Reconstitution of a Partnership Firm - Admission of a Partner
Class 12 · Accountancy · 64 Questions
A and B are partners sharing profits in the ratio of 3:1. They admit C for 1/4 share in the future profits. The new profit sharing ratio will be:
X and Y share profits in the ratio of 3:2. Z was admitted as a partner who sets 1/5 share. New profit sharing ratio, if Z acquires 3/20 from X and 1/20 from Y would be:
A and B share profits and losses in the ratio of 3:1, C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is:
At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred to:
Asha and Nisha are partner’s sharing profit in the ratio of 2:1. Asha’s son Ashish was admitted for 1/4 share of which 1/8 was gifted by Asha to her son. The remaining was contributed by Nisha. Goodwill of the firm in valued at Rs. 40,000. How much of the goodwill will be credited to the old partner’s capital account.
A, B and C are partner’s in a firm. If D is admitted as a new partner:
On the admission of a new partner increase in the value of assets is debited to:
At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital account of:
A firm’s profits for the last three years are Rs. 5,00,000; Rs. 4,00,000 and Rs. 6,00,000. Calculate value of firm’s goodwill on the basis of four years’ purchase of the average profits for the last three years.
A firm’s profits during 2013, 2014, 2015 and 2016 were Rs. 16,000; Rs. 20,000; Rs. 24,000 and Rs. 32,000 respectively. The firm has capital investment of Rs. 1,00,000. A fair rate of return on investment is 18% p.a. Compute goodwill based on three years’ purchase of the average super profits for the last four years.
Based on the data given in the above question, calculate goodwill by capitalisation of super profits method. Will the amount of goodwill be different if it is computed by capitalisation of average profits? Confirm your answer by numerical verification.
Giri and Shanta are partners in a firm sharing profits equally. They admit Kachroo into partnership who, in addition to capital, brings Rs. 20,000 as goodwill for 1/5th share of profits in the firm. What shall be journal entries if: (a) no goodwill appears in the books of the firm. (b) goodwill appears in the books of the firm at Rs. 40,000.
Aslam, Jackab, Hari are equal partners with capitals of Rs. 1,500, Rs. 1,750 and Rs. 2,000 respectively. They agree to admit Satnam into equal partnership upon payment in cash of Rs. 1,500 for one-fourth share of the goodwill and Rs. 1,800 as his capital, both sums to remain in the business. The liabilities of the old firm amount Rs. 3,000 and the assets, apart from cash, consist of Motors Rs. 1,200, Furniture Rs. 400, Stock Rs. 2,650, Debtors of Rs. 3,780. The Motors and Furniture were revalued at Rs. 950 and Rs. 380 respectively, and the depreciation written-off. Ascertain cash in hand and prepare the balance sheet of the firm after Satnam’s admission.
Benu and Sunil are partners sharing profits in the ratio of 3:2 on April 1, 2017. Ina was admitted for 1/4 share who paid Rs. 2,00,000 as capital and Rs. 1,00,000 for premium for goodwill in cash. At the time of admission, general reserve amounting to Rs. 1,20,000 and profit and loss account amounting to Rs. 60,000 appeared on the liability side of the balance sheet. Required: Record necessary journal entries to record the above transactions.
Ashoo and Rahul are partners sharing profits in the ratio of 5:3. Gaurav was admitted for 1/5 share and was asked to contribute proportionate capital and Rs. 4,000 for premium (goodwill). The Capitals of Ashoo and Rahul, after all adjustments relating to revaluation, goodwill etc., worked out to be Rs. 45,000 and Rs. 35,000 respectively. Required: Calculate New Profit sharing ratio, capital to be brought in by Gaurav and record necessary journal entries for the same.
Identify various matters that need adjustments at the time of admission of a new partner.
Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
What is sacrificing ratio? Why is it calculated?
On what occasions sacrificing ratio is used?
If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?