KENDRIYA VIDYALAYA, BARRACKPORE (ARMY)

SUB: ACCOUNTANCY (055)

CLASS: XII COM
Admission of a New Partner
1. Following in Balance Sheet of A and B who share profits in the ratio of 3:2. 8
Balance Sheet of A and B as on April 1, 2007.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 20,000 Cash in hand 3,000
Capital Debtors 12,000
A 30,000 Stock 15,000
B 20,000 50,000 Furniture 10,000
Plant and Machinery 30,000

70,000 70,000

Additional Information
On that date C is admitted into the partnership on the following terms:
a) C is to bring in Rs. 15,000 as capital and Rs. 5,000 as premium for goodwill
for 1/6 share.
b) The value of stock is reduced by 10% while plant and machinery is
appreciated by 10%.
c) Furniture is revalued at Rs. 9,000.
d) A provision for doubtful debts is to be created on sundry debtors at 5% and
Rs. 200 is to be provided for an electricity bill.
e) Investment worth Rs. 1,000 (not mentioned in the balance sheet) is to be
taken into account.
f) A creditor of Rs. 100 is not likely to claim his money and is to be written off.
Record journal entries and prepare revaluation account and capital
account of partners.
(Ans : Gain of Revaluation Rs. 800. Balance of Capita A. Rs.33,480, B
Rs.22,320., C Rs.15,000)
2. Given below is the Balance Sheet of A and B, who are carrying on Partnership 8
business as on March 31,2007. A and B share profits in the ratio of 2:1.
Balance Sheet of A and B as at March 31, 2007
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 10,000 Cast at bank 40,000
Outstanding expenses 2,000 Debtors 60,000
Capital Stock 40,000
A 1,80,000 Plant and Machinery 1,00,000
B 1,50,000 3,30,000 Cash in hand 10,000
Sundry creditors 58,000 Building 1,50,000

4,00,000 4,00,000

Additional Information
C is admitted as a partner on the date of the balance sheet on the Following
terms:
a) C will bring in Rs 1,00,000 as his capital and Rs 60,000 as his share of

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 goodwill for ¼ share in profits.
b) Plant is to be appreciated to Rs 1,20,000 and the value of buildings is to be
appreciated by 10%.
c) Stock is found overvalued by Rs 4,000.
d) A provision for doubtful debts is to be created at 5% of debtors.
e) Creditors were unrecorded to the extent of Rs 1,000.
Record revaluation Account, partners’ capital accounts, and the Balance
Sheet of the constituted firm after admission of the new partner.
(Ans : Gain of Revaluation Rs. 27,000. Balance Sheet Rs. 5,88,000)
3. A and B are partners in a firm sharing profits in the ratio 2:1. C is admitted into 8
the firm with 1/4 share in profits. He will bring in Rs. 30,000 as capital and
capitals of A and B are to be adjusted in the profit sharing ratio. The Balance
Sheet of A and B as on March 31, 2007 (before C’s admission) was as under:
Balance Sheet of A and B as at March 31,2007.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 4,000 Cash in hand 2,000
General reserve 6,000 Cash at Bank 10,000
Sundry creditors 8,000 Debtors 8,000
Capital Stock 10,000
A 50,000 Building 40,000
B 32,000 82,000 Plant and Machinery 25,000
Furniture 5,000
1,00,000 1,00,000
Other terms of agreement are as under:
a) C will bring in Rs. 12,000 as his share of goodwill.
b) Building was valued at Rs. 45,000 and Machinery at Rs. 23,000.
c) A provision for bad debts is to be created @ 6% on debtors.
d) The capital accounts of A and B are to be adjusted by opening current
accounts.
Record necessary journal entries, show necessary ledger accounts and
Prepare fund’s Balance Sheet after C’s admission.
(Ans : Gain of Revaluation Rs. 2,520. Balance Sheet Rs. 1,44,520)
4. The Balance Sheet of W and R who shared profits in the ratio of 3 : 2 was as 8
follows on Jan. 01, 2007.
Balance Sheet of W and R as on Jan. 01, 2007
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 20,000 Cash in hand 5,000
Capital Debtors 20,000
W 40,000 Less:- Provision 700 19,300
R 30,000 70,000 Stock 25,000
Patents 5,700
Plant and Machinery 35,000

