CBSE Class 12 Accountancy HOTs Admission Of A Partner Set C
1. On 01.01.2005 Ravi and Mathew started partnership with the following, in the ratio of 2 : 1 which is there profits sharing ratio too.
Fixed Assets Rs. 3,00,000; Current assets Rs. 3,80,000 Current liabilities Rs. 80,000
During the year they made a profit of Rs. 90,000 and drawings of Rs. 15,000 each for which they have passed the following entries.
(i) Cash a/c Dr. 90,000
Profit and loss a/c 90,000
(ii)Ravis capital a/c Dr. 15,000
Mathews capital a/c Dr. 15,000
Cash a/c 30,000
On 01.01.06, they admitted Jameel into partnership with a capital contribution of Rs. 1,60,000 and Rs. 30,000 towards his share of goodwill. On this date, they have valued the assets and liabilities as follows. Fixed assetsRs. 2,10,000; Current assetsRs. 4,20,000 Current liabilitiesRs. 70,000. There was a liability on account of bills discounted Rs. 20,000 Prepare:
(a) Capital accounts
(b) Revaluation accounts
(c) Balance sheet of the new firm.
Ans: Calculation of opening capital
Capital = Assets Liabilities
= 300000 + 380000 80000 = 6,00,000
Share of Ravi = 600000 x 2/3´ = 4,00,000
Share of Mathew = 600000 x 1/3´ = 2,00,000
Calculation of sacrificing ratio
Sacrificing ratio = Old ratio - New ratio
Old ratio of Ravi & Mathew = 2 : 1
New ratio of Ravi, Mathew & Jameel = 1 : 1 : 1
Sacrificing ratio of Ravi = 2/3-1/3 = 1/3
Sacrificing ratio of Mathew = 1/3- 1/3 = 0
\ Full goodwill should be credited to Ravis capital a/c
2. Mr. Farook and Vinod decide to admit Mr. Karthik as a new partner in their firm. He is required to bring Rs. 10,000 as capital and Rs. 2,000 towards goodwill. What rights can a new partner acquire by contributing towards capital and goodwill?
(i) Right to share the profits of the firm
(ii) Right in the assets of the firm
3. Haridas and Sudheer Raj are partners in a firm sharing profits in the ratio of 3 : 2. On 01.04.2004, they admit Ramdas into the firm for a 5th share in profits. Ramdas contributed the following in respect of his capital and goodwill.
Stock Rs. 10,000 Furniture Rs. 20,000
Plant Rs. 30,000 Building Rs. 40,000
Goodwill has been valued at 2 years purchase of super profit of past 3 years.
01-04-2002 Profit Rs. 18,000
01-04-2003 Profit Rs. 25,000
01-04-2004 Profit Rs. 32,000
Capital employed is Rs. 2,00,000 and normal rate of return is 10%.
Give journal entries in respect of:
(a) Capital contributed by Ramdas
(b) Goodwill brought in by him
Goodwill = Super profit × No. of years of purchase
Super profit= Average profit - Normal profit
Average profit = Total profit/No.of years = 18000 + 25000 + 32000 / 3
75000 / 3 = Rs. 25,000
Normal profit = Capital employed × Rate / 100
200000 x 10 / 100´ = Rs. 20,000
Super profit = 25000 - 20000 = 5,000
Goodwill = 5000 × 2 = 10,000
Share of Ramdas = 10000 x 1 / 5 = Rs. 2000
Calculation of sacrificing ratio
Sacrificing ratio = Old ratio - New ratio
Old ratio of Haridas & Sudheer = 3 : 2
Ramdas will get 1 / 5 share.
\ Remaining = 1 - 1/5 = 4/5
New ratio of Haridas = 4/ 5 x3 / 5 = 12/25
New ratio of Sudheer = 4 / 5 x 2 / 5 = 8 / 25
New ratio of Ramdas = 1 / 5 x 5 / 5 = 5 / 25
Ratio = 12 : 8 : 5
Sacrificing ratio of Haridas = 3 / 5 - 12 / 25 = 15 - 12 / 25 = 3 / 25
Sacrificing ratio of Sudheer = 2 / 5 - 8 / 25 = 10 - 8 / 25
Ratio = 3 : 2
Journal entry
1. Stock Dr. 10,000
Furniture Dr. 20,000
Plant Dr. 30,000
Building Dr. 40,000
Capital 98,000
Goodwill 2,000
(Capital and goodwill brought in)
2. Goodwill a/c Dr. 2,000
Haridas 1,200
Sudheer capital 800
(Goodwill transferred to old partners capital a/c)
