NCERT Solutions for Class 12 Accountancy (Part 1) Chapter 2 Reconstitution of a Partnership Firm – Admission of a partner
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Page 1
NCERT
SOLUTIONS
CLASS - 12th
aglase .co
SOLUTIONS
CLASS - 12th
aglase .co
Page 2
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Class : 12th
Subject : Accountancy
Chapter : 3
Chapter Name : Reconstitution of a partnership firm – Admission of a partner
Q1 Identify various matters that need adjustments at the time of admission of a new partner?
Answer. The various matters that need adjustments at the time of admission of a new partner
are –
● Profit sharing ratio
● Goodwill
● Revaluation of assets and liabilities
● Distribution of accumulated profits
● Adjustments of partner’s capital.
Page : 164 , Block Name : Short Answer Questions
Q2 Why it is necessary to ascertain new profit sharing ratio even for old partners when a new
partner is admitted?
Answer. At time of admission of a new partner, old partners sacrifice their share in favour of new
partner, thus reducing their share of profits and new partner is admitted to the share of profit.
Hence, it is necessary to ascertain new profit sharing ratio even for old partners when a new
partner is admitted.
Page : 164 , Block Name : Short Answer Questions
Page 1 of 85
Class : 12th
Subject : Accountancy
Chapter : 3
Chapter Name : Reconstitution of a partnership firm – Admission of a partner
Q1 Identify various matters that need adjustments at the time of admission of a new partner?
Answer. The various matters that need adjustments at the time of admission of a new partner
are –
● Profit sharing ratio
● Goodwill
● Revaluation of assets and liabilities
● Distribution of accumulated profits
● Adjustments of partner’s capital.
Page : 164 , Block Name : Short Answer Questions
Q2 Why it is necessary to ascertain new profit sharing ratio even for old partners when a new
partner is admitted?
Answer. At time of admission of a new partner, old partners sacrifice their share in favour of new
partner, thus reducing their share of profits and new partner is admitted to the share of profit.
Hence, it is necessary to ascertain new profit sharing ratio even for old partners when a new
partner is admitted.
Page : 164 , Block Name : Short Answer Questions
Page 1 of 85
Page 3
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Q3 What is sacrificing ratio? Why is it calculated?
Answer. Sacrificing ratio is the ratio at which old partners agree to sacrifice their share in favour
of a new partner at the time of admission of a partner to the partnership firm. It is calculated as
old ratio less new ratio.
Since old partners sacrifice their share in favour of new partner, new partner needs to
compensate old partner for their sacrifice in share. The new partner compensate the old partner
by making payment to them in the form of goodwill brought in by new partner transferred to
sacrificing partners in sacrificing ratio.
Page : 164 , Block Name : Short Answer Questions
Q4 On what occasion sacrificing ratio is used?
Answer. i) When new partner is admitted to the firm and he compensates old partner by
transferring the goodwill brought by him to the sacrificing partners in sacrificing ratio.
ii) When partners agree to change the profit sharing ratio among themselves. The gaining
partners compensate sacrificing partners in sacrificing ratio.
Page : 164 , Block Name : Short Answer Questions
Q5 If some goodwill already exists in the books and new partner brings in his share of goodwill
in cash, how will you deal with the existing amount of goodwill?
Answer. The existing amount of goodwill will be written off among the old partners in the old
profit sharing ratio.
Page : 164 , Block Name : Short Answer Questions
Page 2 of 85
Q3 What is sacrificing ratio? Why is it calculated?
Answer. Sacrificing ratio is the ratio at which old partners agree to sacrifice their share in favour
of a new partner at the time of admission of a partner to the partnership firm. It is calculated as
old ratio less new ratio.
Since old partners sacrifice their share in favour of new partner, new partner needs to
compensate old partner for their sacrifice in share. The new partner compensate the old partner
by making payment to them in the form of goodwill brought in by new partner transferred to
sacrificing partners in sacrificing ratio.
Page : 164 , Block Name : Short Answer Questions
Q4 On what occasion sacrificing ratio is used?
Answer. i) When new partner is admitted to the firm and he compensates old partner by
transferring the goodwill brought by him to the sacrificing partners in sacrificing ratio.
ii) When partners agree to change the profit sharing ratio among themselves. The gaining
partners compensate sacrificing partners in sacrificing ratio.
Page : 164 , Block Name : Short Answer Questions
Q5 If some goodwill already exists in the books and new partner brings in his share of goodwill
in cash, how will you deal with the existing amount of goodwill?
Answer. The existing amount of goodwill will be written off among the old partners in the old
profit sharing ratio.
Page : 164 , Block Name : Short Answer Questions
Page 2 of 85
Page 4
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Q6 Why there is need for revaluation of assets and liabilities on the admission of a partner?
Answer. It is necessary for the revaluation of assets and liabilities so as to ascertain whether the
assets and liabilities are shown in the books at their current value. This is done because the
value of assets and liabilities may have increased or decreased, so it is important that their true
and fair values are reflected as on the date of reconstitution of firm in the form of admission of a
new partner.
Page : 164 , Block Name : Short Answer Questions
Q1 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?
Answer. Yes it is advisable to revalue the assets and liabilities of the firm at the time of
admission of a new partner.
This is done because the value of assets and liabilities may have increased or decreased in due
time. So to ascertain their true and fair value and record the new value in balance sheet it
becomes important to revalue the assets and liabilities.
The increase in value of assets or decrease in value of liabilities shown in the credit side of
revaluation account as it is gain. Similarly, the decrease in value of assets or increase in value
of liabilities is shown in the debit side of revaluation account. The net profit or loss of revaluation
is transferred to old partner’s capital account. The new value of assets and liabilities is recorded
in balance sheet.
Page : 164 , Block Name : Long Answer Questions
Q2 What is goodwill? What factors affect goodwill?
Page 3 of 85
Q6 Why there is need for revaluation of assets and liabilities on the admission of a partner?
Answer. It is necessary for the revaluation of assets and liabilities so as to ascertain whether the
assets and liabilities are shown in the books at their current value. This is done because the
value of assets and liabilities may have increased or decreased, so it is important that their true
and fair values are reflected as on the date of reconstitution of firm in the form of admission of a
new partner.
Page : 164 , Block Name : Short Answer Questions
Q1 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?
Answer. Yes it is advisable to revalue the assets and liabilities of the firm at the time of
admission of a new partner.
This is done because the value of assets and liabilities may have increased or decreased in due
time. So to ascertain their true and fair value and record the new value in balance sheet it
becomes important to revalue the assets and liabilities.
The increase in value of assets or decrease in value of liabilities shown in the credit side of
revaluation account as it is gain. Similarly, the decrease in value of assets or increase in value
of liabilities is shown in the debit side of revaluation account. The net profit or loss of revaluation
is transferred to old partner’s capital account. The new value of assets and liabilities is recorded
in balance sheet.
Page : 164 , Block Name : Long Answer Questions
Q2 What is goodwill? What factors affect goodwill?
Page 3 of 85
Page 5
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. Goodwill is the value of the reputation of a firm in respect of the profits expected in
future over and above the normal profits.
Factors affecting goodwill are:-
● Nature of business: A firm producing good quality products and maintaining a stable
demand will earn more profit and have more goodwill.
● Location: If business is located at a central place, easily accessible to the people, then it
will have more goodwill.
● Efficiency of management: A well-managed business concern has higher productivity
and provides good services and hence has more goodwill.
● Market situation: If the firm has more control over the market situation, it tends to have
more goodwill as it earns high profits.
Page : 164 , Block Name : Long Answer Questions
Q3 Explain various methods of valuation of goodwill.
Answer. Various methods of valuation of goodwill are as follows –
● Average profit method: Under this method, the goodwill is valued at agreed number of
years purchase of the average profits of the past few years. Example, if past average
profit of business comes out as 10000 and is likely to continue for another 2 years. The
value of goodwill be 10000 times 2 = 20000.
Goodwill = Average profit X no. of years purchase
● Super profit method: Under this, goodwill is ascertained on the basis of excess profit
over normal profit known as super profit. Here are the steps involved-
a) Calculate average profit of firm.
b) Calculate normal profit of firm on capital employed on the basis of normal rate of
return.
c) Calculate super profit by deducting normal profit from average profit.
d) Calculate goodwill by multiplying super profit by given number of years purchase.
Page 4 of 85
Answer. Goodwill is the value of the reputation of a firm in respect of the profits expected in
future over and above the normal profits.
Factors affecting goodwill are:-
● Nature of business: A firm producing good quality products and maintaining a stable
demand will earn more profit and have more goodwill.
● Location: If business is located at a central place, easily accessible to the people, then it
will have more goodwill.
● Efficiency of management: A well-managed business concern has higher productivity
and provides good services and hence has more goodwill.
● Market situation: If the firm has more control over the market situation, it tends to have
more goodwill as it earns high profits.
Page : 164 , Block Name : Long Answer Questions
Q3 Explain various methods of valuation of goodwill.
Answer. Various methods of valuation of goodwill are as follows –
● Average profit method: Under this method, the goodwill is valued at agreed number of
years purchase of the average profits of the past few years. Example, if past average
profit of business comes out as 10000 and is likely to continue for another 2 years. The
value of goodwill be 10000 times 2 = 20000.
Goodwill = Average profit X no. of years purchase
● Super profit method: Under this, goodwill is ascertained on the basis of excess profit
over normal profit known as super profit. Here are the steps involved-
a) Calculate average profit of firm.
b) Calculate normal profit of firm on capital employed on the basis of normal rate of
return.
c) Calculate super profit by deducting normal profit from average profit.
d) Calculate goodwill by multiplying super profit by given number of years purchase.
Page 4 of 85
Page 6
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
● Capitalization method: Under this method, goodwill is calculated in two ways a) by
capitalizing average profits or b) by capitalizing the super profits.
a) Capitalization of average profit: This involves following steps -
· Ascertain the average profit of firm.
· Capitalize average profit on the basis of normal rate of return to ascertain capitalized
value of average profit as follows:
Average profit
· Ascertain actual capital employed by deducting outside liabilities from total assets.
· Compute goodwill by deducting the capital employed from capitalized value of
average profits.
b) Capitalization of super profits: Under this following steps are involved –
● Calculate capital employed of firm.
Capital employed = Total Assets – Outside Liabilities
● Calculate average profits on capital employed.
● Calculate super profit of firm
Super profit = Average profit – Normal profit
● Multiply super profit by the normal rate of return
Goodwill = Super profit
Page : 164 , Block Name : Long Answer Questions
Q4 If it is agreed that capital of all 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.
Page 5 of 85
● Capitalization method: Under this method, goodwill is calculated in two ways a) by
capitalizing average profits or b) by capitalizing the super profits.
a) Capitalization of average profit: This involves following steps -
· Ascertain the average profit of firm.
· Capitalize average profit on the basis of normal rate of return to ascertain capitalized
value of average profit as follows:
Average profit
· Ascertain actual capital employed by deducting outside liabilities from total assets.
· Compute goodwill by deducting the capital employed from capitalized value of
average profits.
b) Capitalization of super profits: Under this following steps are involved –
● Calculate capital employed of firm.
Capital employed = Total Assets – Outside Liabilities
● Calculate average profits on capital employed.
● Calculate super profit of firm
Super profit = Average profit – Normal profit
● Multiply super profit by the normal rate of return
Goodwill = Super profit
Page : 164 , Block Name : Long Answer Questions
Q4 If it is agreed that capital of all 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.
Page 5 of 85
Page 7
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. To work out the capital of partners following steps are taken –
● First ascertain the total capital of firm on the basis of new partner’s share.
● Now ascertain the share of each partner on the total capital of firm on the basis of new
profit sharing ratio.
● Compare the new capital with old capital after make necessary adjustments.
● The partners whose capital fall short will bring more cash and whose have surplus will
withdraw the excess amount of capital through cash.
Example: A,B are partners in firm sharing profit and loss in the ratio 2:1. After all adjustments
their capitals are 45000 and 15000 respectively. C is admitted as new partner for share of
profit. He brings in 20000 as his share of capital. Now we need to ascertain the new capital of
partners on the basis of new profit sharing ratio.
Solution: C’s share
Total capital on basis of C’s share = 20,000 4
= 80,000
Remaining share = 1- =
New share of A =
New share of B = New profit sharing ratio = 6:3:3
= 2:1:1
Capital as per new profit sharing ratio:
A’s new capital = 80,000 = 40,000
B’s new capital = 80,000 = 20,000
A’s old capital is 4500 so he will withdraw 5000 to bring his capital to 40,000. B’s old capital is
15000 so he will bring in more 5000 to make his capital 20,000.
The following entry will be passed:
Page 6 of 85
Answer. To work out the capital of partners following steps are taken –
● First ascertain the total capital of firm on the basis of new partner’s share.
● Now ascertain the share of each partner on the total capital of firm on the basis of new
profit sharing ratio.
● Compare the new capital with old capital after make necessary adjustments.
● The partners whose capital fall short will bring more cash and whose have surplus will
withdraw the excess amount of capital through cash.
Example: A,B are partners in firm sharing profit and loss in the ratio 2:1. After all adjustments
their capitals are 45000 and 15000 respectively. C is admitted as new partner for share of
profit. He brings in 20000 as his share of capital. Now we need to ascertain the new capital of
partners on the basis of new profit sharing ratio.
Solution: C’s share
Total capital on basis of C’s share = 20,000 4
= 80,000
Remaining share = 1- =
New share of A =
New share of B = New profit sharing ratio = 6:3:3
= 2:1:1
Capital as per new profit sharing ratio:
A’s new capital = 80,000 = 40,000
B’s new capital = 80,000 = 20,000
A’s old capital is 4500 so he will withdraw 5000 to bring his capital to 40,000. B’s old capital is
15000 so he will bring in more 5000 to make his capital 20,000.