90,000 90,000
On this date B was admitted as a partner on the following conditions:
a) He was to get 4/15 share of profit.
b) He had to bring in Rs 30,000 as his capital.
c) He would pay cash for goodwill which would be based on 2 ½ years
d) purchase of the profits of the past four years.
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 e) W and R would withdraw half the amount of goodwill premium brought by
B.
f) The assets would be revalued as: Sundry Debtors at book value less a
provision of 5%; Stock at Rs 20,000; Plant and Machinery at Rs
40,000; and Patents at Rs 12,000.
g) Liabilities were valued at Rs 23,000, one bill for goods purchased
having been omitted from books.
h) Profit for the past four years were: 2003 -15,000; 2005- 14,000; 2004-
20,000; 2006- 17,000;
Give necessary journal entries and ledger accounts to record the above and
prepare the Balance Sheet after B’s admission.
(Ans : Gain of Revaluation Rs. 3,000. Balance Sheet Rs. 1,31,500)
5. Given below is the Balance Sheet of A and B, who are carrying on partnership 8
business on 31.12.2006. A and B share profits and losses in the ratio of 2:1.
Balance Sheet of A and B as on December 31, 2006
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 58,000 Cash in hand 10,000
Bills Payable 10,000 Cash at Bank 40,000
Capital Debtors 60,000
A 1,00,000 Plant 1,00,000
B 1,80,000 3,30,000 Buildings 1,50,000
Outstanding Expenses 2,000 Stock 40,000
4,00,000 4,00,000

C is admitted as a partner on the date of the balance sheet on the following terms:
a) C will bring in Rs. 1,00,000 as his capital and Rs. 60,000 as his share of
goodwill for 1/4 share in the profits.
b) Plant is to be appreciated to Rs. 1,20,000 and the value of buildings is to
be appreciated by 10%.
c) Stock is found over valued by Rs. 4,000.
d) A provision for bad and doubtful debts is to be created at 5% of debtors.
e) Creditors were unrecorded to the extent of Rs. 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.
(Ans : Gain of Revaluation Rs. 27,000. Balance Sheet Rs. 5,88,000)
6. A and B share profits in the proportions of 3/4 and 1/4 . Their Balance Sheet on 8
Dec. 31, 2006 was as follows:
Balance Sheet of A and B as on December 31, 2006
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 41,500 Cash at Bank 26,500
Reserve fund 4,000 Bills Receivable 3,000
Capital Accounts Debtors 16,000
A 30,000 Stock 20,000
B 16,000 46,000 Fixtures 1,000
Land & Building 25,000

91,500 91,500

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 Additional Information
On Jan. 1,2007, C was admitted into partnership on the following terms:
a) That C pays Rs. 10,000 as his capital.
b) That C pays Rs. 5,000 for goodwill. Half of this sum is to be withdrawn by
A and B.
c) That stock and fixtures be reduced by 10% and a 5%, provision for
Doubtful debts be created on Sundry Debtors and Bills Receivable.
d) That the value of land and buildings be appreciated by 20%.
e) There being a claim against the firm for damages, a liability to the
extent of Rs. 1,000 should be created.
f) An item of Rs. 650 included in sundry creditors is not likely to be
claimed and hence should be written back.
Record the above transactions (journal entries) in the books of the firm
Assuming that the profit sharing ratio between A and B has not changed. Prepare
the new Balance Sheet on the admission of C.
(Ans : Gain on Revaluation Rs. 1600. Balance Sheet Total Rs. 1,05,950)
7. The following was the Balance Sheet of Arun, Bablu and Chetan sharing 8
Profits and losses in the ratio of 6/14: 5/14: 3/14respectively

Liabilities Amount Assets Amount

(Rs.) (Rs.)
Creditors 9,000 Land and Buildings 24,000
Bills Payable 3,000 Furniture 3,500
Capital Accounts Stock 14,000
Arun 19,000 Debtors 12,600
Bablu 16,000 Cash 900
Chetan 8,000 43,000
55,000 55,000

