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Install NowExtra Questions For Class 12 Accountancy Admission of a Partner. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. These test papers with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. The students will not miss any concept in these Chapter wise question that are specially designed to tackle Exam. We have taken care of every single concept given in CBSE Class 12 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 12.
CBSE Class 12 Accountancy important Questions
Class 12 Accountancy Extra Questions
- Kamal and Rahul are partner’s in a firm sharing profits and losses in the ratio of 7:3. They admit Kaushal as a partner 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
- No entry will be passed
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. LoanA/c Dr.
To Cash A/c
- Being Chander brought rs 20000 for his share of goodwill. Which account should be debited?
- Goodwill A/c
- Cash/Bank A/c
- Profit and Loss A/c
- Partner’s capital account
- If goodwill already existing in the ——–, it should be written off by debiting old partners in their old profit sharing ratio
- Trading account
- Balance sheet
- Trial Balance
- Profit and loss account
- In case of undistributed accumulated losses whose account should be debited
- New partner’s A/c
- Old partner’s Capital A/c
- Gaining Partner’s A/c
- Goodwill A/c
- What treatment should be given to Employee’s Provident Fund appearing in the liabilities side of the Balance Sheet in case of admission of a partner
- Not to be distributed
- Should be distributed in equal ratio
- Should be distributed as a part of reserve
- Both treatment can be done
A and B were partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted C as a new partner. The new profit sharing ratio between A, B and C was 3: 2 : 3. A surrendered 1515 th of his share in favour of C. Calculate B’s sacrifice.
Accounting Standard-26 requires that goodwill is to be recorded in the books of accounts only when money or money’s worth has been paid for it. How will you deal with the issue, if the new partner is unable to bring in his share of goodwill ?
Amit and Viney are partners in a firm sharing profits and losses in 3:1 ratio. On 1.1.2017 they admitted Ranjan as a partner. On Ranjan’s admission the profit and loss account of Amit and Viney showed a debit balance of Rs 40,000. Record necessary journal entry for the treatment of the same.
(All partners sacrifice) : A and B partners sharing profits and losses in the ratio of 3:2. They admit C into partnership for 1/4 share in profits. C’s brings Rs. 3,00,000 as capital and Rs. 1,00,000 as goodwill. New profit sharing ratio of the partners shall be 3:3:2. Pass necessary Journal entries.
At the time of admission of a new partner, new profit-sharing ratio is ascertained. The new of incoming partner acquires the share from old partners and as a result profit share of old partners is reduced. What is it known as and why is it important to ascertain it?
A and B who shared profits in the proportion of 5 : 3 had capitals of Rs 70,000 and Rs 40,000 respectively. They agree to admit C into partnership for 110110th share in future profits. C brings Rs 30,000 as capital and is unable to bring Rs 1,600 as his share of goodwill in cash. Give journal entries.
Asha and Aditi are partners in a firm sharing profits and losses in the ratio of 3 : 2 They admit Raghav as a partner for 1414th share in the profits of the firm Raghav brings Rs.6,00,000 as his capital and his share of goodwill in cash. Goodwill of the firm is to be valued at two year’s purchase of average profits of the last four years.
The profits of the firm during the last four years are given below:Year Profit (Rs.) 2013 – 14 3,50,000 2014 – 15 4,75,000 2015 – 16 6,70,000 2016 – 17 7,45,000 The following additional information is given.
- To occur management cost an annual charge or Rs. 56,250 should be made for the purpose of valuation of goodwill.
- The closing stock for the year ended 31st March 2017 was overvalued by Rs. 15,000 Pass necessary journal entries on Raghav’s admission showing the working notes clearly.
X and Y are partners in a firm sharing profits in the ratio of 4 : 3. On 1st April, 2012, they admitted Z as a new partner. Z brought in Rs 1,00,000 for his capital and Rs 21,000 for 1/3 rd share of goodwill premium. On Z’s admission goodwill appeared in the books of the firm at Rs 28,000. Record the necessary journal entries on Z’s admission
A, B and C were partners in a firm sharing profits in the ratio of 3:2:1. On 31st March, 2019 their balance sheet was as follows
Balance Sheet
as at 31st March, 2015Liabilities Amit (Rs) Assets Amt (Rs) Creditors 84,000 Bank 17,000 General Reserve 21,000 Debtors 23,000 Capital A/cs Stock 1,10,000 A 60,000 Investments 30,000 B 40,000 Furniture and Fittings 10,000 C 20,000 1,20,000 Machinery 35,000 2,25,000 2,25,000 On the above date, D was admitted as a new partner and it was decided that
- The new profit sharing ratio between A, B, C and D will be 2: 2: 1: 1.
