Class 12 Accountancy

Chapter 2 Solutions — Reconstitution of a Partnership Firm — Admission of a Partner

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Solutions

Overview

Step-by-step NCERT solutions for Reconstitution of a Partnership Firm — Admission of a Partner (Chapter 2, CBSE Class 12 Accountancy) — every question and answer worked out in full, not just the final result. You can also read the Reconstitution of a Partnership Firm — Admission of a Partner textbook chapter.

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All 49 questions in Reconstitution of a Partnership Firm — Admission of a Partner are solved in the PDF. Here's what's inside, exercise by exercise:

Short & Long Answer Questions

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?
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
Do you advise that assets and liabilities must be revalued at the time of admission of a partner? If so, why? Also describe how is this treated in the book of account?
What is goodwill? What factors affect goodwill?
Explain various methods of valuation of goodwill.
If it is agreed that the capital of all the partners should be proportionate to the new profit sharing ratio, how will you work out the new capital of each partner? Give examples and state how necessary adjustments will be made.
Explain how will you deal with goodwill when new partner is not in a position to bring his share of goodwill in cash.
Explain various methods for the treatment of goodwill on the admission of a new partner?
How will you deal with the accumulated profits and losses and reserves on the admission of a new partner?
At what figures the value of assets and liabilities appear in the books of the firm after revaluation has been due. Show with the help of an imaginary balance sheet.

