Admission of a Partner Test

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Admission of a Partner Test - 6

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Weekly Quiz Competition

Question 1
1 / -0

DK and SK are partners sharing profits in the ratio of 4:1. They admit PK as a new partner for 1/4th share in future profits, which he wholly acquired form DK. Find out new ratio.

A
11:4:7

B
11:3:5

C
11:5:2

D
11:4:5

Solution

Calculation of new ratio:
PK’s share = 1/4
DK’s new share will be = 4/5 – 1/4 = 11/20
SK’s new share = 1/5
New profit sharing ratio = 11:4:5
Question 2
1 / -0

Z is a new partner and acquires his1/5th share of profit from X, an existing partner and present value of firm’s goodwill is Rs. 50,000. In this case Z is required to pay to X.

A
₹25000

B
₹10000

C
₹2000

D
₹5000

Solution

Calculation of the amount to be compensated to X for his sacrifice:
Goodwill of the firm = 50,000
Share acquired by Z = 1/5
Share to be compensated to X = 50,000 × 1/5 = 10,000
Question 3
1 / -0

Kamal and Rahul are partner’s in a firm sharing profits and losses in the ratio of 7:3.They admit Kaushal as a prtaner for 1/5th share.Kaushal acquires his share from Kamal and Rahul in the ratio of 3:2 . The goodwill of the firm has been valued at Rs.25000. Kaushal paid Rs.10000 privately to X and Y as his share of goodwill. What should be the journal entry

A
No entry will be passed

B
Kamal A/c Dr. Cash A/c Dr. To Goodwill A/c

C
Rahul A/c Dr. LoanA/c Dr. To Cash A/c

D
Rahul A/c Dr. Kamal A/c Dr. To Kaushal A/c

Solution

No need to pass any journal entry when a new partner pays his premium for goodwill amount privately to the sacrificing partners, it will not be recorded in the books of accounts.
Question 4
1 / -0

L and M are partners in a firm profit sharing ratio are 7:3. N and is admitted as a new partner for 3/7th share which he acquires 2/7th from L and 1/7th from M. N brings in ₹ 40000 as capital and ₹15000 as his share of goodwill. How much amount will be credited to L:

A
₹15000

B
₹25000

C
₹10000

D
₹20000

Solution

Calculation of amount to be credited to L:
Old Ratio : 7:3
New Ratio = 29:11:30
Sacrificing Ratio = 2:1
Premium for goodwill = 15,000
L’s share = 15,000 × 2/3 = 10,000
Question 5
1 / -0

Vivek and Vishal are partner with capital of ₹26000 and ₹22000 respectively. They admit David as partner for 1/4th share in the profits of the firm. David bring ₹30,000 (including 4,000 premium for goodwill) as his share of capital and premium. Journal entry for capital amount brought by new partner

A

Bank A/c Dr. To David’s Capital A/c   26000 26000

B

Bank A/c Dr. To Goodwill A/c   22000 22000

C

Bank A/c Dr. To Vivek Capital A/c   34000 34000

D

Bank A/c Dr. To David’s Capital A/c   30000 30000

Solution

Total amount brought by David is ₹30,000. But this amount includes Rs.4,000 as premium for goodwill. Hence, his actual amount of capital is ₹26,000 i.e. 30,000 – 4,000.
Question 6
1 / -0

Hem and Nem are partners in a firm sharing profits in the ratio of 3:2. Their capitals were ₹80,000 and ₹50,000 respectively. They admitted Sam on Jan. 1, 2007 as a new partner for 1/5 share in the future profits. Sam brought ₹60,000 as his capital. With what amount Nem’s capital account will be credited?

A
13,200

B
66,000

C
8,800

D
22,000

Solution

Calculation of Nem’s account for goodwill (to be credited his account):
Total capital of new firm = 5 × Rs.60,000 = Rs. 3,00,000
Combined capital = Hem’s+Nem’s+Sam’s = Rs.80,000 + Rs. 50,000 + Rs.60,000 = Rs.1,90,000
Goodwill of the firm = Rs.1,10,000 (Rs. 3,00,000 – Rs.1,90,000)
Sam’s share = 1,10,000 × 1/5 = Rs. 22,000
Nem’s account to be credited with = 22,000 × 2/5 (sacrificing ratio) = 8,800
Question 7
1 / -0

A and B are partners in a firm sharing profits and losses in the ratio 1:2.They admitted C into the partnership and decided to give him 1/3rd share of the future profits. Find the new ratio of the partners.

A
4:2:3

B
3:2:1

C
2:4:3

D
3:4:2

Solution

Calculation of new profit sharing ratio:
Old Ratio = 1:2
C’s share = 1/3
Remaining profit = 1 – 1/3 = 2/3
A’s new share = 1/3 × 2/3 = 2/9
B’s new share = 2/3 × 2/3 = 4/9
New Ratio = 2 : 4 : 3
Question 8
1 / -0

A, B and C are partners sharing profits in the ratio of 3:2:1. They admit D for 1/6 share. C would retain his old share. Calculate new ratio of all partners.

A
10 : 8 : 5:5

B
12 : 8 : 5 : 5

C
9 : 8 : 5:5

D
9 : 8 : 5:6

Solution

Calculation of new ratio:
Let the profit be = 1
Share of C and D = 1/6 + 1/6 = 1/3
Remaining share after paying C and D = 1 – 1/3 = 2/3
A's New Share = 3/5 × 2/3 = 6/15
B's New Share = 2/5 × 2/3 = 4/15 New Ratio = 6/15 : 4/15 : 1/6 : 1/6 or 12 : 8 : 5 : 5
Question 9
1 / -0

A, B and C are partners sharing profits in the ratio of 3:2:1. They admit D for 1/6 share. C would retain his old share. Calculate C’s sacrifice

A
1/15

B
1/12

C
1/10

D
NIL

Solution

Calculation of C’s Sacrifice:
Old Share = 3:2:1
New Share = 12 : 8 : 5 : 5
C’s Sacrifice = 1/6 – 5/30 = Nil
Question 10
1 / -0

If partners capitals are fixed, premium for goodwill will be:

A
Credited to the P/L A/c

B
Credited to the Partners’ Capital A/cs

C
Credited to the P/L Adjustment A/c

D
Credited to the current A/cs of the Sacrificing partners

Solution

When capitals of the partners are fixed, in such a case current account should be opened to record all the transactions related to premium for goodwill, revaluation profit/loss, distribution of reserves and accumulated profits etc.

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Admission of a Partner Test - 6

Result

Admission of a Partner Test - 6

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SHARING IS CARING

Question 1

11:4:7

11:3:5

11:5:2

11:4:5

Solution

Question 2

₹25000

₹10000

₹2000

₹5000

Solution

Question 3

No entry will be passed

Kamal A/c Dr. Cash A/c Dr. To Goodwill A/c

Rahul A/c Dr. LoanA/c Dr. To Cash A/c

Rahul A/c Dr. Kamal A/c Dr. To Kaushal A/c

Solution

Question 4

₹15000

₹25000

₹10000

₹20000

Solution

Question 5

Bank A/c Dr. To David’s Capital A/c 26000 26000

Bank A/c Dr. To Goodwill A/c 22000 22000

Bank A/c Dr. To Vivek Capital A/c 34000 34000

Bank A/c Dr. To David’s Capital A/c 30000 30000

Solution

Question 6

13,200

66,000

8,800

22,000

Solution

Question 7

4:2:3

3:2:1

2:4:3

3:4:2

Solution

Question 8

10 : 8 : 5:5

12 : 8 : 5 : 5

9 : 8 : 5:5

9 : 8 : 5:6

Solution

Question 9

1/15

1/12

1/10

NIL

Solution

Question 10

Credited to the P/L A/c

Credited to the Partners’ Capital A/cs

Credited to the P/L Adjustment A/c

Credited to the current A/cs of the Sacrificing partners

Solution

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