- Goodwill of the firm was valued at Rs 90,000 and D brought his share of goodwill premium in cash.
- The market value of investments was Rs 24,000.
- Machinery will be reduced to Rs 29,000.
- A creditor of Rs 3,000 was not likely to claim the amount and hence to be written-off.
- D will bring proportionate capital so as to give him l/6th share in the profits of the firm.
Prepare revaluation account, partners’ capital accounts and the balance sheet of the reconstituted firm.
On 31st March, 2010 the balance sheet of W and R who shared profits in 3: 2 ratio was as follows
Balance Sheet
as at 31st March, 2010Liabilities Amt (Rs) Assets Amt (Rs) Creditors 20,000 Cash ‘5,000 Profit and Loss A/c 15,000 Sundry Debtors 20,000 Capital A/cs (-) Provision for Doubtful Debts (700) 19,300 W 40,000 Stock 25,000 R 30,000 70,000 Plant and Machinery 35,000 Patents 20,700 1,05,000 1,05,000 On this date, B was admitted as a partner on the following conditions
- B will get 4/15th share of profits.
- B had to bring Rs 30,000 as his capital to which amount other partners’ capital shall have to be adjusted.
- He would pay cash for his share of goodwill which would be based on 2.5 years’ purchase of average profits of past 4 years.
- The assets would be revalued as under Sundry debtors at book value less 5% provision for bad debts, stock at ? 20,000, plant and machinery at Rs 40,000.
- The profits of the firm for the year’s ending on 31st March, 2007, 2008 and 2009 were Rs 20,000, Rs 14,000 and Rs 17,000 respectively.
Prepare revaluation account, partners’ capital account and balance sheet of the new firm.
Ch-4 Admission of a Partner
Answer
- No entry will be passed, Explanation: 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.
- Cash/Bank A/c, Explanation: When a new partner is admitted and he brings his share of goodwill (premium for goodwill) in cash, in such a case Cash or Bank account should be debited and Premium for goodwill account should be credited.
- Balance sheet, Explanation: The goodwill already existing in the balance sheet of the old firm should be written off and transferred to the old partners capital account in the old ratio.
- Old partner’s Capital A/c, Explanation: At the time of admission of a new partner, all accumulated profits and losses should be distributed among the old partners in their old profit sharing ratio. Accumulated losses given in the assets side of the balance sheet should also be written off to he old partners in the old ratio. Hence the old partners capital accounts are to be debited to write off the accumulated losses in the balance sheet.
- Not to be distributed, Explanation: Employee provident fund is not a free reserve.It is not an accumulated profit. Partners cannot distribute it among themselves. This is outsiders’ liability which has to be paid to the employees after sometime. It will be shown in the new balance sheet of the firm (if not paid).
- B’s Sacrifice = Old Share – New Share
= 38−28=1838−28=18we can say, 13 13 rd of B’s share - When the new partner is unable to bring premium of goodwill in cash. In such a situation, New Partner’s Capital Account will be debited with his share of goodwill and sacrificing Partners’ Capital Accounts will be credited with their respective shares. In case of Fixed Capital Accounts, new partners Current Accounts will be debited and sacrificing partners current a/c will be credited.
Books of Amit, Viney and Ranjan Journal Date Particulars L.F. Dr. Rs. Cr. Rs. 01.01.17 Amit’s Capital A/c Dr. 30,000 Viney’s Capital A/c Dr. 10,000 To Profit and Loss A/c 40,000 (Being debit balance of Profit and Loss Account distributed between old partner in their old ratio, i.e., 3 : 1) - Journal
Date Particulars L.F. Debit (Rs.) Credit (Rs.) i Bank A/c Dr. 4,00,000 To Premium for Goodwill A/c 1,00,000 To C’s Capital A/c 3,00,000 (Being the amount of goodwill and capital brought in by new partner.) Premium for Goodwill A/c Dr. 1,00,000 To A’s Capital A/c 90,000 To B’s Capital A/c 10,000 (Being the goodwill distributed between A and B in their sacrificing ratio i.e., 9 : 1, see W.N.1) Working Note:-
Calculating sacrificing Ratio
Sacrificing Share = Old Share – New Share
A = 35−38=24−1540=94035−38=24−1540=940
B = 25−38=16−1540=14025−38=16−1540=140
- When a new partner is admitted in the firm, he has to be given a share in the profit of the firm. This part of the profit has to be compensated by the old partners. Hence their part of share in profit gets reduced. The reduced part of the profit-sharing ratio of the old partners is known as Sacrificing Ratio. It is important to ascertain the sacrificing ratio because of the reason that the new partner will have a share in an existing firm for which he compensates by paying goodwill to the sacrificing partner or partners in the sacrificing ratio.