The following entry will be passed:
Page 6 of 85
Page 8
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
A’s capital A/c Dr. 5000 5000
To cash A/c
(Excess capital withdrawn.)
Cash A/c Dr. 5000 5000
To B’s capital A/c
(Cash brought by B.)
Page : 164 , Block Name : Long Answer Questions
Q5 Explain how will you deal with goodwill when new partner is not in a position to bring his
share of goodwill in cash.
Answer. The goodwill value is adjusted from the new partner’s capital account when the partner
is unable to bring goodwill in cash and is transferred to sacrificing partners in sacrificing ratio.
For example, A and B are partners in a firm sharing profit and loss in the ratio 2:1. They admit C
as a partner for share. C is unable to bring 5000 his share of goodwill in cash.
Sol.
C’s capital A/c Dr 6000
To A capital A/c 4000
To B capital A/c 2000
Page 7 of 85
A’s capital A/c Dr. 5000 5000
To cash A/c
(Excess capital withdrawn.)
Cash A/c Dr. 5000 5000
To B’s capital A/c
(Cash brought by B.)
Page : 164 , Block Name : Long Answer Questions
Q5 Explain how will you deal with goodwill when new partner is not in a position to bring his
share of goodwill in cash.
Answer. The goodwill value is adjusted from the new partner’s capital account when the partner
is unable to bring goodwill in cash and is transferred to sacrificing partners in sacrificing ratio.
For example, A and B are partners in a firm sharing profit and loss in the ratio 2:1. They admit C
as a partner for share. C is unable to bring 5000 his share of goodwill in cash.
Sol.
C’s capital A/c Dr 6000
To A capital A/c 4000
To B capital A/c 2000
Page 7 of 85
Page 9
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
(Being goodwill charged from capital A/c)
Page : 164 , Block Name : Long Answer Questions
Q6 Explain various methods for treatment of goodwill on admission of a new partner?
Answer. Goodwill is treated in two ways-
a) Premium method b) Revaluation method
a) Premium method: This method is followed when new partner brings in his share of goodwill in
cash. The goodwill amount is shared by sacrificing partners in their sacrificing ratio. If this
amount is paid to the partners privately no entry is made in the books of the firm.
The following journal entries are passed –
i) Cash A/c Dr
To premium for goodwill A/c
(Being goodwill brought by new partner)
ii) Premium for goodwill A/c Dr
To Sacrificing partner’s A/c
(Bring goodwill shared to the sacrificing partners
in sacrificing ratio)
Sometimes the partners may withdraw the amount then following entry is passed -
Page 8 of 85
(Being goodwill charged from capital A/c)
Page : 164 , Block Name : Long Answer Questions
Q6 Explain various methods for treatment of goodwill on admission of a new partner?
Answer. Goodwill is treated in two ways-
a) Premium method b) Revaluation method
a) Premium method: This method is followed when new partner brings in his share of goodwill in
cash. The goodwill amount is shared by sacrificing partners in their sacrificing ratio. If this
amount is paid to the partners privately no entry is made in the books of the firm.
The following journal entries are passed –
i) Cash A/c Dr
To premium for goodwill A/c
(Being goodwill brought by new partner)
ii) Premium for goodwill A/c Dr
To Sacrificing partner’s A/c
(Bring goodwill shared to the sacrificing partners
in sacrificing ratio)
Sometimes the partners may withdraw the amount then following entry is passed -
Page 8 of 85
Page 10
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Partner’s capital A/c Dr
To bank A/c
(Bing amount withdrawn)
b) Revaluation Method: This method is followed when partner does not bring his share of
goodwill in cash. Here the goodwill is charged from capital A/c and transferred to sacrificing
partners in sacrificing ratio. If at that time goodwill also exists in the books of accounts, then it is
written off in the old partner’s capital A/c.
Following journal entry is passed –
i) New partner’s capital A/c Dr
To sacrificing partner capital A/c
(Being new partner’s goodwill adjusted to his
capital and shared by sacrificing partners in
sacrificing ratio)
ii) Old partner’s capital A/c Dr
To goodwill A/c
(Being goodwill is books written off to old
partner’s capital A/c)
Page : 164 , Block Name : Long Answer Questions
Page 9 of 85
Partner’s capital A/c Dr
To bank A/c
(Bing amount withdrawn)
b) Revaluation Method: This method is followed when partner does not bring his share of
goodwill in cash. Here the goodwill is charged from capital A/c and transferred to sacrificing
partners in sacrificing ratio. If at that time goodwill also exists in the books of accounts, then it is
written off in the old partner’s capital A/c.
Following journal entry is passed –
i) New partner’s capital A/c Dr
To sacrificing partner capital A/c
(Being new partner’s goodwill adjusted to his
capital and shared by sacrificing partners in
sacrificing ratio)
ii) Old partner’s capital A/c Dr
To goodwill A/c
(Being goodwill is books written off to old
partner’s capital A/c)
Page : 164 , Block Name : Long Answer Questions
Page 9 of 85
Page 11
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Q7 How will you deal with the accumulated profits and losses and reserves on admission of a
new partner?
Answer. Accumulated profits and reserves are distributed to the old partners' capital a/c in their
old profit sharing ratio and losses are charged to the old partner’s capital a/c at time of
admission of the new partner. Following entries are made-
Particular L/F Dr amount Cr amount
i) Reserves/Profit A/c Dr
To old Partner’s capital A/c
(Being profit distributed to old partners in
old profit sharing ratio)
ii) Old partner’s capital A/c Dr
To losses A/c
To deferred advertisement A/c
(Being losses charged to old partner’s
capital A/c in old profit sharing ratio)
Page : 164 , Block Name : Long Answer Questions
Q8 At what figures the value of assets and liabilities appear in the books of the firm after
revaluation has been done. Show with the help of an imaginary balance sheet.
Page 10 of 85
Q7 How will you deal with the accumulated profits and losses and reserves on admission of a
new partner?
Answer. Accumulated profits and reserves are distributed to the old partners' capital a/c in their
old profit sharing ratio and losses are charged to the old partner’s capital a/c at time of
admission of the new partner. Following entries are made-
Particular L/F Dr amount Cr amount
i) Reserves/Profit A/c Dr
To old Partner’s capital A/c
(Being profit distributed to old partners in
old profit sharing ratio)
ii) Old partner’s capital A/c Dr
To losses A/c
To deferred advertisement A/c
(Being losses charged to old partner’s
capital A/c in old profit sharing ratio)
Page : 164 , Block Name : Long Answer Questions
Q8 At what figures the value of assets and liabilities appear in the books of the firm after
revaluation has been done. Show with the help of an imaginary balance sheet.
Page 10 of 85
Page 12
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. After revaluation has been done, the assets and liabilities appear at their current values
in the revised balance sheet.
Let us understand this with an imaginary illustration:
Opening Balance Sheet
Liabilities Amount Assets Amount
Bills payable 5000 Stock 15000
Creditors 10000 Debtors 40000
Capital Account: Furniture 30000
A : 37500 Bank 5000
B : 37500 75000
90000 90000
● The value of stock has increased by 3000.
● The reused value of furniture is 29000.
● Creditors of 1000 are not likely to arise.
● New partner brings in 20000 as capital for share.
Revaluation A/c
Particulars Amount Particulars Amount
To Furniture 1000 By stock 3000
To profit on revaluation: By creditors 1000
Page 11 of 85
Answer. After revaluation has been done, the assets and liabilities appear at their current values
in the revised balance sheet.
Let us understand this with an imaginary illustration:
Opening Balance Sheet
Liabilities Amount Assets Amount
Bills payable 5000 Stock 15000
Creditors 10000 Debtors 40000
Capital Account: Furniture 30000
A : 37500 Bank 5000
B : 37500 75000
90000 90000
● The value of stock has increased by 3000.
● The reused value of furniture is 29000.
● Creditors of 1000 are not likely to arise.
● New partner brings in 20000 as capital for share.
Revaluation A/c
Particulars Amount Particulars Amount
To Furniture 1000 By stock 3000
To profit on revaluation: By creditors 1000
Page 11 of 85
Page 13
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
A : 1500
B : 1500 3000
4000 4000
Partner capital A/c
Particulars A B Particulars A B
To bal c/d 39000 39000 By balance b/d 37500 37500
By profit on 1500 1500
revaluation
39000 39000 39000 39000
Revised Balance sheet
Liabilities Amount Assets Amount
Bills payable 5000 Stock 18000
Creditors 9000 Debtors 40000
Partner’s Capital: Furniture 29000
A : 39000 Bank 5000
Page 12 of 85
A : 1500
B : 1500 3000
4000 4000
Partner capital A/c
Particulars A B Particulars A B
To bal c/d 39000 39000 By balance b/d 37500 37500
By profit on 1500 1500
revaluation
39000 39000 39000 39000
Revised Balance sheet
Liabilities Amount Assets Amount
Bills payable 5000 Stock 18000
Creditors 9000 Debtors 40000
Partner’s Capital: Furniture 29000
A : 39000 Bank 5000
Page 12 of 85
Page 14
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
B : 39000 Add: Capital 20000 25000
C : 20000 98000
112000 112000
Page : 164 , Block Name : Long Answer Questions
Q1 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 share in the profits. Calculate the new profit sharing ratio? share in
the profits. Calculate the new profit sharing ratio?
Answer.
Old profit sharing ratio = 3:2
Share of C, new partner =
Let the total share be 1
Remaining share = 1- Remaining share = 1-
Now, will be divided in the ratio 3:2, will be divided in the ratio 3:2,
Therefore, share of A =
share of B =
Page 13 of 85
B : 39000 Add: Capital 20000 25000
C : 20000 98000
112000 112000
Page : 164 , Block Name : Long Answer Questions
Q1 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 share in the profits. Calculate the new profit sharing ratio? share in
the profits. Calculate the new profit sharing ratio?
Answer.
Old profit sharing ratio = 3:2
Share of C, new partner =
Let the total share be 1
Remaining share = 1- Remaining share = 1-
Now, will be divided in the ratio 3:2, will be divided in the ratio 3:2,
Therefore, share of A =
share of B =
Page 13 of 85
Page 15
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
share of C =
New profit sharing ratio = 15:10:5 New profit sharing ratio = 15:10:5
= 3:2:1.
Page : 164 , Block Name : Numerical Questions
Q2 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?
Answer.
Old profit sharing ratio = 3:2:1
D is admitted for 10% profit which is equal to
Let the total share of profits be 1
Share of D
Remaining share
share will be divided in the ratio 3:2:1 share will be divided in
the ratio 3:2:1
Share of A
Share of B
Share of C
Page 14 of 85
share of C =
New profit sharing ratio = 15:10:5 New profit sharing ratio = 15:10:5
= 3:2:1.
Page : 164 , Block Name : Numerical Questions
Q2 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?
Answer.
Old profit sharing ratio = 3:2:1
D is admitted for 10% profit which is equal to
Let the total share of profits be 1
Share of D
Remaining share
share will be divided in the ratio 3:2:1 share will be divided in
the ratio 3:2:1
Share of A
Share of B
Share of C
Page 14 of 85
Page 16
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Share of D
New profit sharing ratio = 27:18:9:6 New profit sharing ratio = 27:18:9:6
= 9:6:3:2
Page : 164 , Block Name : Numerical Questions
Q3 X and Y are partners sharing profits in 5:3 ratio admitted Z for share which he acquired
equally for X and Y. Calculate new profit sharing ratio? share which he acquired equally for X
and Y. Calculate new profit sharing ratio?
Answer.
Share of X and Y = 5:3
Share of Z
Sacrificing ratio of X and Y = 1:1
Share of X
Share of Y
Share of Z
New ratio = 92:52:16 New ratio = 92:52:16
= 23:13:4.
Page 15 of 85
Share of D
New profit sharing ratio = 27:18:9:6 New profit sharing ratio = 27:18:9:6
= 9:6:3:2
Page : 164 , Block Name : Numerical Questions
Q3 X and Y are partners sharing profits in 5:3 ratio admitted Z for share which he acquired
equally for X and Y. Calculate new profit sharing ratio? share which he acquired equally for X
and Y. Calculate new profit sharing ratio?
Answer.
Share of X and Y = 5:3
Share of Z
Sacrificing ratio of X and Y = 1:1
Share of X
Share of Y
Share of Z
New ratio = 92:52:16 New ratio = 92:52:16
= 23:13:4.
Page 15 of 85
Page 17
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Page : 164 , Block Name : Numerical Questions
Q4 A,B and C are partners sharing profits in 2:2:1 ratio admitted D for share which he
acquired entirely from A. Calculate new profit sharing ratio? share which he acquired entirely
from A. Calculate new profit sharing ratio?
Answer.
Old profit sharing ratio = 2:2:1
Share of D
New share of A
Share of B
Share of C
Share of D
New ratio = 11:16:8:5. New ratio = 11:16:8:5.
Page : 165 , Block Name : Numerical Questions
Q5 P and Q are partners sharing profits in 2:1 ratio. They admitted R into partnership giving him
share which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio? share
which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio?
Page 16 of 85
Page : 164 , Block Name : Numerical Questions
Q4 A,B and C are partners sharing profits in 2:2:1 ratio admitted D for share which he
acquired entirely from A. Calculate new profit sharing ratio? share which he acquired entirely
from A. Calculate new profit sharing ratio?
Answer.
Old profit sharing ratio = 2:2:1
Share of D
New share of A
Share of B
Share of C
Share of D
New ratio = 11:16:8:5. New ratio = 11:16:8:5.
Page : 165 , Block Name : Numerical Questions
Q5 P and Q are partners sharing profits in 2:1 ratio. They admitted R into partnership giving him
share which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio? share
which he acquired from P and Q in 1:2 ratio. Calculate new profit sharing ratio?