Numerical Questions

A and B were partners in a firm sharing profits and losses in the ratio of 3:2. They admit C into the partnership with 1/6 share in the profits. Calculate the new profit sharing ratio.
A, B, C were partners in a firm sharing profits in 3:2:1 ratio. They admitted D for 10% profits. Calculate the new profit sharing ratio.
X and Y are partners sharing profits in 5:3 ratio. They admitted Z for 1/10 share which he acquired equally from X and Y. Calculate new profit sharing ratio.
A, B and C are partners sharing profits in 2:2:1 ratio. They admitted D for 1/8 share which he acquired entirely from A. Calculate new profit sharing ratio.
P and Q are partners sharing profits in 2:1 ratio. They admitted R into partnership giving him 1/5 share which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio.
A, B and C are partners sharing profits in 3:2:2 ratio. They admitted D as a new partner for 1/5 share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate new profit sharing ratio.
A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for 3/7 share which he took 2/7 from A and 1/7 from B. Calculate new profit sharing ratio.
A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new partner for 4/7 profit. D acquired his share 2/7 from A, 1/7 from B and 1/7 from C. Calculate new profit sharing ratio.
Radha and Rukmani are partners in a firm sharing profits in 3:2 ratio. They admitted Gopi as a new partner. Radha surrendered 1/3 of her share in favour of Gopi and Rukmani surrendered 1/4 of her share in favour of Gopi. Calculate new profit sharing ratio.
Singh, Gupta and Khan are partners in a firm sharing profits in 3:2:3 ratio. They admitted Jain as a new partner. Singh surrendered 1/3 of his share in favour of Jain; Gupta surrendered 1/4 of his share in favour of Jain and Khan surrendered 1/5 in favour of Jain. Calculate new profit sharing ratio.
Sandeep and Navdeep are partners in a firm sharing profits in 5:3 ratio. They admit C into the firm and the new profit sharing ratio was agreed at 4:2:1. Calculate the sacrificing ratio.
Rao and Swami are partners in a firm sharing profits and losses in 3:2 ratio. They admit Ravi as a new partner for 1/8 share in the profits. The new profit sharing ratio between Rao and Swami is 4:3. Calculate new profit sharing ratio and sacrificing ratio.
Compute the value of goodwill on the basis of four years' purchase of the average profits based on the last five years. The profits for the last five years were as follows: 2015: Rs. 40,000; 2016: Rs. 50,000; 2017: Rs. 60,000; 2018: Rs. 50,000; 2019: Rs. 60,000.
Firm's Capital in a business is Rs. 2,00,000. The normal rate of return on firm's capital is 15%. During the year 2015 the firm earned a profit of Rs. 48,000. Calculate goodwill on the basis of 3 years purchase of super profit.
The books of Ram and Bharat showed that the firm's capital on 31.12.2016 was Rs. 5,00,000 and the profits for the last 5 years: 2015 Rs. 40,000; 2014 Rs. 50,000; 2013 Rs. 55,000; 2012 Rs. 70,000 and 2011 Rs. 85,000. Calculate the value of goodwill on the basis of 3 years purchase of the average super profits of the last 5 years assuming that the normal rate of return is 10%.
Rajan and Rajani are partners in a firm. Their capitals were Rajan Rs. 3,00,000; Rajani Rs. 2,00,000. During the year 2015 the firm earned a profit of Rs. 1,50,000. Calculate the value of goodwill of the firm by capitalisation method assuming that the normal rate of return is 20%.
A business has earned average profits of Rs. 1,00,000 during the last few years. Find out the value of goodwill by capitalisation method, given that the assets of the business are Rs. 10,00,000 and its external liabilities are Rs. 1,80,000. The normal rate of return is 10%.
Verma and Sharma are partners in a firm sharing profits and losses in the ratio of 5:3. They admitted Ghosh as a new partner for 1/5 share of profits. Ghosh is to bring in Rs. 20,000 as capital and Rs. 4,000 as his share of goodwill premium. Give the necessary journal entries: a) When the amount of goodwill is retained in the business. b) When the amount of goodwill is fully withdrawn. c) When…
A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They decide to admit C into partnership with 1/4 share in profits. C will bring in Rs. 30,000 for capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at Rs. 20,000. The new profit sharing ratio is 2:1:1. A and B withdraw their share of goodwill. Give necessary journal…
Arti and Bharti are partners in a firm sharing profits in 3:2 ratio. They admitted Sarthi for 1/4 share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for his 1/4 share of goodwill. Goodwill already appears in the books of Arti and Bharti at Rs. 5,000. The new profit sharing ratio between Arti, Bharti and Sarthi will be 2:1:1. Record the necessary journal…
X and Y are partners in a firm sharing profits and losses in 4:3 ratio. They admitted Z for 1/8 share. Z brought Rs. 20,000 for his capital and Rs. 7,000 for his 1/8 share of goodwill. Goodwill already appears in the books at Rs. 40,000. Show necessary journal entries in the books of X, Y and Z?
Aditya and Balan are partners sharing profits and losses in 3:2 ratio. They admitted Christopher for 1/4 share in the profits. The new profit sharing ratio agreed was 2:1:1. Christopher brought Rs. 50,000 for his capital. His share of goodwill was agreed to at Rs. 15,000. Christopher could bring only Rs. 10,000 out of his share of goodwill. Record necessary journal entries in the books of the…
Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They admitted Kanwar for 1/4 share of profits. Kanwar could not bring his share of goodwill premium in cash. The Goodwill of the firm was valued at Rs. 80,000 on Kanwar's admission. Record necessary journal entry for goodwill on Kanwar's admission.
Mohan Lal and Sohan Lal were partners in a firm sharing profits and losses in 3:2 ratio. They admitted Ram Lal for 1/4 share on 1.1.2013. It was agreed that goodwill of the firm will be valued at 3 years purchase of the average profits of last 4 years which were Rs. 50,000 for 2013, Rs. 60,000 for 2014, Rs. 90,000 for 2015 and Rs. 70,000 for 2016. Ram Lal did not bring his share of goodwill…
Rajesh and Mukesh are equal partners in a firm. They admit Hari into partnership and the new profit sharing ratio between Rajesh, Mukesh and Hari is 4:3:2. On Hari's admission goodwill of the firm is valued at Rs. 36,000. Hari is unable to bring his share of goodwill premium in cash. Rajesh, Mukesh and Hari decided not to show goodwill in their balance sheet. Record necessary journal entries for…
Amar and Akbar are equal partners in a firm. They admitted Anthony as a new partner and the new profit sharing ratio is 4:3:2. Anthony could not bring this share of goodwill Rs. 45,000 in cash. It is decided to do adjustment for goodwill without opening goodwill account. Pass the necessary journal entry for the treatment of goodwill.
27.
Given below is the Balance Sheet of A and B, who are carrying on partnership business on 31.12.2016. A and B share profits and losses in the ratio of 2:1. C is admitted as a partner on the date of the balance sheet on the following terms:
- (i) C will bring in Rs. 1,00,000 as his capital and Rs. 60,000 as his share of goodwill for 1/4 share in the profits.
- (ii) Plant is to be appreciated to Rs…
Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. In April 2017 they admitted Om as a new partner. On the date of Om's admission the balance sheet of Leela and Meeta showed a balance of Rs. 16,000 in general reserve and Rs. 24,000 (Cr) in Profit and Loss Account. Record necessary journal entries for the treatment of these items on Om's admission. The new…
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.
30.
A and B share profits in the proportions of 3/4 and 1/4. Their Balance Sheet on March 31, 2016 was as follows. On April 1, 2017, C was admitted into partnership on the following terms:
- (a) C pays Rs. 10,000 as his capital.
- (b) C pays Rs. 5,000 for goodwill. Half of this sum is to be withdrawn by A and B.
- (c) Stock and fixtures be reduced by 10% and a 5% provision for doubtful debts be created on…
A and B are partners sharing profits and losses in the ratio of 3:1. On 1st April 2017 they admitted C as a new partner for 1/4 share in the profits of the firm. C brings Rs. 20,000 as his capital for 1/4 share in the profits of the firm. The capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and liabilities, etc. have been worked out at Rs. 50,000 for A and…
Pinky, Qumar and Roopa are partners in a firm sharing profits and losses in the ratio of 3:2:1. S (Seema) is admitted as a new partner for 1/4 share in the profits of the firm, which she gets 1/8 from Pinky and 1/16 each from Qumar and Roopa. The total capital of the new firm after Seema's admission will be Rs. 2,40,000. Seema is required to bring in cash equal to 1/4 of the total capital of the…
33.
The following was the Balance Sheet of Arun, Bablu and Chetan sharing profits and losses in the ratio of 6:5:3 respectively. They agreed to take Deepak into partnership and give him a share of 1/8 on the following terms:
- (a) Deepak should bring in Rs. 4,200 as goodwill and Rs. 7,000 as his Capital;
- (b) furniture be depreciated by 12%;
- (c) stock be depreciated by 10%;
- (d) a Reserve of 5% be…
34.
Azad and Babli are partners in a firm sharing profits and losses in the ratio of 2:1. Chintan is admitted into the firm with 1/4 share in profits. Chintan will bring in Rs. 30,000 as his capital. The Balance Sheet of Azad and Babli as on March 31, 2016 was as given. It was agreed that:
- (i) Chintan will bring in Rs. 12,000 as his share of goodwill premium;
- (ii) Buildings were valued at Rs. 45,000…
35.
Ashish and Dutta were partners in a firm sharing profits in 3:2 ratio. On Jan. 01, 2015 they admitted Vimal for 1/5 share in the profits. The Balance Sheet of Ashish and Dutta as on March 31, 2016 was as given. It was agreed that:
- (i) The value of Land and Building be increased by Rs. 15,000;
- (ii) The value of plant be increased by Rs. 10,000;
- (iii) Goodwill of the firm be valued at Rs. 20,000…

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