- Books of A, B and C
JournalDate Particulars L.F. Dr. (Rs) Cr. (Rs) (i) Bank A/c Dr. 30,000 To C’s Capital A/c 30,000 (Being cash brought in by C for his share of capital.) (ii) C’s Capital A/c Dr. 1,600 To A’s Capital A/c 1,000 To B’s Capital A/c 600 (Being share of goodwill on C’s admission is adjusted in sacrificing ratio, i.e., 5 : 3.) - JOURNAL Entries
Date Particulars LF Dr. Cr. 2017 Rs. Rs. Apr 01 Cash A/c…….Dr. 8,50,000 To Raghav’s Capital A/c 6,00,000 To Premium for Goodwill A/c 2,50,000 (Being Rahgav brought his capital and goodwill.) Apr 01 Premium for Goodwill A/c…….Dr. 2,50,000 To Asha’s Capital A/c 1,50,000 To Aditi’s Capital A/c 1,00,000 (Being goodwill brought by new partner distributed among the old partners in their sacrificing ratio.) Working Note:
Calculation of Adjusted ProfitYear Profit Adjustments Adjusted Profit 2013 – 14 3,50,000 – 56,250 = 2,93,750 2014 – 15 4,75,000 – 56,250 = 4,18,750 2015 – 16 6,70,000 – 56,250 = 6,13,750 2016 – 17 7,45,000 – 56,250 – 15,000 = 6,73,750 Total 20,00,000 Average Adjusted profit = 20,00,000420,00,0004 = Rs. 5,00,000
Goodwill = Average profit × Number of years’ purchase
= 5,00,000 × 2 = Rs. 10,00,000
Raghav’s share of goodwill = 10,00,000 × 1414 = Rs. 2,50,000 to be shared by Asha and Aditi in 3 : 2 ratio. - Journal
Date Particulars L.F. Debit Amount (Rs) Credit Amount(Rs) 01/04/2012 X’s Capital A/c Dr. 16,000 Y’s Capital A/c Dr. 12,000 To Goodwill A/c 28,000 (Being the existing goodwill written off prior to Z’s admission between X and Y in their Profit Sharing Ratio, which is 4:3) 01/04/2012 Bank A/c Dr. 1,21,000 To Z’s Capital A/c 1,00,000 To premium of Goodwill A/c 21,000 (Being Z brought in cash for his capital and his share of goodwill for 1/4th share in future profit) 01/04/2012 Premium of Goodwill A/c Dr. 21,000 To X’s Capital A/c 12,000 To Y’s Capital A/c 9,000 (Being the premium for goodwill brought in by Z transferred to the Capital Accounts of X and Y in their sacrificing ratio, which is 4 : 3) - Working Notes:
- total Goodwill = 90,000
D’s share = 90,000 ×× 1/6 = 15,000
Calculation Of Gain Or Sacrifice
Sacrifice = Old Share – New Share
A’s Sacrifice = 3/6 – 2/6 = 1/6
B’s Sacrifice = 2/6 – 2/6 = 0
C’s Sacrifice = 1/6 – 1/6 = 0
So Cash Brought By D for Goodwill Will Be Credited To A’s Account only. - Calculation of D’s Capital
Adjusted Capital Of A = 81,000
Adjusted Capital Of B = 44,000
Adjusted Capital Of C = 22,000
Total Adjusted Capital = 1,47,000
Combined Share Of A, B, C = 1 – 1/6 = 5/6
So D’s Share In Capital = 1,47,000 ×× 6/5 ×× 1/6 = 29,400
Revaluation Account
Particulars Amount Particulars Amount To Investment 6,000 By Creditors a/c 3,000 To Machinery A/c 6,000 By Revaluation Loss T/F A’s Capital A/c 4,500 B’s Capital A/c 3,000 C’s Capital A/c 1,500 9,000 12,000 12,000 Partner’s Capital A/c:-
Particulars A B C D Particulars A B C D To Revaluation (Loss) 4,500 3,000 1,500 By Bal b/d 60,000 40,000 20,000 To Bal C/d 81,000 44,000 22,000 29,400 By General Reserve 10,500 7,000 3,500 By Premium for Goodwill (WN1) 15,000 By Bank (WN 2) 29,400 85,500 47,000 23,500 29,400 85,500 47,000 23,500 29,400 Balance Sheet:-
Liabilities Amount Assets Amount Creditors 81,000 Bank 61,400 Capital A/c Debtors 23,000 A 81,000 Stock 1,10,000 B 44,000 Investment 24,000 C 22,000 Furniture And Fittings 10,000 D 29,400 1,76,400 Machinery 29,000 2,57,400 2,57,400 - total Goodwill = 90,000