Page 16 of 85
Page 18
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer.
Old ratio (given) = 2:1
Share of R
Sacrificing ratio of:
P
Q
New share = Old share – Sacrificing share
New share of P New share of P
New share of Q
Share of R
New profit sharing ratio = 9:3:3 New profit sharing ratio = 9:3:3
= 3:1:1.
Page : 165 , Block Name : Numerical Questions
Q6 A, B and C are partners sharing profits in 3:2:2 ratio. They admitted D as a new partner for
share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate new profit
sharing ratio? share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate
new profit sharing ratio?
Answer.
Page 17 of 85
Answer.
Old ratio (given) = 2:1
Share of R
Sacrificing ratio of:
P
Q
New share = Old share – Sacrificing share
New share of P New share of P
New share of Q
Share of R
New profit sharing ratio = 9:3:3 New profit sharing ratio = 9:3:3
= 3:1:1.
Page : 165 , Block Name : Numerical Questions
Q6 A, B and C are partners sharing profits in 3:2:2 ratio. They admitted D as a new partner for
share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate new profit
sharing ratio? share which he acquired from A, B and C in 2:2:1 ratio respectively. Calculate
new profit sharing ratio?
Answer.
Page 17 of 85
Page 19
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Old profit sharing ratio = 3:2:2
Share of D
Sacrificing ratio of:
A
B
C
New ratio = old ratio – sacrificing ratio New ratio = old ratio – sacrificing ratio
New share of A New share of A
New share of B
New share of C
Share of D
New profit sharing ratio = 61:36:43:35. New profit sharing ratio = 61:36:43:35.
Page : 165 , Block Name : Numerical Questions
Q7 A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for share
which he took from A and from B. Calculate new profit sharing ratio? share which he took
from A and from B. Calculate new profit sharing ratio?
Page 18 of 85
Old profit sharing ratio = 3:2:2
Share of D
Sacrificing ratio of:
A
B
C
New ratio = old ratio – sacrificing ratio New ratio = old ratio – sacrificing ratio
New share of A New share of A
New share of B
New share of C
Share of D
New profit sharing ratio = 61:36:43:35. New profit sharing ratio = 61:36:43:35.
Page : 165 , Block Name : Numerical Questions
Q7 A and B were partners in a firm sharing profits in 3:2 ratio. They admitted C for share
which he took from A and from B. Calculate new profit sharing ratio? share which he took
from A and from B. Calculate new profit sharing ratio?
Page 18 of 85
Page 20
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer.
Old profit sharing ratio = 3:2
Share of C
New share of A
New share of B
Share of C
New profit sharing ratio = 11:9:15. New profit sharing ratio = 11:9:15.
Page : 165 , Block Name : Numerical Questions
Q8 A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new
partner for profit. D acquired his share from A. from B and from C. Calculate new
profit sharing ratio? profit. D acquired his share from A. from B and from C. Calculate
new profit sharing ratio?
Answer.
Old profit sharing ratio = 3:2:2
Share of D
Sacrificing ratio of A,B,C
Page 19 of 85
Answer.
Old profit sharing ratio = 3:2
Share of C
New share of A
New share of B
Share of C
New profit sharing ratio = 11:9:15. New profit sharing ratio = 11:9:15.
Page : 165 , Block Name : Numerical Questions
Q8 A, B and C were partners in a firm sharing profits in 3:3:2 ratio. They admitted D as a new
partner for profit. D acquired his share from A. from B and from C. Calculate new
profit sharing ratio? profit. D acquired his share from A. from B and from C. Calculate
new profit sharing ratio?
Answer.
Old profit sharing ratio = 3:2:2
Share of D
Sacrificing ratio of A,B,C
Page 19 of 85
Page 21
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
New share = old share – sacrificing share
New share of A New share of A
New share of B
New share of C
New profit sharing ratio = 5:13:6:32. New profit sharing ratio = 5:13:6:32.
Page : 165 , Block Name : Numerical Questions
Q9 Radha and Rukmani are partners in a firm sharing profits in 3:2 ratio. They admitted Gopi as
a new partner. Radha surrendered of her share in favour of Gopi and Rukmani surrendered
of her share in favour of Gopi. Calculate new profit sharing ratio? of her share in favour of
Gopi and Rukmani surrendered of her share in favour of Gopi. Calculate new profit sharing
ratio?
Answer. Old profit sharing ratio = 3:2
Sacrificing share of Radha = rd of share rd of share
Sacrificing ratio of Rukmani th of share th of share th of share
Page 20 of 85
New share = old share – sacrificing share
New share of A New share of A
New share of B
New share of C
New profit sharing ratio = 5:13:6:32. New profit sharing ratio = 5:13:6:32.
Page : 165 , Block Name : Numerical Questions
Q9 Radha and Rukmani are partners in a firm sharing profits in 3:2 ratio. They admitted Gopi as
a new partner. Radha surrendered of her share in favour of Gopi and Rukmani surrendered
of her share in favour of Gopi. Calculate new profit sharing ratio? of her share in favour of
Gopi and Rukmani surrendered of her share in favour of Gopi. Calculate new profit sharing
ratio?
Answer. Old profit sharing ratio = 3:2
Sacrificing share of Radha = rd of share rd of share
Sacrificing ratio of Rukmani th of share th of share th of share
Page 20 of 85
Page 22
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
New share = old share – sacrificing share New share = old share – sacrificing share New
share = old share – sacrificing share
New share of Radha New share of Radha
New share of Radha
New share of Rukmani
New share of Gopi
New ratio = 120:90:90 New ratio = 120:90:90 New ratio = 120:90:90
= 40:30:30
=4:3:3.
Page : 165 , Block Name : Numerical Questions
Q10 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 of his share in favour of Jain: Gupta surrendered
of his share in favour of Jain and Khan surrendered in favour of Jain. Calculate new profit
sharing ratio? of his share in favour of Jain: Gupta surrendered of his share in favour of Jain
and Khan surrendered in favour of Jain. Calculate new profit sharing ratio? of his share in
Page 21 of 85
New share = old share – sacrificing share New share = old share – sacrificing share New
share = old share – sacrificing share
New share of Radha New share of Radha
New share of Radha
New share of Rukmani
New share of Gopi
New ratio = 120:90:90 New ratio = 120:90:90 New ratio = 120:90:90
= 40:30:30
=4:3:3.
Page : 165 , Block Name : Numerical Questions
Q10 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 of his share in favour of Jain: Gupta surrendered
of his share in favour of Jain and Khan surrendered in favour of Jain. Calculate new profit
sharing ratio? of his share in favour of Jain: Gupta surrendered of his share in favour of Jain
and Khan surrendered in favour of Jain. Calculate new profit sharing ratio? of his share in
Page 21 of 85
Page 23
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
favour of Jain: Gupta surrendered of his share in favour of Jain and Khan surrendered in
favour of Jain. Calculate new profit sharing ratio?
Answer. Old profit sharing ratio = 3:2:3
Share sacrificed by:
Singh rd of his share rd of his share rd of his
share
Gupta of his share of his share of his share
Khan of his share of his share of his share
New profit share = old share – sacrificing share New profit share = old share – sacrificing
share New profit share = old share – sacrificing share
New share of Singh
New share of Gupta
New share of Khan
Page 22 of 85
favour of Jain: Gupta surrendered of his share in favour of Jain and Khan surrendered in
favour of Jain. Calculate new profit sharing ratio?
Answer. Old profit sharing ratio = 3:2:3
Share sacrificed by:
Singh rd of his share rd of his share rd of his
share
Gupta of his share of his share of his share
Khan of his share of his share of his share
New profit share = old share – sacrificing share New profit share = old share – sacrificing
share New profit share = old share – sacrificing share
New share of Singh
New share of Gupta
New share of Khan
Page 22 of 85
Page 24
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
New share of Jain
New ratio New ratio New ratio
= 40:30:48:42
= 20:15:24:21.
Page : 165 , Block Name : Numerical Questions
Q11 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?
Answer. Old ratio = 5:3
New ratio = 4:2:1
Sacrificing ratio = old ratio – new ratio
Sacrificing ratio of: Sacrificing ratio of: Sacrificing ratio of:
Sandeep
Navdeep
Sacrificing ratio =3:5.
Page : 165 , Block Name : Numerical Questions
Page 23 of 85
New share of Jain
New ratio New ratio New ratio
= 40:30:48:42
= 20:15:24:21.
Page : 165 , Block Name : Numerical Questions
Q11 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?
Answer. Old ratio = 5:3
New ratio = 4:2:1
Sacrificing ratio = old ratio – new ratio
Sacrificing ratio of: Sacrificing ratio of: Sacrificing ratio of:
Sandeep
Navdeep
Sacrificing ratio =3:5.
Page : 165 , Block Name : Numerical Questions
Page 23 of 85
Page 25
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Q12 Rao and Swami are partners in a firm sharing profits and losses in 3:2 ratio. They admit
Ravi as a new partner for share in the profits. The new profit sharing ratio between Rao and
Swami is 4:3. Calculate new profit sharing ratio and sacrificing ratio? share in the profits. The
new profit sharing ratio between Rao and Swami is 4:3. Calculate new profit sharing ratio and
sacrificing ratio? share in the profits. The new profit sharing ratio between Rao and Swami is
4:3. Calculate new profit sharing ratio and sacrificing ratio?
Answer. Old ratio = 3:2
Ravi’s share
Remaining share
This 7 will be shared by rao swami in the ratio 4:3.
Rao’s new share Rao’s new share Rao’s new share
Swami’s new share
New profit sharing ratio = 4:3:1 New profit sharing ratio = 4:3:1 New profit sharing ratio
= 4:3:1
Rao’s sacrifice
Swami’s sacrifice
Therefore, sacrificing ratio = 4:1.
Page 24 of 85
Q12 Rao and Swami are partners in a firm sharing profits and losses in 3:2 ratio. They admit
Ravi as a new partner for share in the profits. The new profit sharing ratio between Rao and
Swami is 4:3. Calculate new profit sharing ratio and sacrificing ratio? share in the profits. The
new profit sharing ratio between Rao and Swami is 4:3. Calculate new profit sharing ratio and
sacrificing ratio? share in the profits. The new profit sharing ratio between Rao and Swami is
4:3. Calculate new profit sharing ratio and sacrificing ratio?
Answer. Old ratio = 3:2
Ravi’s share
Remaining share
This 7 will be shared by rao swami in the ratio 4:3.
Rao’s new share Rao’s new share Rao’s new share
Swami’s new share
New profit sharing ratio = 4:3:1 New profit sharing ratio = 4:3:1 New profit sharing ratio
= 4:3:1
Rao’s sacrifice
Swami’s sacrifice
Therefore, sacrificing ratio = 4:1.
Page 24 of 85
Page 26
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Page : 165 , Block Name : Numerical Questions
Q13 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:
Rs.
2013 40,000
2014 50,000
2015 60,000
2016 50,000
2017 60,000
Answer. Average profit
Goodwill = 4 year purchase of average profit
=4 52000 52000 52000
= 208000.
Page : 165 , Block Name : Numerical Questions
Page 25 of 85
Page : 165 , Block Name : Numerical Questions
Q13 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:
Rs.
2013 40,000
2014 50,000
2015 60,000
2016 50,000
2017 60,000
Answer. Average profit
Goodwill = 4 year purchase of average profit
=4 52000 52000 52000
= 208000.
Page : 165 , Block Name : Numerical Questions
Page 25 of 85
Page 27
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Q14 Capital employed in a business is Rs. 2,00,000. The normal rate of return on capital
employed 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?
Answer. Capital employed = 200000
Normal rate of return = 15%
Profit earned = 48,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 30,000
Super profit = 48000 – 30000 Super profit = 48000 – 30000 Super profit = 48000 –
30000
= 18000
Goodwill =18000 3 3 3
= 54000.
Page : 166 , Block Name : Numerical Questions
Q15 The books of Ram and Bharat showed that the capital employed 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%?
Answer. Capital employed = 5,00,000
Page 26 of 85
Q14 Capital employed in a business is Rs. 2,00,000. The normal rate of return on capital
employed 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?
Answer. Capital employed = 200000
Normal rate of return = 15%
Profit earned = 48,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 30,000
Super profit = 48000 – 30000 Super profit = 48000 – 30000 Super profit = 48000 –
30000
= 18000
Goodwill =18000 3 3 3
= 54000.
Page : 166 , Block Name : Numerical Questions
Q15 The books of Ram and Bharat showed that the capital employed 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%?
Answer. Capital employed = 5,00,000
Page 26 of 85
Page 28
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Normal rate of return = 10%
Profit earned = 48,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 50,000
Average profit of 5 years
= 60000
Super profit = 60000 – 50000 Super profit = 60000 – 50000 Super profit = 60000 –
50000
= 10000
Goodwill =10000 3 3 3
= 30000.
Page : 166 , Block Name : Numerical Questions
Q16 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 assuming that the normal rate of return is 20%?
Page 27 of 85
Normal rate of return = 10%
Profit earned = 48,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 50,000
Average profit of 5 years
= 60000
Super profit = 60000 – 50000 Super profit = 60000 – 50000 Super profit = 60000 –
50000
= 10000
Goodwill =10000 3 3 3
= 30000.
Page : 166 , Block Name : Numerical Questions
Q16 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 assuming that the normal rate of return is 20%?
Page 27 of 85
Page 29
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. Capital of Rajan = 3,00,000
Capital of Rajani = 2,00,000
Normal rate of return = 20%
Profit earned = 1,50,000
Total capital employed
= 5,00,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 1,00,000
Super profit = 150000 – 100000
= 50000
Goodwill
= 250000.
