .. admitted Shanker into pal'fnesfup for 1/3i'd ~hare In futur! profit§ On the fotlowi~. ---...;

(a) Shanker i$ to bnr_ig in f 30,000 as ht~ capital and f 20,066 a§ g66dWilJ whiC::h ff to r~Maln In the bus~Y.
(b) Stock. and i:urnitt,te are to be reduced by 100/4. ess.
(c} Building is to appreciated by f 15,006.
(d) ProVision 6f S% IS· fo be n'lade on Sundry Debt6r§ for 06ubtlur 6~bts,
(e) Unaccountecf Atcrued Comm,s§IM lntOM~ 6f t ZAOO to b6.Ji,i'W.dld fhr, A debtOt1whose dues 6(
t 4,800 were Wrlff~n 6ff a§ bad debtg1 paid soo/4 In smtftment.
(f> but1tanding Rent Wat f 4-,SOO, . ·
Show Ptc:mt and LO§~ Adjustment Atcount (Rf!Valuatlon Actoattt};Capltal AtcOCJnf§-6f P'arlnt,~ and 6pening
Balaftce Sheet 61 the- n~ 1irrn. . ·
(AM.: Pttmt t1t1d £011 Adju1ttM11t Ale (kevtJfutJfton ActwtttJ- G(!fft (fffMtJf 1.1A85/ Co(il(hfAltJ: Shyam=
'f 41t044i StinJay.- { H1Mf; Slrdltkel- ..f 1(Jl}()tJ; ltlfbttte Sltief ttJtaf='{ 1,41,$20,]
,~. A~S and C at'e partners· sharing profits lfnd 16ssM In in~ raft<; of- 1 : 2 f' 1. Their Balince Shim as a1
31st March 2621 ls as foffoWs:
Uablliti~s t Aa€ti i
Capttar A/c§', L<l1f(f ai'id S'uildlrig §O;DOO
A 00,000 Plifrif iind ~athllfery 4Moo
8 60,000 rurnltur'« !MOO
C 46 f&@ Moel< 1/J/hl
CieditMt 16,000 O!Mot's: ~,000
Sill§ Payable f()i@ sm, f¥1,e1va61e 20,000
B!Ylk' @)00
2 z' 060
tJ jg adMitt~d a§ K r,art:ner 61'1 1§f Apr,11 i&21' Hi§ caplfaf ll t& b~ f 56,oo(),
F6ff6Wlng, adJustrnMt's art! agreed 6l't t:Y, adrYMslon:
(a> our (Jf the Credit:61's, ! 1&,006 I§ due Ur tJ, It will be'' adJugf~d agaltist' his ca,r,lfal.
(b> w~rt1,eM~t'rt' ttpens€1i &f f 1,200 are u, be earned fmwt1rd a~ ffrepaid Eipenses,
(tJ ~pen~ 111 the Proot and (~§ Att6unt' lr,dudes t 2,000 ,:;aid f6r 81s ptirs-6rial ~pens~s. n
(d1 A rim &I Exchange <JI f 4j)O(), Whfth was pr~ousiy' dlSC'1Ut'ltid With the bank, was dl§hol'l'1U(~d 6
11 sf Ma,ch, Wt1 bof enfi'y' was n6t r,assed for dlsh6n6ur,
(e) fravfslon fe;( Doubtful O~s @ 5% /§ f& M t t'iafed against Oebtbrs.
(f> ex~nse§ or, ltwaruatlort M t 2, 100 Is paid by A, ·
l"rer,ar~ ~e-t~ssary Led~ Attoo11t's and 1:Jaft1i'tct! ~hettt tilter l:Ys adrttfsslon, .· . . .- , ftiSOoi
(Ant,: Los, &rt IMvtJ/(/(Jf/&tt 1 6(XJ; {:l(Jffftif§ 1 Ca'(JfttJI Alt.~: A=-f 61,a(JtJ; e-f -9,500.J
· . . .c-:-f 19t960i ~-f 50lJtJ~; ht1lt1rtt1t sheet T~t11-_t 1tc;ount
(Hint~ Wliel"Y a blfl prevl6us,Y d,sc6Urited1Is dlsfloMure~, o,bt6t''s Attollnt' ts deblfet.f and Sank .
,s ti'edit'ed, u,, 6ebt~'s fflflanc~ Is increai~d arid 8atll< balan~e Is deueas~d.J
' '
 Chapters. Admission of a Partner 5.97
on 31st Marchs· 2017, the Balance
·
Sheet of Abhi
r and Divya, who were sharing profits in the ratio of 3 : 1
6'- as fo 11 ow.
was
BALANCE SHEET OF ABHIR
AND DIVYA as on 31st March, 2017
Assets 11
, bilitieS
Lia
2,20,000 Cash at Bank 1,40,000
.. 1 11ors
Crt" , provident Fund 1,00,000 6,50,000
1oyees Debtors
ff1lP t Fluctuation Fund 1,00,000 50,000 6,00,000
~estrnen . Les.s: Provision for Bad Debts
1r I Reserve 1,20,000 Stock 3,00,000
Genera
Investments (Market Value 4,40,000) 5,00,000
capitals:
6,00,000
Abhir
4,00,000 10,00,000
DivYa
15,40,000 15,40,000

