Admission of a Partner Test

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Admission of a Partner Test - 74

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Question 1
1 / -0

A and B are partners in a firm sharing profits in the ratio of 2 : 1. They admit C as a new partner for 1/5 share. New Ratio of A and B will be 1 : 2. Sacrificing ratio will be:

A
Sacrificing ratio 3 : 5

B
Sacrificing ratio 2 : 1

C
Sacrificing ratio 1 : 1

D
A’s Sacrifice 6/15 and B’s Gain 3/15

Solution

Calculation of sacrificing ratio of partners:

Old Ratio = 2:1

New Ratio of A and B = 1:2

New Ratio of A, B and C will be : 1 – 1/5 = 4/5

A’s new share = 1/3 × 4/5 = 4/15

B’s new share = 2/3 × 4/5 = 8/15

C’s Share 1/5 OR 3/15

New Ratio 4 : 8: 3

Sacrificing Ratio = A : 2/3 – 4/15= 6/15

B : 1/3 – 8/15 = 3/15 Gain
Question 2
1 / -0

WHEN the value of goodwill is not given at the time of admission of a new partner, it IS inferred from the capital OF THE NEW FIRM and profit sharing ratio. This concept is called

A
Premium for Goodwill

B
Purchased Goodwill

C
Hidden Goodwill

D
Average Goodwill

Solution

It is known as hidden goodwill. Following formula should be used to calculate the value of hidden goodwill: Total Capital of the NEW firm – Combined capital of ALL partners = Hidden Goodwill
Question 3
1 / -0

According to section 31(1) of _____ new partner can be admitted only with consent of all existing partners

A
Cooperatives

B
Joint Hindu Family

C
Companies Act 1956

D
Partnership Act, 1932

Solution

When there is no proper guidelines or when there is no partnership deed or when partnership deed is silent on the issue of admission of a new partner. In such a case all provisions of the Partnership Act, 1932 will be applicable according to which a new partner can be admitted into the partnership only with the consent of all existing partners.
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
₹25000

B
₹15000

C
₹20000

D
₹10000

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

The incoming partner cannot acquire his share of profits :

A
From the old partners in some agreed ratio

B
From the old partners in their new profit sharing ratio

C
From the old partners in their old profit sharing ratio

D
From one or more partners (not from all partners)

Solution

A new partner can acquire his share of profits from the old partners in their old profit sharing ratio or from one partner or from the old partners equally. But he cannot acquire his share of profit from the old partners in the new profit sharing ratio because new profit sharing ratio is fixed only after the admission of the new partner.
Question 6
1 / -0

Why new partner needs to bring goodwill?

A
To compensate the sacrificing partners

B
For Revaluation Account

C
To compensate the old partners for their gain share

D
Both To compensate to the sacrificing partners and To compensate the old partners for their gain share

Solution

A new partner (at the time of his admission) will bring some extra amount with capital which is known as premium for goodwill. This amount will be given to the sacrificing partners for their sacrifice in favor of him.
Question 7
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
₹10000

B
₹2000

C
₹5000

D
₹25000

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 8
1 / -0

Premium brought by the new partner will be shared by the existing partners in:

A
Gain Ratio

B
Old Ratio

C
New Ratio

D
Sacrificing Ratio

Solution

When a new partner is admitted into the partnership firm, he brings some amount of premium for goodwill which will be shared/distributed by the sacrificing partners in their sacrificing ratio
Question 9
1 / -0

X and Y are partners sharing profits in the ratio of 3:2. Z is admitted for 1/5 share. All partners have decided to share future profits equally. The profit of new partnership firm was Rs.30,000. This profit will be shared by all the partners in _______

A
New Ratio

B
Sacrificing Ratio

C
Gaining Ratio

D
Old Ratio

Solution

Distribution of profit is to be done in new profit sharing ratio:

X = 30,000 × 1/3 = 10,000

Y = 30,000 × 1/3 = 10,000

Z = 30,000 × 1/3 = 10,000
Question 10
1 / -0

Which of the following situation is not acceptable for the continuity of the partnership firm?

A
Death and Admission

B
Retirement and Admission on the same day

C
All partners leave the firm together

D
Admission of two partners on the same day

Solution

If All partners leave a it means the partnership is dissolved. Partnership cannot be continued if all the partners leave the firm. For continuation of a firm atleast 2 partners is required.

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 74

Result

Admission of a Partner Test - 74

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Rank

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SHARING IS CARING

Question 1

Sacrificing ratio 3 : 5

Sacrificing ratio 2 : 1

Sacrificing ratio 1 : 1

A’s Sacrifice 6/15 and B’s Gain 3/15

Solution

Question 2

Premium for Goodwill

Purchased Goodwill

Hidden Goodwill

Average Goodwill

Solution

Question 3

Cooperatives

Joint Hindu Family

Companies Act 1956

Partnership Act, 1932

Solution

Question 4

₹25000

₹15000

₹20000

₹10000

Solution

Question 5

From the old partners in some agreed ratio

From the old partners in their new profit sharing ratio

From the old partners in their old profit sharing ratio

From one or more partners (not from all partners)

Solution

Question 6

To compensate the sacrificing partners

For Revaluation Account

To compensate the old partners for their gain share

Both To compensate to the sacrificing partners and To compensate the old partners for their gain share

Solution

Question 7

₹10000

₹2000

₹5000

₹25000

Solution

Question 8

Gain Ratio

Old Ratio

New Ratio

Sacrificing Ratio

Solution

Question 9

New Ratio

Sacrificing Ratio

Gaining Ratio

Old Ratio

Solution

Question 10

Death and Admission

Retirement and Admission on the same day

All partners leave the firm together

Admission of two partners on the same day

Solution

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