Page : 166 , Block Name : Numerical Questions
Q17 A business has earned average profits of Rs. 1,00,000 during the last few years. Find out
the value of goodwill by capitalization 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%?
Page 28 of 85
Answer. Capital of Rajan = 3,00,000
Capital of Rajani = 2,00,000
Normal rate of return = 20%
Profit earned = 1,50,000
Total capital employed
= 5,00,000
Normal profit = Normal rate of return capital employed capital employed capital
employed
= 1,00,000
Super profit = 150000 – 100000
= 50000
Goodwill
= 250000.
Page : 166 , Block Name : Numerical Questions
Q17 A business has earned average profits of Rs. 1,00,000 during the last few years. Find out
the value of goodwill by capitalization 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%?
Page 28 of 85
Page 30
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. Average profits = 1,00,000
Assets = 10,00,000
External rate of return = 1,80,000
Normal rate of return =10%
Now,
Capitalized value of average profit
=10,00,000
Net assets = Assets – External liabilities
= 10,00,000 -1,80,000
= 8,20,000
Goodwill = Capitalized value – Net Assets Goodwill = Capitalized value – Net Assets
Goodwill = Capitalized value – Net Assets
= 10,00,000 – 8,20,000
=1,80,000.
Page : 166 , Block Name : Numerical Questions
Q18 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 share of profits. Ghosh is to bring in Rs. 20,000 as
Page 29 of 85
Answer. Average profits = 1,00,000
Assets = 10,00,000
External rate of return = 1,80,000
Normal rate of return =10%
Now,
Capitalized value of average profit
=10,00,000
Net assets = Assets – External liabilities
= 10,00,000 -1,80,000
= 8,20,000
Goodwill = Capitalized value – Net Assets Goodwill = Capitalized value – Net Assets
Goodwill = Capitalized value – Net Assets
= 10,00,000 – 8,20,000
=1,80,000.
Page : 166 , Block Name : Numerical Questions
Q18 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 share of profits. Ghosh is to bring in Rs. 20,000 as
Page 29 of 85
Page 31
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
capital and Rs. 4,000 as his share of goodwill premium. Give the necessary journal entries:
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: 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 50% of the amount of goodwill is withdrawn.
d) When goodwill is paid privately.
Answer. Old profit sharing ratio = 5:3
Share of ghost
Remaining share
This 4 will be shared between verma and sharma in ratio 5:3.
New share of verma or or or
New share of sharma or or or
New ratio = 20:12:8
= 5:3:2
Sacrifice of verma or or or
Page 30 of 85
capital and Rs. 4,000 as his share of goodwill premium. Give the necessary journal entries:
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: 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 50% of the amount of goodwill is withdrawn.
d) When goodwill is paid privately.
Answer. Old profit sharing ratio = 5:3
Share of ghost
Remaining share
This 4 will be shared between verma and sharma in ratio 5:3.
New share of verma or or or
New share of sharma or or or
New ratio = 20:12:8
= 5:3:2
Sacrifice of verma or or or
Page 30 of 85
Page 32
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Sacrifice of sharma
Sacrificing ratio = 10:6 = 5:3 Sacrificing ratio = 10:6 = 5:3 Sacrificing ratio = 10:6 = 5:3
a) When the amount of goodwill is retained in business.
Particulars L/F Dr amount Cr amount
₹ ₹
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
b) When the amount of goodwill is fully withdrawn.
Particulars L/F Dr amount Cr amount
₹ ₹
Page 31 of 85
Sacrifice of sharma
Sacrificing ratio = 10:6 = 5:3 Sacrificing ratio = 10:6 = 5:3 Sacrificing ratio = 10:6 = 5:3
a) When the amount of goodwill is retained in business.
Particulars L/F Dr amount Cr amount
₹ ₹
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
b) When the amount of goodwill is fully withdrawn.
Particulars L/F Dr amount Cr amount
₹ ₹
Page 31 of 85
Page 33
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
Verma's capital A/c Dr 2500
Sharma's capital A/c Dr 1500
To Bank A/c 4000
(Being goodwill withdrawn)
c) When 50% of the amount of goodwill is withdrawn.
Particulars L/F Dr amount Cr amount
₹ ₹
Page 32 of 85
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
Verma's capital A/c Dr 2500
Sharma's capital A/c Dr 1500
To Bank A/c 4000
(Being goodwill withdrawn)
c) When 50% of the amount of goodwill is withdrawn.
Particulars L/F Dr amount Cr amount
₹ ₹
Page 32 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
Verma's capital A/c Dr 1250
Sharma's capital A/c Dr 750
To Bank A/c 2000
(Being 50% of amount withdrawn)
d) When goodwill is paid privately.
Particulars L/F Dr amount Cr amount
₹ ₹
Bank A/c Dr 20000
To Ghosh's capital A/c 20000
(Being capital brought in cash)
Page 33 of 85
Bank A/c Dr 24000
To Ghosh's capital A/c 20000
To premium for goodwill A/c 4000
(Being capital and goodwill brought in cash)
Premium for goodwill A/c Dr 4000
To Verma's capital A/c 2500
To Sharma's capital A/c 1500
(Being goodwill shared by old partners in sacrificing
ratio 5:3)
Verma's capital A/c Dr 1250
Sharma's capital A/c Dr 750
To Bank A/c 2000
(Being 50% of amount withdrawn)
d) When goodwill is paid privately.
Particulars L/F Dr amount Cr amount
₹ ₹
Bank A/c Dr 20000
To Ghosh's capital A/c 20000
(Being capital brought in cash)
Page 33 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Note: No entry for goodwill is done if paid privately.
Page : 166 , Block Name : Numerical Questions
Q19 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 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 entries? 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 entries? 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 entries?
Answer. Sacrifice of A
Sacrifice of B
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Goodwill of firm = 20,000
C’s share of goodwill
= 5000
Journal entries
Particulars L/F Dr amount Cr amount
Page 34 of 85
Note: No entry for goodwill is done if paid privately.
Page : 166 , Block Name : Numerical Questions
Q19 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 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 entries? 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 entries? 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 entries?
Answer. Sacrifice of A
Sacrifice of B
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Goodwill of firm = 20,000
C’s share of goodwill
= 5000
Journal entries
Particulars L/F Dr amount Cr amount
Page 34 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
₹ ₹
i) Bank A/c Dr 35000
To C’s capital A/c 30000
To Premium for goodwill A/c 5000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 5000
To A’s capital A/c 2000
To B’s capital A/c 3000
(Being goodwill distributed in sacrificing ratio
i.e, 2:3)
iii) A’s capital A/c Dr 2000
B’s capital A/c Dr 3000
To Bank A/c 5000
(Being amount withdrawn by the partners).
Page : 166 , Block Name : Numerical Questions
Q20 Arti and Bharti are partners in a firm sharing profits in 3:2 ratio, They admitted Sarthi for
share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for
Page 35 of 85
₹ ₹
i) Bank A/c Dr 35000
To C’s capital A/c 30000
To Premium for goodwill A/c 5000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 5000
To A’s capital A/c 2000
To B’s capital A/c 3000
(Being goodwill distributed in sacrificing ratio
i.e, 2:3)
iii) A’s capital A/c Dr 2000
B’s capital A/c Dr 3000
To Bank A/c 5000
(Being amount withdrawn by the partners).
Page : 166 , Block Name : Numerical Questions
Q20 Arti and Bharti are partners in a firm sharing profits in 3:2 ratio, They admitted Sarthi for
share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for
Page 35 of 85
Page 37
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
his 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 entries in the books of the new firm? share in the profits of the firm. Sarthi
brings Rs. 50,000 for his capital and Rs. 10,000 for his 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 entries in the books of the new
firm? share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for
his 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 entries in the books of the new firm?
Answer. Sacrificing share = Old share – New share
Sacrifice by Arti
Sacrifice by Bharti
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
Page 36 of 85
his 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 entries in the books of the new firm? share in the profits of the firm. Sarthi
brings Rs. 50,000 for his capital and Rs. 10,000 for his 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 entries in the books of the new
firm? share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for
his 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 entries in the books of the new firm?
Answer. Sacrificing share = Old share – New share
Sacrifice by Arti
Sacrifice by Bharti
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
Page 36 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) Bank A/c Dr 60000
To Sarthi’s capital A/c 50000
To Premium for goodwill A/c 10000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 10000
To Arti’s capital A/c 4000
To Bharti’s capital A/c 6000
(Being goodwill distributed in sacrificing ratio
i.e, 2:3)
iii) Arti’s capital A/c Dr 3000
Bharti’s capital A/c Dr 2000
To Goodwill A/c 5000
(Being goodwill in the books distributed to
old partners in the old profit sharing ratio
3:2).
Page : 166 , Block Name : Numerical Question
Q21 X and Y are partners in a firm sharing profits and losses in 4:3 ratio. They admitted Z for
share. Z brought Rs.20,000 for his capital and Rs.7,000 for his
Page 37 of 85
i) Bank A/c Dr 60000
To Sarthi’s capital A/c 50000
To Premium for goodwill A/c 10000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 10000
To Arti’s capital A/c 4000
To Bharti’s capital A/c 6000
(Being goodwill distributed in sacrificing ratio
i.e, 2:3)
iii) Arti’s capital A/c Dr 3000
Bharti’s capital A/c Dr 2000
To Goodwill A/c 5000
(Being goodwill in the books distributed to
old partners in the old profit sharing ratio
3:2).
Page : 166 , Block Name : Numerical Question
Q21 X and Y are partners in a firm sharing profits and losses in 4:3 ratio. They admitted Z for
share. Z brought Rs.20,000 for his capital and Rs.7,000 for his
Page 37 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
share of goodwill. Subsequently X, Y and Z decided to show goodwill
in their books at Rs.40,000. Show necessary journal entries in the books of X, Y and Z?
share. Z brought Rs.20,000 for his capital and Rs.7,000 for his share of goodwill.
Subsequently X, Y and Z decided to show goodwill in their books at Rs.40,000. Show necessary
journal entries in the books of X, Y and Z? share. Z brought Rs.20,000 for his
capital and Rs.7,000 for his share of goodwill. Subsequently X, Y and Z decided
to show goodwill in their books at Rs.40,000. Show necessary journal entries in the books of X,
Y and Z?
Answer. Old ratio = 4:3
Z share
Remaining share
This share will be distributed in X and Y in ratio 4:3. share will be distributed in X and Y in
ratio 4:3. share will be distributed in X and Y in ratio 4:3.
X new share X new share X new
share
Y new share
Page 38 of 85
share of goodwill. Subsequently X, Y and Z decided to show goodwill
in their books at Rs.40,000. Show necessary journal entries in the books of X, Y and Z?
share. Z brought Rs.20,000 for his capital and Rs.7,000 for his share of goodwill.
Subsequently X, Y and Z decided to show goodwill in their books at Rs.40,000. Show necessary
journal entries in the books of X, Y and Z? share. Z brought Rs.20,000 for his
capital and Rs.7,000 for his share of goodwill. Subsequently X, Y and Z decided
to show goodwill in their books at Rs.40,000. Show necessary journal entries in the books of X,
Y and Z?
Answer. Old ratio = 4:3
Z share
Remaining share
This share will be distributed in X and Y in ratio 4:3. share will be distributed in X and Y in
ratio 4:3. share will be distributed in X and Y in ratio 4:3.
X new share X new share X new
share
Y new share
Page 38 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
New profit sharing ratio = 28:21:7 New profit sharing ratio = 28:21:7
New profit sharing ratio = 28:21:7
= 4:3:1
Sacrifice by X
Sacrifice by Y
Sacrificing ratio = 4:3 Sacrificing ratio = 4:3 Sacrificing ratio = 4:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Bank A/c Dr 27000
To Z’s capital A/c 20000
To Premium for goodwill A/c 7000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 7000
To X’s capital A/c 4000
To Y’s capital A/c 3000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio 4:3)
Page 39 of 85
New profit sharing ratio = 28:21:7 New profit sharing ratio = 28:21:7
New profit sharing ratio = 28:21:7
= 4:3:1
Sacrifice by X
Sacrifice by Y
Sacrificing ratio = 4:3 Sacrificing ratio = 4:3 Sacrificing ratio = 4:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Bank A/c Dr 27000
To Z’s capital A/c 20000
To Premium for goodwill A/c 7000
(Being capital and goodwill brought in by
new partner)
ii) Premium for goodwill A/c Dr 7000
To X’s capital A/c 4000
To Y’s capital A/c 3000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio 4:3)
Page 39 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Page : 167 , Block Name : Numerical Questions
Q22 Aditya and Balan are partners sharing profits and losses in 3:2 ratio. They admitted
Christopher for 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 firm? 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 firm? 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 firm?
Answer. Old ratio = 3:2
New ratio = 2:1:1
Sacrifice share =Old ratio – new ratio
Sacrifice by Aditya
Sacrifice by Balan
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
Page 40 of 85
Page : 167 , Block Name : Numerical Questions
Q22 Aditya and Balan are partners sharing profits and losses in 3:2 ratio. They admitted
Christopher for 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 firm? 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 firm? 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 firm?
Answer. Old ratio = 3:2
New ratio = 2:1:1
Sacrifice share =Old ratio – new ratio
Sacrifice by Aditya
Sacrifice by Balan
Sacrificing ratio = 2:3 Sacrificing ratio = 2:3 Sacrificing ratio = 2:3
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
Page 40 of 85
Page 42
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) Bank A/c Dr 50000
To Christopher’s capital A/c 50000
(Being capital brought in by new partner)
ii) Bank A/c Dr 10000
Christopher’s capital A/c Dr 5000
To Premium for goodwill A/c 15000
(Being goodwill brought in cash and
remaining goodwill amount adjusted to his
capital account)
iii) Premium for goodwill A/c Dr 15000
To Aditya’s capital A/c 6000
To Balan’s capital A/c 9000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio 2:3).