-n,ey decided to admit Vibhor on 1st April, 2017 for 1/Sth share.
(a) Vibhor shall bring 80,000 as his share of goodwill premium . .
(b) Stock was overvalued by 20,000.
(cl A debtor whose dues of~ 5,000 were written off as bad debts, paid 4,000 in full settlement.
(d) Two months' salary @ 6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of 1/Sth of the total capital of the new firm .
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.
(Delhi 2018 0
l!
[Ans.: Loss on Revaluation-~ 28,000; Par.tners' Capital Ales: Abhir-'t 7,59,000;
Divya-'t 4,53,000 and Vibhor-~ 3,03,000; Balance Sheet Total-~ 18,47,000.]
65. Xand Y share profits in the ratio of 5 : 3. Their Balance Sheet as at 31st March, 2021 was:

Uabilities Assets
Creditors 15,000 Cash at Bank 5,000
Employees' Provident Fund 10,000 Sundry Debtors 20,000
Workmen Compensation Reserve 5,800 Less: Provision for Doubtful Debts 600 19,400
Capital A/cs:
X 70,000
Stock •
Fixed Assets
25,000
80,000 I
y 31,000 1,01,000 Profit and Loss Ne 2,400
I[
1,31,800 1,31 ,800

They admit z into partnership with 1/8th share in profits on 1st April, 2021. Z brings 't 20,000 as his capital
and 12,000 for goodwill in cash. Z acquires his share from X. Following revaluations are also made:
(a) Employees' Provident Fund liability is to be increased by 5,000.
(b) All Debtors are good.
(c) Stock includes 3,000 for obsolete items. Hence, are to be written off.
(d) Creditors are to be paid 1,000 more.
(e) Fixed Assets are to be revalued at 70,000.
Prepare Journal entries, necessary accounts and new Balance Sheet. Also, calculate new
profit-sharing ratio.
[Ans.: Loss on Revaluation-~ 18,400; Capitals: X-~ 72,625; Y-'t 25,375; Z-~ 20,000;
Balance Sheet Total-~ 1,49,000; New Profit-sharing Ratio-4: 3: 1.

[Hint: Workmen Compensation Reserve will be distributed between the old partners.]
 5.98 Double Entry Book Keeping-CBSE XII

66. Sushi( and Satish are partners in a firm sharing

. pro fits in the ratio of 3 : .2. Their Balance Sheet
31st March, 2021 was as follows: at
as
liabilities

Outstanding Rent
Creditors
'
13,000
Assets

Cash
20,000 Sundry Debtors . 10,00Q
Workmen Compensation Reserve so,ooo
5,600 Less: Provision for Doubtful Debts
Capital A/cs: Sushil 4,ooo
50,000 Stock 76,0llQ I
Satish
60,000 1,10,000 Profit and Loss A/c 20,000
Machinery 4,00Q
1,48,600 38,60Q
1,48,60Q
On 1st April, 2021, they admitted sa~ir as a partner for 1/6th share on the following terms:
(i) Samir brings in 40,000 as his share of Capital but he is unable to b_ring any amount for Goodwill.
(ii) Claim on account of Workmen Compensation is~ 3,000.
(iii) To write off Bad Debts of~ 6,000.
(iv) Creditors are to be paid 2,000 more.

(v) There being a claim against the firm for damages, liabilities to the extent on 2,000 should be created.
(vi) Outstanding rent be brought down to , 11,200.

(vii) Goodwill is valued at 1½ years' purchase of the average profit of last 3 years, less , 12,000. Profits for
the last 3 years amounted to 10,000; , 20,000 and , 30,000. ·
Pass Journal entries, prepare Partners' Capital A.ccounts and opening Balance Sheet.
[Ans.: Loss on Revaluation-~ 4,200; Partners' Capital Accounts: Sushi/-~ 48,440; Satish-r 58,960, and
Samir-~ 40,000; Samir's Current Ale (For Goodwill)-~ 3,000. .Total of Balance Sheet-, 1,85,600.]
6 7. Rajesh and Ravi are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet at 31st March, 2021 stood as:
BALANCE SHEEr as at 31st March, 2021
Liabilities

Creditors
Outstanding Rent
'
38,500
Assets

Cash
{

4,000 2,000
Capital A/cs: . Stock
15,000
Rajesh . . Prepaid Insurance
·29,000 1,500
Ravi Debtors
15,000 44,000 9,400
Less: Provision for DoubtfuL Debts 9,000
400
Machinery
19,000
Building
35,000
Furniture
s,OOo
86,500
86,500
Raman os admitted as a new partnerintroduang a capital on 16,00Q, The new profit-sharing ratio is decided
as 5 : 3 : 2. Ra"'."n is unable to bring 1n any cash for goodwill. So, it is decided lo value the gqodwill on ti<
basis of Raman, share 1n the Profits and the capital contributed by him. Following revaluations are mad•
(a) Stock to decrease by 5%;
(b) Provision for Doubtful Debts is to be t 500;
(c) Furniture to decrease by 10%;
(d) Building is valued at t 40,000.

Show necessary Ledger Accounts and Balance Sheet of n fi

. . ew rm. . 2s;
· [Ans.: Gam_ (Profit) on Reva/uation-f 3,650; Capital A/cs: Rajesh-t ~42~1
8
7 95
. Rav,-t B,o ; Raman-t 16,000; Balance Sheet Tota/-f l,O'
 Chapter 5. Admission of a Partner 5.99
(i) Calculation of Hidden Goodwill:
A. Total Capital of the firm on the b asIs
• of Raman's t
Capital 16,000 x 10/2) 80,000

B. Whereas, Adjusted
,,, Capital of RaJ·e sh (excluding
. goodwill)
=, 29,000 + 2 190 (G · (P
Adjusted Ca •t ' f _am rofit) on Revaluation)
31,190

pi a1 O Ravi (excluding goodwill)

16,460
= l S,000 + 1A 6 0 (Gain (Profit) on Revaluation)
16,000
Raman's Capital ·
63,650

~- Val,ue of Hidden Goodwill (A - 8) = 80,000 _ 63 ,650 = 16,350.

(ii) Rama_n s Current ~le ~ill be debited by his share of goodwill, i.e., t 3,270 and Capital A/cs
of RaJesh and Ravi will be credited in the'ir sacn'fi cmg
· ra t·10, ,.e.,
· equa II y. ]
. on 31st March, 2019, the Balance Sheet of A and B, who were sharing profits in the ratio of 3 : 2 was
68 follows· ·
as
Assets
Liabilities 20,000
30,000 Cash at Bank
creditors Debtors 85,000
investment Fluctuation Fund 12,000 80,000
Less: Provision for Bad Debts 5,000
25,000 1,30,000
General Reserve
Stock 60,000
Capitals A/cs: Investments
1,60,000 77,000
A 1,40,000 3,00,000 Furniture
B 3,67,000
3,67,000

On ist April, 2019, they decided to admWC as a new partner for 1/Sth share in the profits on the
following terms:
(i) C brought t 1,00,000 as his capital and 50,000 as his share of premium for goodwill.
(ii) Outstanding salaries of t 2,000 be provided for.
(iii) Th~ market value of investments was 50,000.
(iv) A debtor whose dues of 18,000 were written off as bad debts paid 12,000 in full settlement.

Prepare Revaluation Account, Partners'. Capital Accounts and the Balance Sheet of the new firm. (CBSE 2020 q
[Ans.: Gain(Profit) on Revaluation-~ 10,000; Partners' Capital A/cs: A-t 2, 12,200;
B-~ 1,74,800; C-t 1,00,000; Balance Sheet Total-~ 5, 19,000.]
69, Divya, Yasmin and Fatima are partners in a firm, sharing profits and losses in 11 : 7 : 2 respectively. The
Balance Sheet of the firm on 31st March, 2018 was as follows:
BALANCE SHEET as at 31st March, 2018
Assets
Liabilities
- . Factory Building 7,35,000
70,000
Sundry Creditors . Plant and Machinery 1,80,000
Public Deposits · 1,19,000
Furniture 2,60,000
Reserve Fund 90,000
Stock 1,45,000
10,000
Outstanding Expenses Debtors 1,50,000
Capital Ncs: · (30,000) 1,20,000
. Less: Provision
Divya 5,10,000 1,59,000
Cash at Bank
Yasmin 3,00,000
Fatima 5,00,000 13,10,000 15,99,000
15,99,000

On 1st April, 20l S, Aditya is admitted as a partner for ~ne-fifth share •~ the profits with a capital of
\ 4,50,000 and necessary amount for his share of goodwill on _the follo~mg terms: .
( l Furniture of ,4o,ooo were to be taken over Divya, Yasmin and Fatima equally.
2
5.100 Double Entry Book Keeping-CBSE XII . count. .
. ks to be taken into ac
(b) A creditor of t 7,000 not recorded m boo . , p .. urchase of average profits of last two Years ,~
. I
(c) Goodwill of the firm ,s to be va ue d at 2.5 years · 11e
profit of the last three years were: 2017 1s-f 6,00,000. ,
l6
2015 - - f 600000· 2O16-17-f 2,O0,000; - 00 as fresh capital.
, , , . I brought in ' 500 ,
(d) At time of Aditya's admission. Yasmin a so es outstanding were brought down to~ 00o
· 200 000 and expens h . 9,
(e) Plant and Machinery is re-valued to ' , ' . d h Balance Sheet oft e r~constItuted firrn ·
,c ·tal Accounts an t e
Prepare Revaluation Account, Partners api (CBSE Sample Pape,
·

.
, c ·t , ,,. ' o·
'{ 14 000· Partners apl .a rvCS: 1vya-t 5,97 20 .
20iai
[Ans.: Gain on Revaluation:-. ' 4' 50
400· nd Ad1tya-, , ' '
ooo·
Balance Sheet Total-t 20 '
,79,00O·
°,
Yasmin-f 3,76,400; Fatima-{ 4,50, 'a . , G odwill-f 10,00,000; Cash at Bank-t 8,59 '
Value of F,rms o ,0001.
. divided as follows: 1/2 to A, 1/3 to B and 1/6 earned to
70. A and B are partners in a firm. Net profit of th e ~rm is h"ich date the Balance Sheet of the firm Was·
a Reserve. They admit C as a partner on 1st Apnl, 2021 on w ' ·

Liabilities - ~ Assets
I
Capital A/cs: Buflaing so,ooo
A 50,000 Plant and Machinery 30,000
8 40,000 90,000 Stock 18,00Q
Reserve 10,000 Debtors 22,000
Creditors 20,000 Bank 5,000
Outstanding Expenses 5,000
1;25,000 1,25,000

Following are the required adjustments on admission of C:

(a) C brings in t 25,000 towards his capital. ,
(b) C also brings int 5,000 for 1/Sth share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability oft 4,000, which has been decided by the court at '{ 3,200.
(e) In regard to the Debtors, the following Debts· proved -Bad or Doubtful-
'{ 2,000 due from X-bad to the full extent;
,, , ' C

'{ 4,000 due from Y-insolvent, estate expected to pay only ·so%.
You are required to prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.
[Ans.: Loss on Revaluation-'{ 1,200; Partners' Capital A/cs: A-~ 58,280;
B-'{ 45,520; C-'{ 25,000; Balance Sheet Total-{ 1,53,000.]
[Hint: Value of Stock: t 20,000 (i.e., '{ 18,000 x 100/90); Debtors: '{ 18,000; Creditors '{ 19,200.]
71. Following is the Baiance Sheet of the firm, Ashirvad, owned by A, B and c who share profits and losses
of the business in the ratio of 3 : 2 : 1: . •

Liabilities
Capital A/cs:
BALANCE SHEET as at 31st March, 202l

Assets {
-
A
Furniture 95,000
1,20,000
8 Business Premises 2,os,000
1,20,000
C Stock-in°Trade 40,000
1,20,000 3,60,000
Sundry Creditors Debtors 28,ooo
20,000 . .Cash at Bank ,s,ooo
Outstanding Salaries and Wages
7,200 Cash in Hand 4,200
3,87,200
'
On 1st April, 2021, the admit o a -~
Y s a partner on the foll .
(a) D will _bring ln f 1,20,000 as his capital and also t 3 owing conditions: . of the
share in the futur~ profits/losses of tbe firm. . 0,000 as goodwill premium for a quarter
 Chapters. Admission of a Partner 5 •1 Ol

(b) Values of the fixed assets of the firm will be increased by 10% before the admission of D.
(c) Mohan, an old customer whose account was written off as bad debts, has promised to pay f 3,000
· - In full settlement of his dues, .
(d) future profits and losses of the firm will be shared equally by all the partners. .
p_as$ ttw necessary Journal entries and prepare Revaluation Account, Partners' Capital Accounts and
opening Balance Sheet of the new firm.
[Ans.: Gain (Profit) on Revaluatlon-'f 30,000; Capital A/cs: A-f 1,65,000; B-'f 7,40,000;
C-'f 1, 15,000; D-f 1,20,000; Balance Sheet Total-f 5,67,200.]
Note: There will be no entry for the promise made by Mohan, since it is an event and not a transaction.
There is another view, t 3,000 is to be considered as Bad Debts Recovered. In this situation result
will be as follows:
Gain (Profit) on Revaluation-'{ 33,000; Capital A/cs: A-f 1,66,500; B-t 1,41,000; C-f 1, 15,500
O's Capital-f 1,20,000; Balance Sheet Total-t s,70,200.
[Hint: Change in the profit-sharing ratio will result in loss of 6124th to A and 2124th to 8; gain of 2124th
.i
to C and 1/4th to D. Hence, the entry for adjustment of goodwill premium will be:
C's Capital Ne ... Dr. t 10,000
Premium for Goodwill A/c ...Dr. t 30,000
To A's Capital Ne t 30,000

To B's Capital Ne
t 10,000.]

72, Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March,
2021, their Balance Sheet was:
f
Liabilities t Assets
Cash in Hand 1,200
Sundry Creditors 16,000
61,000 Cash at Bank 2,800
Public Deposits
6,000 Stock 32,000
Bank Overdraft
2,000 Prepaid Insurance 1,000
Outstanding Liabilities
Sundry Debtors 28,800
Capital Ncs:
48,000 Less: Provision for Doubtful Debts 800 28,000
Deepika
88,000 Plant and Machinery 48,000 I
40,000
Rajshree
Land and Building ' 50,000
I
Furniture 10,000
1,73,000 11
1,73,000