Additional Information:-
They agreed to take Deepak into partnership and give him a share of 1/8 on
the following terms:
a) That Deepak should bring in Rs. 4,200 as goodwill and Rs. 7,000 as his
Capital;
b) That furniture be depreciated by 12%;
c) That stock be depreciated by 10%
d) That a Reserve of 5% be created for doubtful debts:
e) that the value of land and buildings having appreciated be brought upto Rs.
31,000 ;
f) That after making the adjustments the capital accounts of the old partners
(who continue to share in the same proportion as before) be adjusted on the
basis of the proportion of Deepak’s Capital to his share in the business, i.e.,
actual cash to be paid off to, or brought in by the old partners as the case
may be.
Prepare Cash Account, Profit and Loss Adjustment Account (Revaluation
Account) and the Opening Balance Sheet of the new firm.
(Ans : Gain on revaluation Rs. 4,550. Balance Sheet Total Rs. 68,000)
8. Azad and Babli are partners in a firm sharing profits and losses in the ratio of 8
2:1.Chintan is admitted into the firm with 1/4 share in profits. Chintan will bring
in Rs.30,000 as his capital and the capitals of Azad and Babli are to be adjusted
in the profi sharing ratio. The Balance Sheet of Azad and Babli as on December
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 31, 2006 (before Chintan’s admission) was as follows:
Balance Sheet of A and B as on 31.12.2006
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Creditors 8,000 Cash in hand 2,000
Bills payable 4,000 Cash at bank 10,000
General reserve 6,000 Sundry debtors 8,000
Capital accounts Stock 10,000
Azad 50,000 Furniture 5,000
Babli 32,000 82,000 Machinery 25,000
Buildings 40,000
1,00,000 1,00,000
Additional Information:-
It was agreed that:
a) Chintan will bring in Rs. 12,000 as his share of goodwill premium.
b) Buildings were valued at Rs. 45,000 and Machinery at Rs. 23,000.
c) A provision for doubtful debts is to be created @ 6% on debtors.
d) The capital accounts of Azad and Babli are to be adjusted by opening
current accounts.
Record necessary journal entries, show necessary ledger accounts and prepare the
Balance Sheet after admission.
(Ans : Gain on Revaluation Rs. 2,520. Balance Sheet Rs. 1,44,520).
9. Ashish and Dutta were partners in a firm sharing profits in 3:2 ratio. On Jan. 01, 8
2007 they admitted Vimal for 1/5 share in the profits. The Balance Sheet of
Ashish and Dutta as on Jan. 01, 2007 was as follows:

Balance Sheet of A and B as on 1.1.2007

Liabilities Amount Assets Amount
(Rs.) (Rs.)
Creditors 15,000 Land & Building 35,000
Bills Payable 10,000 Plant 45,000
Capital Debtors 22,000
Ashish 80,000 Less : Provision 2,000 20,000
Dutta’s 35,000 1,15,000 Stock 35,000
Cash 5,000
1,40,000 1,40,000
It was agreed that:
a) The value of Land and Building be increased by Rs. 15,000.
b) The value of plant be increased by 10,000.
c) Goodwill of the firm be valued at Rs. 20,000.
d) Vimal to bring in capital to the extent of 1/5th of the total capital of the
new firm.
Record the necessary journal entries and prepare the Balance Sheet of the firm
after Vimal’s admission.
(Ans : Gain on Revaluation Rs. 25,000. Balance Sheet Total Rs. 2,25,000).
10. Om, Ram and Shanti were partners in a firm sharing profits in the ratio of 3:2:1. 8
On 1st April, 2014 their Balance Sheet was as follows:-

Liabilities Amount Assets Amount

(Rs.) (Rs.)
Capital Accounts:- Land & Building 3,64,000
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 Om 3,58,000 Plant & Machinery 2,95,000
Ram 3,00,000 Furniture 2,33,000
Shanti 2,62,000 9,20,000 Bills Receivable 38,000
Sundry Debtors 90,000
General Reserve 48,000 Stock 1,11,000
Creditors 1,60,000 Bank 87,000
Bills Payable 90,000

12,18,000 12,18,000

On the above date Hanuman was admitted on the following terms:-

a) He will bring Rs. 1,00,000 for his capital and will get 1/10the share in
the profits.
b) He will bring necessary cash for his share of goodwill premium. The
goodwill of the firm was valued at Rs. 3,00,000.
c) A liability of Rs. 18,000 will be created against bills receivables
discounted.
d) The value of stock and furniture will be reduced by 20%.
e) The value of Land and Building will be increased by 10%.
f) Capital account of the partners will be adjusted on the basis of
Hanuman’s capital in their profits sharing ratio by opening current
account.
Prepare Revaluation Account and Partners’ Capital Accounts. (CBSE-2015)
11. L, M and N were partners in a firm sharing profits in the ratio of 3:2:1. Their 8
Balance Sheet on 31.3.2015 was as follows.
Balance sheet of L, M and N as on 31.3.2015

Liabilities Amount Assets Amount

(Rs.) (Rs.)
Capital Accounts:- Machinery 70,000
L 1,20,000 Furniture 20,000
M 80,000 2,40,000 Investment 60,000
N 40,000 Sundry Debtors 46,000
General Reserve 42,000 Stock 2,20,000
Creditors 1,68,000 Bank 34,000