Page : 167 , Block Name : Numerical Questions
Q23 Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They
admitted Kanwar for 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
Page 41 of 85
i) Bank A/c Dr 50000
To Christopher’s capital A/c 50000
(Being capital brought in by new partner)
ii) Bank A/c Dr 10000
Christopher’s capital A/c Dr 5000
To Premium for goodwill A/c 15000
(Being goodwill brought in cash and
remaining goodwill amount adjusted to his
capital account)
iii) Premium for goodwill A/c Dr 15000
To Aditya’s capital A/c 6000
To Balan’s capital A/c 9000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio 2:3).
Page : 167 , Block Name : Numerical Questions
Q23 Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They
admitted Kanwar for 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
Page 41 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
necessary journal entry for goodwill on Kanwar’s admission. 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.
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.
Answer. Old ratio = 3:1
Kanwar’s share
Sacrificing ratio = 3:1
(When nothing is mentioned, the old ratio is taken as sacrificing ratio).
Goodwill of firm = 80000
Goodwill of kanwar Goodwill of kanwar
Goodwill of kanwar
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Kanwar’s capital A/c Dr 20000
To Premium for goodwill A/c
(Being goodwill brought adjusted to 20000
capital account as not brought in cash)
Page 42 of 85
necessary journal entry for goodwill on Kanwar’s admission. 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.
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.
Answer. Old ratio = 3:1
Kanwar’s share
Sacrificing ratio = 3:1
(When nothing is mentioned, the old ratio is taken as sacrificing ratio).
Goodwill of firm = 80000
Goodwill of kanwar Goodwill of kanwar
Goodwill of kanwar
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Kanwar’s capital A/c Dr 20000
To Premium for goodwill A/c
(Being goodwill brought adjusted to 20000
capital account as not brought in cash)
Page 42 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
ii) Premium for goodwill A/c Dr 20000
To Amar’s capital A/c 15000
To Samar’s capital A/c 5000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio).
Page : 167 , Block Name : Numerical Questions
Q24 Mohan Lal and Sohan Lal were partners in a firm sharing profits and losses in 3:2 ratio.
They admitted Ram Lal for 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 premium in cash. Record the necessary journal entries in the books of the firm
on Ram Lal’s admission when: 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 premium in cash. Record the necessary journal entries in the books of the
firm on Ram Lal’s admission when: 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 premium in cash. Record the necessary journal entries in the books
of the firm on Ram Lal’s admission when:
a) Goodwill already appears in the books at Rs.2,02,500.
b) Goodwill appears in the books at Rs.2,500.
c) Goodwill appears in the books at Rs.2,05,000.
Page 43 of 85
ii) Premium for goodwill A/c Dr 20000
To Amar’s capital A/c 15000
To Samar’s capital A/c 5000
(Being goodwill distributed to sacrificing
partners in sacrificing ratio).
Page : 167 , Block Name : Numerical Questions
Q24 Mohan Lal and Sohan Lal were partners in a firm sharing profits and losses in 3:2 ratio.
They admitted Ram Lal for 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 premium in cash. Record the necessary journal entries in the books of the firm
on Ram Lal’s admission when: 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 premium in cash. Record the necessary journal entries in the books of the
firm on Ram Lal’s admission when: 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 premium in cash. Record the necessary journal entries in the books
of the firm on Ram Lal’s admission when:
a) Goodwill already appears in the books at Rs.2,02,500.
b) Goodwill appears in the books at Rs.2,500.
c) Goodwill appears in the books at Rs.2,05,000.
Page 43 of 85
Page 45
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Answer. Old ratio = 3:2
Sacrificing ratio will also be 3:2 since nothing is mentioned in question.
Average profit
= 67,500
Goodwill = 3 67500 = 2,02500 67500 = 2,02500 67500 = 2,02500
Ram lal’s share of goodwill
= Rs. 50625
a) Goodwill appear in the books at Rs. 202500
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal’s capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 44 of 85
Answer. Old ratio = 3:2
Sacrificing ratio will also be 3:2 since nothing is mentioned in question.
Average profit
= 67,500
Goodwill = 3 67500 = 2,02500 67500 = 2,02500 67500 = 2,02500
Ram lal’s share of goodwill
= Rs. 50625
a) Goodwill appear in the books at Rs. 202500
Journal entries in the book of –
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal’s capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 44 of 85
Page 46
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
ii) Mohan lal’s capital A/c Dr 121500
Sohan lal’s capital A/c Dr 81000
To goodwill A/c 202500
(Being goodwill appearing in books
distributed to old partners)
b) Goodwill appear in the books at Rs 2500
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal's capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 45 of 85
ii) Mohan lal’s capital A/c Dr 121500
Sohan lal’s capital A/c Dr 81000
To goodwill A/c 202500
(Being goodwill appearing in books
distributed to old partners)
b) Goodwill appear in the books at Rs 2500
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal's capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 45 of 85
Page 47
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
ii) Mohan lal’s capital A/c Dr 1500
Sohan lal’s capital A/c Dr 1000
To goodwill A/c 2500
(Being goodwill appearing in books
distributed to old partners in old ratio
3:2)
c) Goodwill appear in books at Rs 205000.
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal’s capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 46 of 85
ii) Mohan lal’s capital A/c Dr 1500
Sohan lal’s capital A/c Dr 1000
To goodwill A/c 2500
(Being goodwill appearing in books
distributed to old partners in old ratio
3:2)
c) Goodwill appear in books at Rs 205000.
Particulars L/F Dr amount Cr amount
₹ ₹
i) Ram Lal’s capital A/c Dr 50625
To Mohan lal’s capital A/c 30375
To Sohan lal’s capital A/c 20250
(Being ram lal’s share of goodwill
charges from his capital and distributed
to sacrificing partners in sacrificing ratio)
Page 46 of 85
Page 48
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
ii) Mohan lal’s capital A/c Dr 123000
Sohan lal’s capital A/c Dr 82000
To goodwill A/c 202000
(Being goodwill appearing in books
distributed to old partners in old ratio 3:2)
Page : 167 , Block Name : Numerical Questions
Q25 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 the treatment of goodwill on Hari’s admission.
Answer. Old ratio = 1:1
New ratio = 4:3:2
Sacrificing by Rajesh
Sacrificing by Mukesh
Sacrificing ratio = 1:3
Hari’s share of goodwill
Journal entries
Page 47 of 85
ii) Mohan lal’s capital A/c Dr 123000
Sohan lal’s capital A/c Dr 82000
To goodwill A/c 202000
(Being goodwill appearing in books
distributed to old partners in old ratio 3:2)
Page : 167 , Block Name : Numerical Questions
Q25 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 the treatment of goodwill on Hari’s admission.
Answer. Old ratio = 1:1
New ratio = 4:3:2
Sacrificing by Rajesh
Sacrificing by Mukesh
Sacrificing ratio = 1:3
Hari’s share of goodwill
Journal entries
Page 47 of 85
Page 49
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Particulars L/F Dr amount Cr amount
₹ ₹
i) Hari’s capital A/c Dr 8000
To Rajesh’s capital A/c 2000
To Mukesh’s capital A/c 6000
(Being goodwill charges to new partner’s
capital account and distributed to
sacrificing partners in sacrificing ratio)
Page : 167 , Block Name : Numerical Questions
Q26 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?
Answer. Old ratio = 1:1
New ratio = 4:3:2
Sacrificing ratio = old ratio – new ratio
Sacrifice by amar Sacrifice by amar
Sacrifice by amar
Sacrifice by akbar
Page 48 of 85
Particulars L/F Dr amount Cr amount
₹ ₹
i) Hari’s capital A/c Dr 8000
To Rajesh’s capital A/c 2000
To Mukesh’s capital A/c 6000
(Being goodwill charges to new partner’s
capital account and distributed to
sacrificing partners in sacrificing ratio)
Page : 167 , Block Name : Numerical Questions
Q26 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?
Answer. Old ratio = 1:1
New ratio = 4:3:2
Sacrificing ratio = old ratio – new ratio
Sacrifice by amar Sacrifice by amar
Sacrifice by amar
Sacrifice by akbar
Page 48 of 85
Page 50
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Sacrificing ratio = 1:3
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) Anthony’s capital A/c Dr 45000
To Amar’s capital A/c 11250
To Akbar’s capital A/c 33750
(Being goodwill adjusted to new
partner’s capital account and distributed
to sacrificing partners in sacrificing ratio
1:3)
Page : 167 , Block Name : Numerical Questions
Q27 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.
Balance Sheet of A and B as on December 31, 2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 10000 Cash in hand 10000
Creditors 58000 Cash in bank 40000
Outstanding Expenses 2000 Sundry debtors 60000
Page 49 of 85
Sacrificing ratio = 1:3
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) Anthony’s capital A/c Dr 45000
To Amar’s capital A/c 11250
To Akbar’s capital A/c 33750
(Being goodwill adjusted to new
partner’s capital account and distributed
to sacrificing partners in sacrificing ratio
1:3)
Page : 167 , Block Name : Numerical Questions
Q27 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.
Balance Sheet of A and B as on December 31, 2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 10000 Cash in hand 10000
Creditors 58000 Cash in bank 40000
Outstanding Expenses 2000 Sundry debtors 60000
Page 49 of 85
Page 51
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Capitals: Stock 40000
A 180000 Plant 100000
B 150000 330000 Buildings 150000
400000 400000
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 share
in the profits. share in the profits. share in the
profits.
(ii) Plant is to be appreciated to Rs.1,20,000 and the value of buildings is to be appreciated by
10%.
(iii) Stock is found over valued by Rs.4,000.
(iv) A provision for bad and doubtful debts is to be created at 5% of debtors.
(v) Creditors were unrecorded to the extent of Rs.1,000.
Pass the necessary journal entries, prepare the revaluation account and partners’ capital
accounts, and show the Balance Sheet after the admission of C.
Answer.
Journal entries in the books of-
Particulars L/F Dr amount Cr amount
₹ ₹
Page 50 of 85
Capitals: Stock 40000
A 180000 Plant 100000
B 150000 330000 Buildings 150000
400000 400000
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 share
in the profits. share in the profits. share in the
profits.
(ii) Plant is to be appreciated to Rs.1,20,000 and the value of buildings is to be appreciated by
10%.
(iii) Stock is found over valued by Rs.4,000.
(iv) A provision for bad and doubtful debts is to be created at 5% of debtors.
(v) Creditors were unrecorded to the extent of Rs.1,000.
Pass the necessary journal entries, prepare the revaluation account and partners’ capital
accounts, and show the Balance Sheet after the admission of C.
Answer.
Journal entries in the books of-
Particulars L/F Dr amount Cr amount
₹ ₹
Page 50 of 85
Page 52
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) Bank A/c Dr 160000
To C’s capital A/c 100000
To Premium for goodwill A/c 60000
(Being new partner brought capital and
share of goodwill)
ii) Premium for goodwill A/c Dr 60000
To A’s capital A/c 40000
To B’s capital A/c 20000
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio 2:1)
iii) Plant A/c Dr 20000
Building A/c Dr 15000
To Revaluation A/c 35000
(Being increase in value of assets)
Page 51 of 85
i) Bank A/c Dr 160000
To C’s capital A/c 100000
To Premium for goodwill A/c 60000
(Being new partner brought capital and
share of goodwill)
ii) Premium for goodwill A/c Dr 60000
To A’s capital A/c 40000
To B’s capital A/c 20000
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio 2:1)
iii) Plant A/c Dr 20000
Building A/c Dr 15000
To Revaluation A/c 35000
(Being increase in value of assets)
Page 51 of 85
Page 53
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
iv) Revaluation A/c Dr 8000
To stock A/c 4000
To Provision for doubtful debt A/c 3000
To creditors A/c 1000
(Being revaluation of assets and liabilities)
v) Revaluation A/c Dr 27000
To A’s capital A/c 18000
To B’s capital A/c 9000
(Being profit on revaluation transferred to old
partners A/c)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To stock A/c 4000 By plant A/c 20000
To provision for doubtful 3000 By building A/c 15000
debts
To creditors 1000
To profit on revaluation:
Page 52 of 85
iv) Revaluation A/c Dr 8000
To stock A/c 4000
To Provision for doubtful debt A/c 3000
To creditors A/c 1000
(Being revaluation of assets and liabilities)
v) Revaluation A/c Dr 27000
To A’s capital A/c 18000
To B’s capital A/c 9000
(Being profit on revaluation transferred to old
partners A/c)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To stock A/c 4000 By plant A/c 20000
To provision for doubtful 3000 By building A/c 15000
debts
To creditors 1000
To profit on revaluation:
Page 52 of 85
Page 54
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
A’s capital : 18000
B’s capital : 9000 27000
35000 35000
Partner’s capital A/c
Particulars A B C Particulars A B C
To balance 238000 179000 100000 By balance 180000 150000
c/d b/d
By bank A/c 100000
By premium 40000 20000
for goodwill
By profit on 18000 9000
revaluation
238000 179000 100000 238000 179000 100000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Bills payable 4000 Plant 120000
Creditors 3000 Building 165000
Page 53 of 85
A’s capital : 18000
B’s capital : 9000 27000
35000 35000
Partner’s capital A/c
Particulars A B C Particulars A B C
To balance 238000 179000 100000 By balance 180000 150000
c/d b/d
By bank A/c 100000
By premium 40000 20000
for goodwill
By profit on 18000 9000
revaluation
238000 179000 100000 238000 179000 100000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Bills payable 4000 Plant 120000
Creditors 3000 Building 165000
Page 53 of 85
Page 55
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Outstanding 1000 Stock 36000
Capital A/c: Sundry debtors 60000
A : 238000 Less: Provision 3000 57000
B : 179000 Cash in hand 10000
C : 100000 517000 Bank : 40000
Add: C’s capital
100000
Add: goodwill 6000 200000
588000 588000
Working note:
1) Old ratio is taken as sacrificing ratio since nothing is question.
Page : 168 , Block Name : Numerical Questions
Q28 Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. In
Jan. 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 profit sharing ratio between Leela, Meeta and Om was
5:3:2.
Answer.
Page 54 of 85
Outstanding 1000 Stock 36000
Capital A/c: Sundry debtors 60000
A : 238000 Less: Provision 3000 57000
B : 179000 Cash in hand 10000
C : 100000 517000 Bank : 40000
Add: C’s capital
100000
Add: goodwill 6000 200000
588000 588000
Working note:
1) Old ratio is taken as sacrificing ratio since nothing is question.
Page : 168 , Block Name : Numerical Questions
Q28 Leela and Meeta were partners in a firm sharing profits and losses in the ratio of 5:3. In
Jan. 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 profit sharing ratio between Leela, Meeta and Om was
5:3:2.
Answer.
Page 54 of 85
Page 56
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) General reserves A/c Dr 16000
To Leela’s capital A/c 10000
To Meeta’s capital A/c 6000
(Being distribution of general reserve to
old partner’s in old ratio)
ii) Profit and loss A/c Dr 24000
To Leela’s capital A/c 15000
To Meeta’s capital A/c 9000
(Being profit distributed to old partners in
old ratio)
Page : 168 , Block Name : Numerical Questions
Q29 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.
Answer.
Page 55 of 85
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) General reserves A/c Dr 16000
To Leela’s capital A/c 10000
To Meeta’s capital A/c 6000
(Being distribution of general reserve to
old partner’s in old ratio)
ii) Profit and loss A/c Dr 24000
To Leela’s capital A/c 15000
To Meeta’s capital A/c 9000
(Being profit distributed to old partners in
old ratio)
Page : 168 , Block Name : Numerical Questions
Q29 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.
Answer.
Page 55 of 85
Page 57
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Particulars L/F Dr amount Cr amount
₹ ₹
i) Amit’s capital A/c Dr 30000
Viney’s capital A/c. Dr 10000
To Profit and loss A/c 40000
(Being debit balance of P/L a/c charged
in old partner’s capital A/c)
Page : 168 , Block Name : Numerical Questions
Q30 A and B share profits in the proportions of and . Their Balance Sheet on Dec. 31, 2016
was as follows: and . Their Balance Sheet on
Dec. 31, 2016 was as follows: and . Their
Balance Sheet on Dec. 31, 2016 was as follows:
Balance Sheet of A and B as on December 31, 2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 10000 Cash in bank 26500
Reserves fund 58000 Bills Receivable 3000
Capitals: Debtors 16000
Page 56 of 85
Particulars L/F Dr amount Cr amount
₹ ₹
i) Amit’s capital A/c Dr 30000
Viney’s capital A/c. Dr 10000
To Profit and loss A/c 40000
(Being debit balance of P/L a/c charged
in old partner’s capital A/c)
Page : 168 , Block Name : Numerical Questions
Q30 A and B share profits in the proportions of and . Their Balance Sheet on Dec. 31, 2016
was as follows: and . Their Balance Sheet on
Dec. 31, 2016 was as follows: and . Their
Balance Sheet on Dec. 31, 2016 was as follows:
Balance Sheet of A and B as on December 31, 2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Sundry creditors 10000 Cash in bank 26500
Reserves fund 58000 Bills Receivable 3000
Capitals: Debtors 16000
Page 56 of 85
Page 58
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
A 30000 Stock 20000
B 16000 Fixture 1000
Land & Building 25000
91500 91500
On Jan. 1, 2017, C was admitted into partnership on the following terms:
(a) That C pays Rs.10,000 as his capital.
(b) That C pays Rs.5,000 for goodwill. Half of this sum is to be withdrawn by A and B.
(c) That stock and fixtures be reduced by 10% and 5%, provision for doubtful debts be created
on Sundry Debtors and Bills Receivable.
(d) That the value of land and buildings be appreciated by 20%.
(e) There being a claim against the firm for damages, a liability to the extent of Rs.1,000 should
be created.
(f) An item of Rs.650 included in sundry creditors is not likely to be claimed and hence should
be written back.
Record the above transactions (journal entries) in the books of the firm assuming that the profit
sharing ratio between A and B has not changed. Prepare the new Balance Sheet on the
admission of C.
Answer.
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 57 of 85
A 30000 Stock 20000
B 16000 Fixture 1000
Land & Building 25000
91500 91500
On Jan. 1, 2017, C was admitted into partnership on the following terms:
(a) That C pays Rs.10,000 as his capital.
(b) That C pays Rs.5,000 for goodwill. Half of this sum is to be withdrawn by A and B.
(c) That stock and fixtures be reduced by 10% and 5%, provision for doubtful debts be created
on Sundry Debtors and Bills Receivable.
(d) That the value of land and buildings be appreciated by 20%.
(e) There being a claim against the firm for damages, a liability to the extent of Rs.1,000 should
be created.
(f) An item of Rs.650 included in sundry creditors is not likely to be claimed and hence should
be written back.
Record the above transactions (journal entries) in the books of the firm assuming that the profit
sharing ratio between A and B has not changed. Prepare the new Balance Sheet on the
admission of C.
Answer.
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 57 of 85
Page 59
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) Bank A/c Dr 15000
To C’s capital A/c 10000
To Premium for goodwill A/c 5000
(Being new partner brought capital and share
of goodwill)
ii) Premium for goodwill A/c Dr 5000
To A’s capital A/c 3750
To B’s capital A/c 1250
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio)
iii) Land and building A/c Dr 5000
Sundry creditors A/c Dr 650
To Revaluation A/c 5650
(Being revaluation of assets and liabilities)
Page 58 of 85
i) Bank A/c Dr 15000
To C’s capital A/c 10000
To Premium for goodwill A/c 5000
(Being new partner brought capital and share
of goodwill)
ii) Premium for goodwill A/c Dr 5000
To A’s capital A/c 3750
To B’s capital A/c 1250
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio)
iii) Land and building A/c Dr 5000
Sundry creditors A/c Dr 650
To Revaluation A/c 5650
(Being revaluation of assets and liabilities)
Page 58 of 85
Page 60
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
iv) Revaluation A/c Dr 4050
To stock A/c 2000
To fixtures A/c 100
To Provision for debtors A/c 950
To provision for bills receivable A/c 1000
(Being revaluation of assets and liabilities)
v) A’s capital A/c 1875
Dr
625
B’s capital A/c Dr
2500
To Bank A/c
(Being half goodwill withdrawn by partners)
vi) Reserves fund A/c Dr 4000
To A’s capital A/c 3000
To B’s capital A/c 1000
(Being Reserve fund distributed to old
partners in old ratio)
. Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
Page 59 of 85
iv) Revaluation A/c Dr 4050
To stock A/c 2000
To fixtures A/c 100
To Provision for debtors A/c 950
To provision for bills receivable A/c 1000
(Being revaluation of assets and liabilities)
v) A’s capital A/c 1875
Dr
625
B’s capital A/c Dr
2500
To Bank A/c
(Being half goodwill withdrawn by partners)
vi) Reserves fund A/c Dr 4000
To A’s capital A/c 3000
To B’s capital A/c 1000
(Being Reserve fund distributed to old
partners in old ratio)
. Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
Page 59 of 85
Page 61
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
To Stock 2000 By land and building 5000
To fixtures 100 By sundry creditors 650
To provision for doubtful
debts:
Debtors : 800
Bills receivable : 150 950
To profits:
A : 1200
B : 400 1600
5650 5650
Partner’s capital A/c
Particulars A B C Particulars A B C
To bank A/c 1875 625 By bank A/c 10,000
To bal c/d 36075 18025 10,000 By premium 3750 1250
for goodwill
A/c
Page 60 of 85
To Stock 2000 By land and building 5000
To fixtures 100 By sundry creditors 650
To provision for doubtful
debts:
Debtors : 800
Bills receivable : 150 950
To profits:
A : 1200
B : 400 1600
5650 5650
Partner’s capital A/c
Particulars A B C Particulars A B C
To bank A/c 1875 625 By bank A/c 10,000
To bal c/d 36075 18025 10,000 By premium 3750 1250
for goodwill
A/c
Page 60 of 85
Page 62
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
By balance 30000 16000
b/d
By profit on 1200 400
revaluation
By reserve 3000 1000
37950 18650 10000 37950 18650 10000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Creditors 41500 Bills receivable 2850
650 40850 Sundry debtors 15200
Capital Account: Stock (20000-2000) 18000
A : 36075 Fixtures (1000-100) 900
B : 18025 Land and building 30000
C : 10000 64100 Bank 39000
Claim for damage 1000
105950 105950
Page 61 of 85
By balance 30000 16000
b/d
By profit on 1200 400
revaluation
By reserve 3000 1000
37950 18650 10000 37950 18650 10000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Creditors 41500 Bills receivable 2850
650 40850 Sundry debtors 15200
Capital Account: Stock (20000-2000) 18000
A : 36075 Fixtures (1000-100) 900
B : 18025 Land and building 30000
C : 10000 64100 Bank 39000
Claim for damage 1000
105950 105950
Page 61 of 85
Page 63
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Working note:
i) Bank A/c
Particulars Amount Particulars Amount
₹ ₹
To bal b/d 26500 By A’s capital A/c 1875
To C’s capital A/c 10000 By B’s capital A/c 625
To Premium for goodwill 5000 By bal c/d 39000
41500 41500
ii) Old ratio will be taken as sacrificing ratio.
Page : 168 , Block Name : Numerical Questions
Q31 A and B are partners sharing profits and losses in the ratio of 3:1. On Ist Jan. 2017 they
admitted C as a new partner for share in the profits of the firm. C brings Rs. 20,000 as for his
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. has been worked out at Rs. 50,000
for A and Rs.12,000 for B. It is agreed that partner’s capital’s will be according to new profit
sharing ratio. Calculate the new capitals of A and B and pass the necessary journal entries
assuming that A and B brought in or withdrew the necessary cash as the case may be for
making their capitals in proportion to their profit sharing ratio?
share in the profits of the firm. C brings Rs. 20,000
as for his share in the profits of the firm. The
capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and
Page 62 of 85
Working note:
i) Bank A/c
Particulars Amount Particulars Amount
₹ ₹
To bal b/d 26500 By A’s capital A/c 1875
To C’s capital A/c 10000 By B’s capital A/c 625
To Premium for goodwill 5000 By bal c/d 39000
41500 41500
ii) Old ratio will be taken as sacrificing ratio.
Page : 168 , Block Name : Numerical Questions
Q31 A and B are partners sharing profits and losses in the ratio of 3:1. On Ist Jan. 2017 they
admitted C as a new partner for share in the profits of the firm. C brings Rs. 20,000 as for his
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. has been worked out at Rs. 50,000
for A and Rs.12,000 for B. It is agreed that partner’s capital’s will be according to new profit
sharing ratio. Calculate the new capitals of A and B and pass the necessary journal entries
assuming that A and B brought in or withdrew the necessary cash as the case may be for
making their capitals in proportion to their profit sharing ratio?
share in the profits of the firm. C brings Rs. 20,000
as for his share in the profits of the firm. The
capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and
Page 62 of 85
Page 64
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
liabilities, etc. has been worked out at Rs. 50,000 for A and Rs.12,000 for B. It is agreed that
partner’s capital’s will be according to new profit sharing ratio. Calculate the new capitals of A
and B and pass the necessary journal entries assuming that A and B brought in or withdrew the
necessary cash as the case may be for making their capitals in proportion to their profit sharing
ratio? share in the profits of the firm. C brings Rs.
20,000 as for his 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. has been worked out at Rs. 50,000 for A and Rs.12,000 for B. It is agreed that
partner’s capital’s will be according to new profit sharing ratio. Calculate the new capitals of A
and B and pass the necessary journal entries assuming that A and B brought in or withdrew the
necessary cash as the case may be for making their capitals in proportion to their profit sharing
ratio?
Answer. C’s share
Capital brought in by C = 20,000
Capital of the firm as per C’s share = 20,000 4 4 4
= 80,000
Remaining share
A’s new share
B’s new share
C’s share
New profit sharing ratio = 9:3:4 New profit sharing ratio = 9:3:4 New profit sharing
ratio = 9:3:4
Page 63 of 85
liabilities, etc. has been worked out at Rs. 50,000 for A and Rs.12,000 for B. It is agreed that
partner’s capital’s will be according to new profit sharing ratio. Calculate the new capitals of A
and B and pass the necessary journal entries assuming that A and B brought in or withdrew the
necessary cash as the case may be for making their capitals in proportion to their profit sharing
ratio? share in the profits of the firm. C brings Rs.
20,000 as for his 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. has been worked out at Rs. 50,000 for A and Rs.12,000 for B. It is agreed that
partner’s capital’s will be according to new profit sharing ratio. Calculate the new capitals of A
and B and pass the necessary journal entries assuming that A and B brought in or withdrew the
necessary cash as the case may be for making their capitals in proportion to their profit sharing
ratio?