On 1st April, 2021, the partners admit Anshu as a partner on the following terms:
(a) New profit-sharing ratio of Deepika, Rajshree and Anshu will be 5 : 3 : 2.
(b) Anshu shall bring in f 32,000 as his capital.
(c) Anshu is unable to bring his share of goodwill. Partners, therefore, decide to calculate the goodwill on the
basis of Anshu's share in the profits and the capital contribution made by her to the firm.
(d) Plant and Machinery is to be valued at f 60,000, Stock at t 40,000 and the Provision for Doubtful
Debts is to be maintained at t 4,000. Value of Land and Building has appreciated by 20%. Furniture
has been depreciated by 10%.
(e) There is an additional liability off 8,000 being outstanding salary payable to employees of the firm,
ti This liability is not included in the outstanding liabilities, stated in the above Balance·Sheet. Partners
decide to show this liability in the books of account of the reconstituted firm.
i~ Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of Deepika, Rajshree
and Anshu.

f
 5. 102 Double Entry Book Keeping-CBSE XII
[Ans.: Hidden Goodwi/1-f 22,200; Gain (Profit) on Revaluation-'{ 17,800; Partn ,
Al/\
a_,
Deepiko-f 60,900; Rajshree-'t 49,340; Anshu-f 32,000; Anshu's Current Capita/ A.;,
4
· Bank Balance-f 28,800; Balance Sheet Tot -, •440 (Or,J• c.i:
22
[Hints: 1. Adjustment of Goodwill: · %0.j
Dr. Anshu's Current A/c by f 4,440;
Cr. Depika's Capital A/c by f 2,220 and f!.ajshree's Capital A/c by f 2,220.
2. Bank Balance: f 2,800 + f 32,000 - f 6,000 (Bank Overdraft) = f 28,800.)
7 3, Atul and Amit are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st M
· is as follows: · arch, 202 1

Liabilities f Assets --:---=--

Capital A/cs: Plant and Machinery -~
1,80,0Q()
Atul ' Furniture
1,00,000 30,00()
Amit 1,00,000 2,00,000 Computer
10,00()
Current A/cs-. Stock 40,00()
Atul 70,000 Debtors 50,00()
Amit 50,000 1,20,000 Bills Receivable 10,00()
Creditors 40,000 Cash 10,00()
Bills Payable 10,000 Bank 40,0{)()

-
-
3,70,000 3,70,000

Abhay Is admitted as a partner for 114th share on 1st April, 2021 on the following terms:
(a) Abhay is to bring i 65,000 as capital after adjusting amount due to him included in creditors and
his share of Goodwill.
(b) f 10,000 included in creditors is payable to Abhay which is to be transferred to his Capital Account.
(c) Furniture is to reduced by f 3,000 and Plant and Machinery is to be increased to f 1,98,000.
(d) Stock is overvalued by f 4,000.
(e) A Provision for Doubtful Debts is to be created@ 5%.
(f) Goodwill is to be valued at 2 years' purchase of average profit for four years. Profits of four years
ended 31st March, were as follows: 2021-f 25,000, 2020-f 10,000, 2019-f 2,500, and 2018-
f 2,500.
Pass the Journal entries for the above arrangement.
[Ans.: Gair, on Revaluation-'t 8,500; Value of Goodwill-{ 20,0C-O;
· · Share of Abhay-'t 5,000; Sacrificing Ratio-3 :2.]
74. Sunaina and Tamanna are partners in a firm sharing profits and _losses in the ratio of 3 : 2. Their Balance
Sheet as at 31st March, 2020 stood as follows: -
{
Liabilities
f Assets
1,20,000
Plant and Machinery
Capital A/cs: 1,40,000
60,000 Land and Building
. Sunaina
80,000 1,40,000 Debtors 1,90,000
Tamanna 1,so,000
40,000
Current A/cs:
Less: Provision for Doubtful Debts
- 40,000
10,000 Stock 30,000
Sunaina
30,000 40,000 Cash 20,000
Tamanna
1,20,000 Goodwill
General Reserve
Workmen Compensation Reserve 50,000
Creditors
1,50,000 1---rooooo
5,00,000
-~