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Question
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share of profits. At the time of admission of Z, Investments appeared at ₹ 80,000. Half of the investments to be taken by X and Y in their profit-sharing ratio at book value. Remaining investments were valued at ₹ 50,000. Pass the necessary Journal entries.
Solution
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
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X’s Capital A/c |
Dr. |
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24,000 |
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Y’s Capital A/c |
Dr. |
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16,000 |
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To Investments A/c |
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40,000 |
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(Half of the investments taken over by X and Y) |
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Investment A/c |
Dr. |
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10,000 |
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To Revaluation A/c |
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10,000 |
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(Value of investments increased) |
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Revaluation A/c |
Dr. |
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10,000 |
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To X’s Capital A/c |
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6,000 |
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To Y’s Capital A/c |
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4,000 |
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(Profit on revaluation transferred to Partners’ Capital A/c) |
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RELATED QUESTIONS
X and Y are partners in a firm sharing profits and losses in 4:3 ratio. They admitted Z for 1/8 share. Z brought Rs. 20,000 for his capital and Rs. 7,000 for his 1/8 share of goodwill. 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?
A and B share profits in the proportions of 3/4 and 1/4. Their Balance Sheet on March 31, 2016 was as follows:
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Balance Sheet of A and B as on March 31, 2016 |
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Liabilites |
Amount (Rs) |
Assets |
Amount (Rs) |
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Sundry creditors |
41,500 |
Cash at Bank |
26,500 |
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Reserve fund |
4,000 |
Bills Receivable |
3,000 |
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Capital Accounts |
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Debtors |
16,000 |
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A |
30,000 |
Stock |
20,000 |
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B |
16,000 |
Fixtures |
1,000 |
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Land & Building |
25,000 |
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91,500 |
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91,500 |
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On April 1,2017, C was admitted into partnership on the following terms:
- That C pays Rs 10,000 as his capital.
- That C pays Rs 5,000 for goodwill. Half of this sum is to be withdrawn by A and B.
- That stock and fixtures be reduced by 10% and a 5%, provision for doubtful debts be created on Sundry Debtors and Bills Receivable.
- That the value of land and buildings be appreciated by 20%.
- There being a claim against the firm for damages, a liability to the extent of Rs 1,000 should be created.
- 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.
A and B are partners sharing profits and losses in the ratio of 3:1. On Ist Apr. 2017 they admitted C as a new partner for 1/4 share in the profits of the firm. C brings Rs 20,000 as for his 1/4 share in the profits of the firm. The capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and liabilities, etc. has been worked out at Rs 50,000 for A and Rs 12,000 for B. It is agreed that partner’s capitals 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?
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 1/4 share in the profits of the firm, whichs he gets 1/8 from Pinky, and 1/16 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 1/4 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?
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share of profits. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at ₹ 76,000 and ₹ 8,000 respectively. ₹ 6,000 of the debtors proved bad. A provision of 5% is to be created on Sundry Debtors for doubtful debts. Pass the necessary Journal entries.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at ₹ 50,000 and ₹ 5,000 respectively all debtors are good. Pass the necessary Journal entries.
Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is ₹ 4,80,000 and of Divya is ₹ 3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought ₹ 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina's admission.
A and B are partners sharing profits and losses in the ratio of 7 : 5. They admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in ₹ 10,000 for his capital and ₹ 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profits for the first year of the new partnership was ₹ 24,000. Pass necessary Journal entries for C's admission and apportion the profit between the partners.
Out of the following, which is the main right of a partner?
According to Section 30 of Partnership Act 1932:
(A) A Minor can be admitted as a partner by the consent of all partners for the time being.
(B) A new partner will bring capital and goodwill in cash.
(C) A new partner is allowed to share old profits.
(D) A new partner will inspect the books of accounts.
On the admission of a new partner:
X and Y are partners sharing profit in the ratio of 3 : 2. Z was admitted with `1/4` share in profits which he acquires equally from X and Y. The new ratio will be:
At the time of admission of new partner Vasu, old partners Paresh and Prabhav had debtors of ₹ 6,20,000 and a provision for doubtful debts of ₹ 20,000 in their books. As per terms of admission, assets were revalued, and it was found that debtors worth ₹ 15,000 had turned bad and hence should be written off. Which journal entry reflects the correct accounting treatment of the above situation?
After admission what rights does the partner gets?
General Reserve at the time of admission of the partner is transferred to ______
Pick the odd one out:
When a new partner enters into the partnership firm, old partners ______ some part of their old share.
A, B and C are partners in a firm. If D is admitted as a new partner:
