Admission of a Partner Test

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Admission of a Partner Test - 3

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Weekly Quiz Competition

Question 1
1 / -0

According to Section 30 of Partnership Act 1932:

A
A Minor can be admitted as a partner by the consent of all partners for the time being.

B
New partner will inspect the books of accounts

C
New partner is allowed to share old profits

D
New partner will bring capital and goodwill in cash

Solution

As per the law a minor cannot be admitted in any contracts. But with the consent of all the existing partners as per section 30 of the partnership act a minor an be admitted into a partnership firm as a partner for the time being.
Question 2
1 / -0

New profit sharing ratio means

A
All partner(excluding old) share future profit and losses

B
Two partner(including new) share future profit and losses

C
All partner(including new) share future profit and losses in this new ratio

D
Partners will share future profits equally

Solution

New profit sharing ratio is fixed after the admission of the new partner. It is the ratio in which all the partners including the new partner share profits. It is the ratio of the reconstituted firm.
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
Rahul A/c    Dr.
Kamal A/c Dr.
  To Kaushal A/c

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

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

D
No entry will be passed

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

Amount brought by a new partner for his share in goodwill is known as _____

A
Premium

B
Will

C
Profit

D
Discount

Solution

When a new partners is admitted into the partnership he brings some amount in cash as his capital and some amount for his share in goodwill. The amount he brings for the share of goodwill is known as premium for goodwill.
Question 5
1 / -0

At the time of admission of a new partner, the new partner acquires his share from the old partners in the:

A
Sacrificing ratio

B
New Ratio

C
Old ratio

D
Gaining Ratio

Solution

When a new partner is admitted, old partners will sacrifice some share in favor of new partner, the share they sacrifice in favor of new partner is known as sacrifice share or sacrificing ratio of the old partners.
Question 6
1 / -0

Section ____ of the Indian Partnership Act provides that a new partner shall not be inducted into a firm without the consent of all existing partners

A
31

B
32

C
33

D
30

Solution

Section 31 of the Indian Partnership Act provides that a new partner shall not be inducted into a firm without the consent of all existing partners.The consent of all the existing partners is required for admission of a new partner.
Question 7
1 / -0

What adjustments are mainly done at the time of admission of a new partner?

(i) Adjustment in Profit sharing ratio

(ii) Goodwill

(iii) Accumulated profits, Reserves and losses

A
Only (i) and (ii)

B
All (i), (ii) and (iii)

C
Only (ii)

D
Only (i)

Solution

Adjustments to be done at the time of admission of a partner are:

1.Change in profit sharing ratio

2.Adjustment for premium for goodwill

3.Adjustment of old goodwill (given in balance sheet)

4.Revaluation account (revaluation of assets and re-assessment of liabilities)

5.Accumulated profits and reserves

6.Adjustment of capital
Question 8
1 / -0

Sacrificing ratio is calculated for :

A
It is related to all partners

B
It is related to all partners (including new)

C
The old partners

D
It is related to new partners

Solution

When the new partner is admitted he gets his share of profits from the old partners. In other words the old partners sacrifice a part of their share to admit the new partner. Hence the sacrificing ratio is calculated for the old partners. Sacrificing ratio = Old ratio - New ratio.(of the old partners)
Question 9
1 / -0

Hari and Mohan are partners in the ratio 3:2. On 1st April, 2015 they admitted John as a new partner with 1/6 share in profit of the firm. Find out the sacrifice or gain of Mohan.

A
Mohan’s Sacrifice 2/30

B
Mohan’s Gain 2/5

C
Mohan’s Sacrifice 1/5

D
Mohan’s Gain 1/5

Solution

Calculation of Mohan’s Sacrifice/gain:

Old Ratio = 3:2

New Ratio = 3:2:1

Sacrificing Ratio = 3:2

Sacrifice of Hari = 3/5 – 3/6 = 3/30

Mohan = 2/5 – 2/6 = 2/30
Question 10
1 / -0

Anand and Nitin are partners sharing profits in the ratio of 3:2. They admitted Jayshree as a new partner for 3/10 share which she acquired 2/10 from Anand and 1/10 from Nitin. Calculate the new profit sharing ratio of Anand, Nitin and Jay

A
2:1:1

B
3:2:2

C
4:3:3

D
1:2:2

Solution

Jayshree’s share = 3/10

Anand’s share = 3/5 – 2/10 = 4/10

Nitin’s share = 2/5 – 1/10 = 3/10

New profit sharing ratio = 4:3:3

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 3

Result

Admission of a Partner Test - 3

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Rank

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SHARING IS CARING

Question 1

A Minor can be admitted as a partner by the consent of all partners for the time being.

New partner will inspect the books of accounts

New partner is allowed to share old profits

New partner will bring capital and goodwill in cash

Solution

Question 2

All partner(excluding old) share future profit and losses

Two partner(including new) share future profit and losses

All partner(including new) share future profit and losses in this new ratio

Partners will share future profits equally

Solution

Question 3

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

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

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

No entry will be passed

Solution

Question 4

Premium

Will

Profit

Discount

Solution

Question 5

Sacrificing ratio

New Ratio

Old ratio

Gaining Ratio

Solution

Question 6

31

32

33

30

Solution

Question 7

Only (i) and (ii)

All (i), (ii) and (iii)

Only (ii)

Only (i)

Solution

Question 8

It is related to all partners

It is related to all partners (including new)

The old partners

It is related to new partners

Solution

Question 9

Mohan’s Sacrifice 2/30

Mohan’s Gain 2/5

Mohan’s Sacrifice 1/5

Mohan’s Gain 1/5

Solution

Question 10

2:1:1

3:2:2

4:3:3

1:2:2

Solution

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

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

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