4,50,000 4,50,000

On the above date O was admitted as a new partner and it was decided that:
a) The profit sharing ratio between L,M,N and O will be 2:2:1:1.
b) Goodwill of the firm was valued at Rs. 1,80,000 and O brought his share of
goodwill premium in cash.
c) The market value of investments was Rs.36,000.
d) Machinery will be reduced to Rs. 58,000.
e) A creditor of Rs. 6,000 was not likely to claim the amount and hence was to
written off.
f) O will bring proportionate capital so as to give him 1/6th the share in the
profits of the firm.
Prepare Revaluation Account, Partner’s Capital accounts and the Balance sheet
of the New Firm. (CBSE-2016)
12. C and D are partner in a firm sharing profits in the ratio of 4:1. On 31.3.2016, 8

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 their Balance Sheet was as follows:-

Balance Sheet of C and D as on 31.3.2016

Liabilities Amount Assets Amount
(Rs.) (Rs.)
Capital Accounts:- Plant & Machinery 80,000
C 1,20,000 Furniture 80,000
D 80,000 2,00,000 Sundry Debtors 36,000
Stock 40,000
General Reserve 10,000 Cash 24,000
Sundry Creditors 40,000
Provision for bad debts 4,000
Outstanding Salary 6,000

2,60,000 2,60,000
On the above date, E was admitted for 1/4 share in the profits on the
th

following terms:
a) E will bring Rs. 1,00,000 as his capital and Rs. 20,000 for his share of
goodwill premium, half of which will be withdrawn by C and D.
b) Debtors Rs.2,000 will be written off as bad debts and as provision of 4%
will be created on debtors for bad and doubtful debts.
c) Stock will be reduced by Rs. 2,000, furniture will be depreciated by Rs.
4,000 and 10% depreciation will be charged on plant and machinery.
d) Investment of Rs. 7,000 not shown in the balance Sheet will be taken
into account.
e) There was an outstanding repairs bill of Rs. 2,300 which will be records
in the books.
Pass necessary journal entries for the above transactions in the book of the firm
on E’s admission. (CBSE-2017)
13. Chander and Damini were partners in a firm sharing profits and losses equally. 8
On 31st March, 2017 their Balance sheet was follows:-
Balance Sheet of Chander and Damini as on 31.3.2017
Liabilities Amt (Rs.) Assets Amt (Rs.)
Capital Accounts:- Bills Receivables 45,000
Chander 2,50,000 Furniture 1,10,000
Damini 2,16,000 4,66,000 Sundry Debtors 75,000
Cash at Bank 30,000
Sundry Creditors 1,04,000 Land &Building 3,10,000
5,70,000 5,70,000
On 1.04.2017 they admitted Elina as n new partner for 1/3rd share in the profits
in the following conditions.
a) Elina will bring Rs. 3,00,000 as her capital and Rs. 50,000 as her share of
goodwill premium, half of which will be withdrawn by Chander and Damini.
b) Debtors to the extent of Rs. 5,000 were unrecorded.
c) Furniture will be reduced by 10% and 5% provision for bad doubtful debts
will be created on bills receivables and debtors.
d) Value of land and Building will be appreciated by 20%.
e) There being a claim against the firm for damages, a liability to the extent of
Rs. 8,000 will be created by the same.
Prepare Revaluation Account and Partners’ Capital account. (CBSE- 2018)

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14. 5. A and B are partner in a firm sharing profits in the ratio of 3:2. On 8
31.3.2018, their Balance Sheet was as follows:-
Balance Sheet of A and B as on 31.3.2018
Liabilities Amt Assets Amt
Capital Accounts:- Plant & Machinery 76,000
A 1,04,000 Furniture 20,000
B 52,000 1,56,000 Sundry Debtors 37,600
Less:- Provision for
Employees Provident Fund 16,000 Doubtful Bad 1,600 36,000
Sundry Creditors 1,54,000 Stock 60,000
Workmen Compensation Fund Cash 8,000
Contingency Reserve 10,000 Prepaid Insurance 6,000
10,000 Building 1,40,000
3,46,000 3,46,000
C was admitted as a new partner and brought Rs. 64,000 as Capital and Rs.
15,000 for his share of goodwill premium. The new profit sharing ratio was
5:3:2.
On C’s admission the following was agreed upon:-
a) Stock was to be depreciated by 5%.
b) Provision for doubtful debts was to be made at Rs. 2,000.
c) Furniture was to be depreciated by 10%.
d) Building was valued at Rs. 1,60,000.
e) Capital of A and B were to be adjusted on the basis of C’s capital by
bringing or paying of cash as the case may be.
Prepare Revaluation Account, Partner’s Capital accounts and the Balance sheet
of the Reconstituted Firm. (CBSE- 2019)