Answer. C’s share
Capital brought in by C = 20,000
Capital of the firm as per C’s share = 20,000 4 4 4
= 80,000
Remaining share
A’s new share
B’s new share
C’s share
New profit sharing ratio = 9:3:4 New profit sharing ratio = 9:3:4 New profit sharing
ratio = 9:3:4
Page 63 of 85
Page 65
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
A’s share of capital
B’s share of capital
C’s share of capital
Partner’s capital A/c
Particulars A B Particulars A B
To bank A/c 5000 By balance c/d 50000 12000
To balance c/d 45000 15000 By bank A/c 3000
50000 15000 50000 15000
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 64 of 85
A’s share of capital
B’s share of capital
C’s share of capital
Partner’s capital A/c
Particulars A B Particulars A B
To bank A/c 5000 By balance c/d 50000 12000
To balance c/d 45000 15000 By bank A/c 3000
50000 15000 50000 15000
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 64 of 85
Page 66
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) A’s capital A/c Dr 5000
To Bank A/c 5000
(Being A withdrawn 5000 to adjust his
capital as per new profit sharing ratio)
ii) Bank A/c Dr 3000
To B’s capital A/c 3000
(Being B bringing in 3000 to adjust his
capital as per new profit sharing ratio)
Page : 169 , Block Name : Numerical Questions
Q32 Pinky, Qumar and Roopa partners in a firm sharing profits and losses in the ratio of 3:2:1.
S is admitted as a new partner for share in the profits of the firm, which he gets from
Pinky, and each from Qmar 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 of the total capital
of the new firm. The capitals of the old partners also have to be adjusted in proportion of their
profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in respect of
goodwill and revaluation of assets and liabilities have been made are Pinky Rs. 80,000, Qumar
Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the partners and record the
necessary journal entries for doing adjustments in respect of capitals according to the
agreement between the partners? share in the profits of the firm, which he gets
from Pinky, and each from Qmar 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 of the total
Page 65 of 85
i) A’s capital A/c Dr 5000
To Bank A/c 5000
(Being A withdrawn 5000 to adjust his
capital as per new profit sharing ratio)
ii) Bank A/c Dr 3000
To B’s capital A/c 3000
(Being B bringing in 3000 to adjust his
capital as per new profit sharing ratio)
Page : 169 , Block Name : Numerical Questions
Q32 Pinky, Qumar and Roopa partners in a firm sharing profits and losses in the ratio of 3:2:1.
S is admitted as a new partner for share in the profits of the firm, which he gets from
Pinky, and each from Qmar 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 of the total capital
of the new firm. The capitals of the old partners also have to be adjusted in proportion of their
profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in respect of
goodwill and revaluation of assets and liabilities have been made are Pinky Rs. 80,000, Qumar
Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the partners and record the
necessary journal entries for doing adjustments in respect of capitals according to the
agreement between the partners? share in the profits of the firm, which he gets
from Pinky, and each from Qmar 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 of the total
Page 65 of 85
Page 67
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
capital of the new firm. The capitals of the old partners also have to be adjusted in proportion of
their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in
respect of goodwill and revaluation of assets and liabilities have been made are Pinky Rs.
80,000, Qumar Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the partners and
record the necessary journal entries for doing adjustments in respect of capitals according to the
agreement between the partners? share in the profits of the firm, which he gets
from Pinky, and each from Qmar 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 of the
total capital of the new firm. The capitals of the old partners also have to be adjusted in
proportion of their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all
adjustments in respect of goodwill and revaluation of assets and liabilities have been made are
Pinky Rs. 80,000, Qumar Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the
partners and record the necessary journal entries for doing adjustments in respect of capitals
according to the agreement between the partners?
Answer. Old ratio = 3:2:1
Pinky’s new share
Qumar’s new share
Roopa’s new share
Seema's share
New profit sharing ratio = 36:26:10:24 New profit sharing ratio = 36:26:10:24 New profit
sharing ratio = 36:26:10:24
= 18:13:5:12
Capital as per new profit sharing ratio:
Page 66 of 85
capital of the new firm. The capitals of the old partners also have to be adjusted in proportion of
their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in
respect of goodwill and revaluation of assets and liabilities have been made are Pinky Rs.
80,000, Qumar Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the partners and
record the necessary journal entries for doing adjustments in respect of capitals according to the
agreement between the partners? share in the profits of the firm, which he gets
from Pinky, and each from Qmar 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 of the
total capital of the new firm. The capitals of the old partners also have to be adjusted in
proportion of their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all
adjustments in respect of goodwill and revaluation of assets and liabilities have been made are
Pinky Rs. 80,000, Qumar Rs.30,000 and Roopa Rs.20,000. Calculate the capitals of all the
partners and record the necessary journal entries for doing adjustments in respect of capitals
according to the agreement between the partners?
Answer. Old ratio = 3:2:1
Pinky’s new share
Qumar’s new share
Roopa’s new share
Seema's share
New profit sharing ratio = 36:26:10:24 New profit sharing ratio = 36:26:10:24 New profit
sharing ratio = 36:26:10:24
= 18:13:5:12
Capital as per new profit sharing ratio:
Page 66 of 85
Page 68
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Seema’s share of capital
Pinky’s capital
Qumar capital
Roopa capital
Partner’s capital A/c
Particulars Pinky Qumar Roopa Particulars Pinky Qumar Roopa
To bal c/d 90000 65000 25000 By balance 80000 30000 20000
b/d
By bank A/c 10000 35000 5000
90000 65000 25000 90000 65000 25000
Journal entries
Particulars L/f Dr amount Cr amount
₹ ₹
i) Bank A/c Dr 60000
To Seema's capital A/c 60000
(Being capital brought by A)
Page 67 of 85
Seema’s share of capital
Pinky’s capital
Qumar capital
Roopa capital
Partner’s capital A/c
Particulars Pinky Qumar Roopa Particulars Pinky Qumar Roopa
To bal c/d 90000 65000 25000 By balance 80000 30000 20000
b/d
By bank A/c 10000 35000 5000
90000 65000 25000 90000 65000 25000
Journal entries
Particulars L/f Dr amount Cr amount
₹ ₹
i) Bank A/c Dr 60000
To Seema's capital A/c 60000
(Being capital brought by A)
Page 67 of 85
Page 69
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
ii) Bank A/c Dr 50000
To Pinky's capital A/c 10000
To Qumar’s capital A/c 35000
To Roopa's capital A/c 5000
(Being cash brought in by partners to adjust
capital A/c as per new profit sharing ratio)
Page : 169 , Block Name : Numerical Questions
Q33 The following was the Balance Sheet of Arun, Bablu and Chetan sharing profits and losses
in the ratio of respectively. respectively. respectively.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 3000 Land and Buildings 24000
Creditors 9000 Furniture 3500
Capitals: Stock 14000
Arun 180000 Debtors 12600
Bablu 150000 Cash 900
Page 68 of 85
ii) Bank A/c Dr 50000
To Pinky's capital A/c 10000
To Qumar’s capital A/c 35000
To Roopa's capital A/c 5000
(Being cash brought in by partners to adjust
capital A/c as per new profit sharing ratio)
Page : 169 , Block Name : Numerical Questions
Q33 The following was the Balance Sheet of Arun, Bablu and Chetan sharing profits and losses
in the ratio of respectively. respectively. respectively.
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 3000 Land and Buildings 24000
Creditors 9000 Furniture 3500
Capitals: Stock 14000
Arun 180000 Debtors 12600
Bablu 150000 Cash 900
Page 68 of 85
Page 70
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Chetan 8000 43000
55000 55000
They agreed to take Deepak into partnership and give him a share of on the following terms:
on the following terms: on the following terms:
(a) that Deepak should bring in Rs. 4,200 as goodwill and Rs. 7,000 as his Capital;
(b) that furniture be depreciated by 12%;
(c) that stock be depreciated by 10%
(d) that a Reserve of 5% be created for doubtful debts:
(e) that the value of land and buildings having appreciated be brought upto Rs. 31,000 ;
(f) that after making the adjustments the capital accounts of the old partners (who continue to
share in the same proportion as before) be adjusted on the basis of the proportion of Deepak’s
Capital to his share in the business, i.e., actual cash to be paid off to, or brought in by the old
partners as the case may be.
Prepare Cash Account, Profit and Loss Adjustment Account (Revaluation Account) and the
Opening Balance Sheet of the new firm.
Answer.
Cash A/c
Particulars Amount Particulars Amount
₹ ₹
To balance b/d 900 By Arun’s capital a/c 1750
To Deepak’s capital a/c 7000 By bablu capital 1625
Page 69 of 85
Chetan 8000 43000
55000 55000
They agreed to take Deepak into partnership and give him a share of on the following terms:
on the following terms: on the following terms:
(a) that Deepak should bring in Rs. 4,200 as goodwill and Rs. 7,000 as his Capital;
(b) that furniture be depreciated by 12%;
(c) that stock be depreciated by 10%
(d) that a Reserve of 5% be created for doubtful debts:
(e) that the value of land and buildings having appreciated be brought upto Rs. 31,000 ;
(f) that after making the adjustments the capital accounts of the old partners (who continue to
share in the same proportion as before) be adjusted on the basis of the proportion of Deepak’s
Capital to his share in the business, i.e., actual cash to be paid off to, or brought in by the old
partners as the case may be.
Prepare Cash Account, Profit and Loss Adjustment Account (Revaluation Account) and the
Opening Balance Sheet of the new firm.
Answer.
Cash A/c
Particulars Amount Particulars Amount
₹ ₹
To balance b/d 900 By Arun’s capital a/c 1750
To Deepak’s capital a/c 7000 By bablu capital 1625
Page 69 of 85
Page 71
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
To premium for goodwill 4200 By balance c/d 9350
To chetan capital 625
12725 12725
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To furniture 420 By land & building 7000
To reserve for bad debt 630
To Stock 1400
To profit on revaluation:
Arun's capital 1950
Bablu's capital 1625
Chetan's capital 975 4550
7000 7000
Balance sheet
Liabilities Amount Assets Amount
Page 70 of 85
To premium for goodwill 4200 By balance c/d 9350
To chetan capital 625
12725 12725
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To furniture 420 By land & building 7000
To reserve for bad debt 630
To Stock 1400
To profit on revaluation:
Arun's capital 1950
Bablu's capital 1625
Chetan's capital 975 4550
7000 7000
Balance sheet
Liabilities Amount Assets Amount
Page 70 of 85
Page 72
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
₹ ₹
Creditors 9000 Land & Building 31000
Bills payable 3000 Furniture 3000
Capital A/c Stock 12600
Arun: 21000 Debtors 11970
Bablu: 17500 Cash 9350
Chetan: 10500
Deepak: 7000 56000
68000 68000
Partner’s capital A/c
Particulars Arun Babul Cheta Deea Particulars Arun Babul Cheta Deepa
n k n k
To bank 1750 1625 By bal b/d 1900 1600 8000
0 0
To bal c/d 2100 1750 10500 7000 By bank 7000
0 0 A/c
By 1800 1500 900
premium
for
goodwill
A/c
Page 71 of 85
₹ ₹
Creditors 9000 Land & Building 31000
Bills payable 3000 Furniture 3000
Capital A/c Stock 12600
Arun: 21000 Debtors 11970
Bablu: 17500 Cash 9350
Chetan: 10500
Deepak: 7000 56000
68000 68000
Partner’s capital A/c
Particulars Arun Babul Cheta Deea Particulars Arun Babul Cheta Deepa
n k n k
To bank 1750 1625 By bal b/d 1900 1600 8000
0 0
To bal c/d 2100 1750 10500 7000 By bank 7000
0 0 A/c
By 1800 1500 900
premium
for
goodwill
A/c
Page 71 of 85
Page 73
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
By profit 1950 1625 975
on
revaluation
By bank 625
(bal fig )
2275 1912 10500 7000 2275 1912 10500 7000
0 5 0 5
Working Note:
Share of deepak
Remaining share
New share of Arun
New share of babul
New share of chetan
Deepak
New profit sharing ratio = 42:35:21:14 New profit sharing ratio = 42:35:21:14 New profit
sharing ratio = 42:35:21:14
= 6:5:3:2
Capital of firm as per Deepak's share = 7000 8 8 8
= 56000
Page 72 of 85
By profit 1950 1625 975
on
revaluation
By bank 625
(bal fig )
2275 1912 10500 7000 2275 1912 10500 7000
0 5 0 5
Working Note:
Share of deepak
Remaining share
New share of Arun
New share of babul
New share of chetan
Deepak
New profit sharing ratio = 42:35:21:14 New profit sharing ratio = 42:35:21:14 New profit
sharing ratio = 42:35:21:14
= 6:5:3:2
Capital of firm as per Deepak's share = 7000 8 8 8
= 56000
Page 72 of 85
Page 74
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Arun's share Arun's share Arun's
share
Bablu's share
Chetan's share
Page : 170 , Block Name : Numerical Questions
Q34 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 share in profits. Chintan will bring in Rs. 30,000 as his capital
and the capital’s of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance
Sheet of Azad and Babli as on December 31, 2016 (before Chintan’s admission) was as follows:
share in profits. Chintan will bring in Rs. 30,000 as his capital and the capital’s of Azad and
Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on
December 31, 2016 (before Chintan’s admission) was as follows: share in profits. Chintan will
bring in Rs. 30,000 as his capital and the capital’s of Azad and Babli are to be adjusted in the
profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2016 (before
Chintan’s admission) was as follows:
Balance sheet of Azad and Babli as on 31.12.2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 4000 Cash in hand 2000
Creditors 8000 Cash at bank 10000
General Reserve 6000 Sundry debtors 8000
Page 73 of 85
Arun's share Arun's share Arun's
share
Bablu's share
Chetan's share
Page : 170 , Block Name : Numerical Questions
Q34 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 share in profits. Chintan will bring in Rs. 30,000 as his capital
and the capital’s of Azad and Babli are to be adjusted in the profit sharing ratio. The Balance
Sheet of Azad and Babli as on December 31, 2016 (before Chintan’s admission) was as follows:
share in profits. Chintan will bring in Rs. 30,000 as his capital and the capital’s of Azad and
Babli are to be adjusted in the profit sharing ratio. The Balance Sheet of Azad and Babli as on
December 31, 2016 (before Chintan’s admission) was as follows: share in profits. Chintan will
bring in Rs. 30,000 as his capital and the capital’s of Azad and Babli are to be adjusted in the
profit sharing ratio. The Balance Sheet of Azad and Babli as on December 31, 2016 (before
Chintan’s admission) was as follows:
Balance sheet of Azad and Babli as on 31.12.2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 4000 Cash in hand 2000
Creditors 8000 Cash at bank 10000
General Reserve 6000 Sundry debtors 8000
Page 73 of 85
Page 75
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Capitals Stock 10000
Azad : 50000 Furniture 5000
Babli : 32000 82000 Machinery 25000
Building 40000
100000 100000
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 and Machinery at Rs.23,000.
iii) A provision for doubtful debts is to be created @ 6% on debtors.
iv)The capital accounts of Azad and Babli are to be adjusted by opening current accounts.