Dr Revaluation Account Cr Particulars Amt(Rs) Particulars To Provision for Bad Debts A/c 300 By Plant and Machinery A/c 5,000 To Stock A/c 5,000 By Loss Transferred to W’s Capital A/c (300×3/5) 180 R’s Capital A/c (300×2/5) 120 300 5,300 5,300 Dr Partners’ Capital Account Cr Particulars W (Rs) R (Rs) B (Rs) Particulars W (Rs) R (Rs) B (Rs) To Revaluation A/c (Loss) 180 120 __ By Balance b/d 40,000 30,000 __ To Cash A/c 5,920 7,280 __ By Cash A/c __ __ 30,000 (Balancing figure) By Premium for Goodwill A/c 6,600 4,400 To Balance c/d 49,500 33,000 30,000 By Profit and Loss A/c 9,000 6,000 55,600 40,400 30,000 Balance Sheet
as at 31st March, 2010Liabilities Amt(Rs) Assets Amt(Rs) Creditors 20,000 Debtors 20,000 Capital A/cs (-) Provision for Doubtful Debts (1,000) 19,000 W 49,500 Stock (25,000- 5,000) 20,000 R 33,000 Plant and Machinery (35,000+ 5,000) 40,000 B 30,000 1,12,500 Patents 20,700 Cash 32,800 1,32,500 1,32,500 Working Note
Calculation of New Profit Sharing Ratio
Let total profit be 1
B ’s share of profit =415415 Remaining share=1−415=15−415=1115=1−415=15−415=1115
W’s new share = 1115×35=33751115×35=3375; R’s new share = =1115×25=2275=1115×25=2275
B’s new share = 415×55=2075415×55=2075
New profit sharing ratio = 33:22:20
Calculation of Goodwill
4 years average profit =20,000+14,000+17,000+15,0004=Rs 16,50020,000+14,000+17,000+15,0004=Rs 16,500
Value of Firm’s Good = Average Profit××Number of Year’s Purchase
=16,500×2.5=Rs 41,250=16,500×2.5=Rs 41,250
B ’s share of goodwill =41,250×415=Rs 11,00041,250×415=Rs 11,000 to be credited to W and R in Sacrificing ratio i.e., 3:2Dr Cash Account Cr Particulars Amt(Rs) Particulars Amt(Rs) To Balance b/d 5,000 By W’s Capital A/c 5,920 To B’s Capital A/c 30,000 By R’s Capital A/c 7,280 To Premium for Goodwill A/c 11,000 By Balance c/d (Balancing figure) 32,800 46,000 46,000 Calculation of Adjustment of Capital
B’s share =415=415
B ’s capital = Rs 30,000
For 415415 the share, capital = Rs 30,000
Total capital = 30,000×154=Rs 12,50030,000×154=Rs 12,500
W ’s new capital = 1,12,500×3375=Rs 49,5001,12,500×3375=Rs 49,500
R ’s new capital = 1,12,500×2275=Rs 33,0001,12,500×2275=Rs 33,000
B’s new capital = 1,12,500×2075=Rs 30,0001,12,500×2075=Rs 30,000
Class 12 Accountancy Chapter Wise Practice Questions
- FS of Non profit Organisation
- Fundamentals of partnership and Goodwill
- Change in Profit sharing ratio of Partners
- Admission of a Partner
- Retirement or Death of a partner
- Dissolution of Partnership
- Accounting for share Capital
- Accounting for Debentures
- Financial Statements and Analysis
- Statement Analysis Tools and Accounting Ratios
- Cash Flow Statement
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Please Correct the text….
There should be written that ” C comes for ‘1/10th’ profits” but there is written “110th”. Please correct it.. some innocent students may get confused…
??? ?? ??? ???? ?? “14th share of profits” ???? ??? ????? ?? ??? ?? ?? ?? “1/4th” ???? ????? ??
???? ??? ?? ?? ?? ???? ?? ??????? ?? ??? ?? ????? ???? ??? ?? ???? ?? ??? ???? ?????
????? ??? ?? ??? ????…. ????? ???? ???? ????? ?? ‘C comes for ‘1/10th’ profits” ????? ???? ?? “110th” ???? ??? ????? ??? ??? ????.. ??? ??????? ????? ?????? ?? ???? ???…