Record necessary journal entries, show necessary ledger accounts and prepare the Balance
Sheet after admission.
Answer.
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 74 of 85
Capitals Stock 10000
Azad : 50000 Furniture 5000
Babli : 32000 82000 Machinery 25000
Building 40000
100000 100000
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 and Machinery at Rs.23,000.
iii) A provision for doubtful debts is to be created @ 6% on debtors.
iv)The capital accounts of Azad and Babli are to be adjusted by opening current accounts.
Record necessary journal entries, show necessary ledger accounts and prepare the Balance
Sheet after admission.
Answer.
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
Page 74 of 85
Page 76
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
i) Bank A/c Dr 42000
To Chintan’s capital A/c 30000
To Premium for goodwill A/c 12000
(Being new partner brought capital and
goodwill)
ii) Premium for goodwill A/c Dr 12000
To Azad’s capital A/c 8000
To Babli’s capital A/c 4000
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio 2:1)
iii) General Reserve A/c Dr 6000
To Azad capital A/c 4000
To Babli capital A/c 2000
(Being general reserves distributed to old
partners)
Page 75 of 85
i) Bank A/c Dr 42000
To Chintan’s capital A/c 30000
To Premium for goodwill A/c 12000
(Being new partner brought capital and
goodwill)
ii) Premium for goodwill A/c Dr 12000
To Azad’s capital A/c 8000
To Babli’s capital A/c 4000
(Being goodwill distributed to the sacrificing
partners in sacrificing ratio 2:1)
iii) General Reserve A/c Dr 6000
To Azad capital A/c 4000
To Babli capital A/c 2000
(Being general reserves distributed to old
partners)
Page 75 of 85
Page 77
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
iv) Revaluation A/c Dr 2480
To machinery A/c A/c 2000
To Provision for doubtful debt A/c 480
(Being loss on revaluation)
v) Building A/c Dr 5000
To Revaluation A/c 5000
(Being increase in value of building)
vi) Revaluation A/c Dr 2520
To Azad’s capital A/c 1680
To Babli’s capital A/c 840
(Being profit on revaluation transferred to old
partners A/c)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To machinery 2000 By building 5000
Page 76 of 85
iv) Revaluation A/c Dr 2480
To machinery A/c A/c 2000
To Provision for doubtful debt A/c 480
(Being loss on revaluation)
v) Building A/c Dr 5000
To Revaluation A/c 5000
(Being increase in value of building)
vi) Revaluation A/c Dr 2520
To Azad’s capital A/c 1680
To Babli’s capital A/c 840
(Being profit on revaluation transferred to old
partners A/c)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To machinery 2000 By building 5000
Page 76 of 85
Page 78
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
To provision for doubtful 480
debts
To profit on revaluation
Azad: 1680
Babli: 840 2520
5000 5000
Partner’s capital A/c
Particulars Azad Babli Chintan Particulars Azad Babli Chintan
To current 3680 8840 By bal b/d 50000 32000
A/c (bal. fig)
To bal c/d 60000 30000 30000 By premium 8000 4000
for goodwill
By bank 30000
By general 4000 2000
reserve
By profit on 1680 840
revaluation
63680 38840 30000 63680 38840 30000
Page 77 of 85
To provision for doubtful 480
debts
To profit on revaluation
Azad: 1680
Babli: 840 2520
5000 5000
Partner’s capital A/c
Particulars Azad Babli Chintan Particulars Azad Babli Chintan
To current 3680 8840 By bal b/d 50000 32000
A/c (bal. fig)
To bal c/d 60000 30000 30000 By premium 8000 4000
for goodwill
By bank 30000
By general 4000 2000
reserve
By profit on 1680 840
revaluation
63680 38840 30000 63680 38840 30000
Page 77 of 85
Page 79
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Sundry creditors 3000 Buildings 45000
Bills payable 4000 Machinery 23000
Partner’s current A/c Debtors 8000
Azad: 3680 Less: Provision 480 7520
Babli: 8840 12520 Stock 10000
Partner’s capital A/c Furniture 5000
Azad: 60000 Cash in hand 2000
Babli: 30000 Cash at bank
10000
Chintan: 30000 120000 Add: Chintan capital:
30000
Add: goodwill 52000
12000
144520 144520
Working note:
Page 78 of 85
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Sundry creditors 3000 Buildings 45000
Bills payable 4000 Machinery 23000
Partner’s current A/c Debtors 8000
Azad: 3680 Less: Provision 480 7520
Babli: 8840 12520 Stock 10000
Partner’s capital A/c Furniture 5000
Azad: 60000 Cash in hand 2000
Babli: 30000 Cash at bank
10000
Chintan: 30000 120000 Add: Chintan capital:
30000
Add: goodwill 52000
12000
144520 144520
Working note:
Page 78 of 85
Page 80
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Share of chintan
Remaining share
New share of Azad
Chintan
New profit sharing ratio = 6:3:3 New profit sharing ratio = 6:3:3 New profit sharing ratio =
6:3:3
= 2:1:1
Now,
Capital by Chintan = 30000
Therefore, total capital of firm = 30000 4 4 4
Capital of Azad
Capital of babli
* Old ratio is taken as sacrificing ratio.
Page : 170 , Block Name : Numerical Questions
Q35 Ashish and Dutta were partners in a firm sharing profits in 3:2 ratio. On Jan. 01, 2015 they
admitted Vimal for share in the profits. The Balance Sheet of Ashish and Dutta as on Jan. 01,
2016 was as follows: share in the profits. The Balance Sheet of Ashish and Dutta as on Jan.
01, 2016 was as follows: share in the profits. The Balance Sheet of Ashish and Dutta as on
Jan. 01, 2016 was as follows:
Page 79 of 85
Share of chintan
Remaining share
New share of Azad
Chintan
New profit sharing ratio = 6:3:3 New profit sharing ratio = 6:3:3 New profit sharing ratio =
6:3:3
= 2:1:1
Now,
Capital by Chintan = 30000
Therefore, total capital of firm = 30000 4 4 4
Capital of Azad
Capital of babli
* Old ratio is taken as sacrificing ratio.
Page : 170 , Block Name : Numerical Questions
Q35 Ashish and Dutta were partners in a firm sharing profits in 3:2 ratio. On Jan. 01, 2015 they
admitted Vimal for share in the profits. The Balance Sheet of Ashish and Dutta as on Jan. 01,
2016 was as follows: share in the profits. The Balance Sheet of Ashish and Dutta as on Jan.
01, 2016 was as follows: share in the profits. The Balance Sheet of Ashish and Dutta as on
Jan. 01, 2016 was as follows:
Page 79 of 85
Page 81
Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Balance sheet of A and B as on 31.12.2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 10000 Land & Building 35000
Creditors 15000 Plant 45000
Capitals: Debtors 22000
Ashish 80000 Less: Provision 2000 20000
Dutta 35000 Stock 35000
Cash 5000
140000 140000
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 10,000.
iii) Goodwill of the firm be valued at Rs. 20,000.
iv) Vimal to bring in capital to the extent of th of the total capital of the new firm. th of the total
capital of the new firm. th of the total capital of the new firm.
Record the necessary journal entries and prepare the Balance Sheet of the firm after Vimal’s
admission.
Answer.
Page 80 of 85
Balance sheet of A and B as on 31.12.2016
Liabilities Amount Assets Amount
(Rs.) (Rs.)
Bills payable 10000 Land & Building 35000
Creditors 15000 Plant 45000
Capitals: Debtors 22000
Ashish 80000 Less: Provision 2000 20000
Dutta 35000 Stock 35000
Cash 5000
140000 140000
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 10,000.
iii) Goodwill of the firm be valued at Rs. 20,000.
iv) Vimal to bring in capital to the extent of th of the total capital of the new firm. th of the total
capital of the new firm. th of the total capital of the new firm.
Record the necessary journal entries and prepare the Balance Sheet of the firm after Vimal’s
admission.
Answer.
Page 80 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) Land and Building A/c Dr 15000
Plant A/c. Dr 10000
To Revaluation A/c 25000
(Being increase in value of land &
building & plant)
ii) Revaluation A/c Dr 25000
To Ashish’s capital A/c 15000
To Dutta’s capital A/c 10000
(Being profit on revaluation transferred
to old partner A/c)
iii) Bank A/c Dr 36000
To Vimal capital A/c 36000
(Being visual bringing in capital)
Page 81 of 85
Journal entries
Particulars L/F Dr amount Cr amount
₹ ₹
i) Land and Building A/c Dr 15000
Plant A/c. Dr 10000
To Revaluation A/c 25000
(Being increase in value of land &
building & plant)
ii) Revaluation A/c Dr 25000
To Ashish’s capital A/c 15000
To Dutta’s capital A/c 10000
(Being profit on revaluation transferred
to old partner A/c)
iii) Bank A/c Dr 36000
To Vimal capital A/c 36000
(Being visual bringing in capital)
Page 81 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
iv) Vimal current A/c Dr 4000
To Ashish’s capital A/c 2400
To Dutta’’s capital A/c 1600
(Being goodwill charged to vimal current
a/c and distributed to sacrificing
partners)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To profit on revaluation: By land & Building 15000
Ashish's capital A/c: By Plant 10000
15000
Dutta's capital A/c: 25000
10000
25000 25000
Partner’s capital A/c
Particulars Ashish Dutta Vimal Particulars Ashish Dutta Vimal
To balance 97400 46600 36000 By balance 80000 35000
c/d b/d
Page 82 of 85
iv) Vimal current A/c Dr 4000
To Ashish’s capital A/c 2400
To Dutta’’s capital A/c 1600
(Being goodwill charged to vimal current
a/c and distributed to sacrificing
partners)
Revaluation A/c
Particulars Amount Particulars Amount
₹ ₹
To profit on revaluation: By land & Building 15000
Ashish's capital A/c: By Plant 10000
15000
Dutta's capital A/c: 25000
10000
25000 25000
Partner’s capital A/c
Particulars Ashish Dutta Vimal Particulars Ashish Dutta Vimal
To balance 97400 46600 36000 By balance 80000 35000
c/d b/d
Page 82 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
By profit on 15000 10000
revaluation
By bank A/c 36000
By Vimal 2400 1600
current A/c
97400 46600 36000 97400 46600 36000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Creditors 15000 Land and Building 50000
Bills payable 10000 Plant 55000
Capital A/c Sundry debtors:
22000
Ashish: 97400 Less: Provision 2000 20000
Dutta: 46600 Stock 35000
Vimal: 36000 180000 Cash at bank 41000
Vimal current A/c 4000
205000 205000
Page 83 of 85
By profit on 15000 10000
revaluation
By bank A/c 36000
By Vimal 2400 1600
current A/c
97400 46600 36000 97400 46600 36000
Balance sheet
Liabilities Amount Assets Amount
₹ ₹
Creditors 15000 Land and Building 50000
Bills payable 10000 Plant 55000
Capital A/c Sundry debtors:
22000
Ashish: 97400 Less: Provision 2000 20000
Dutta: 46600 Stock 35000
Vimal: 36000 180000 Cash at bank 41000
Vimal current A/c 4000
205000 205000
Page 83 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Working notes:
1) Cash at bank balance = 5000
Add: capital by vimal = 36000
Balance 41000
2) Vimal share
Remaining share
Ashish new share
Dutta’s new share
Vimal’s share
New profit sharing ratio = 12:8:5
Capital of Ashish = 97400
Capital of Dutta = 46600
144000
th share has 144000 capital th share has 144000 capital th share has
144000 capital
Total capital of firm = 144000 = 1,80,000 Total capital of firm = 144000
= 1,80,000 Total capital of firm = 144000 = 1,80,000
Vimal’s share of capital = 1800000 = 36000. Vimal’s share of capital = 1800000 =
36000. Vimal’s share of capital = 1800000 = 36000.
Page 84 of 85
Working notes:
1) Cash at bank balance = 5000
Add: capital by vimal = 36000
Balance 41000
2) Vimal share
Remaining share
Ashish new share
Dutta’s new share
Vimal’s share
New profit sharing ratio = 12:8:5
Capital of Ashish = 97400
Capital of Dutta = 46600
144000
th share has 144000 capital th share has 144000 capital th share has
144000 capital
Total capital of firm = 144000 = 1,80,000 Total capital of firm = 144000
= 1,80,000 Total capital of firm = 144000 = 1,80,000
Vimal’s share of capital = 1800000 = 36000. Vimal’s share of capital = 1800000 =
36000. Vimal’s share of capital = 1800000 = 36000.
Page 84 of 85
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Book : Accountancy Part-I Ncert Solutions | Chapter - 3 Accountancy
Page : 171 , Block Name : Numerical Questions
Page 85 of 85
Page : 171 , Block Name : Numerical Questions
Page 85 of 85
Document Details
| Board / Org | NCERT |
| Exam | Class 12 |
| Type | Solution |
| Pages | 86 |
| Updated | 30 Apr 2026 |