Q:1 Why
should a new partner contribute for goodwill?
Q:2 A, B and
C are in partnership sharing profits and losses in the ratio of 5:4:1 resp. Two
new partners D and E are admitted. Profits are now to be shared in the ratio of
3:4:2:2:1 resp. D is to pay Rs 30,000 for his share of goodwill but E has
insufficient cash to pay for goodwill. Both the new partners introduced Rs
40,000 each as their capital. Pass necessary journal entries.
Q:3 A &
B are partners in a firm. They admit C as a partner with 1/4th share
in the profits of the firm. C brings Rs 2,00,000 as his share of capital. Value
of Assets is Rs 5,40,000 and outside liabilities are valued at Rs 1,00,000 on
that date. Give journal entries.
Q:4 Balance
Sheet of X, and Y who share profits and losses in the ratio of 3:2 as at
31-3-2015 was:
|
Liabilities
|
Rs
|
Assets
|
Rs
|
|
Creditors
Reserve
P& L A/c
X’s Capital
Y’s Capital
|
1,00,000
60,000
25,000
48,000
32,000
|
Bank
Debtors
Stock
Furniture
Plant & Machinery
Advertisement Expenditure
|
10,000
50,000
70,000
20,000
1,00,000
15,000
|
2,65,000
2,65,000
=========
==========
They admit Z
as a partner from 1st April, 2015 with 1/5th share in the
profits of the firm. Z brings in Rs 50,000 as his capital. Give Journal entry
for adjustment of goodwill.
Q:5 A, B and C were partners in a firm sharing
profits and losses in the ratio of 3:1:1. On 1st April, 2015, their
Balance Sheet stood as:
|
Liabilities
|
Rs
|
Assets
|
Rs
|
|
Creditors
General Reserve
P& L A/c
A’s Capital
B’s Capital
C’s Capital
Invt Fluctuation Reserve Workmen Compensation Reserve
Employees Provident Fund
|
1,00,000
25,000
35,000
1,00,000
30,000
20,000
20,000
23,000
30,000
|
Current Assets
Machinery
Investment( market value Rs 28,000)
Furniture
Land & Building
Advertisement Expenditure
|
1,18,000
50,000
30,000
10,000
1,50,000
25,000
|
3,83,000
3,83,000
=========
==========
They
admitted D into partnership for 1/5th share of profits on the above
date. A claim on account of workmen compensation is estimated at Rs 13,000
only.
Q:6 A is
admitted as a partner in ABC & Co, a partnership firm of B & C. The
firm has reserves of Rs 75,000 and accumulated profits of Rs 1,00,000. At the
time of admission, accountant distributed the reserves and accumulated profits
to B and C in their profit sharing ratio. B was of the opinion that they should
not be distributed because
i)
There
is no legal requirement
ii)
Even
if they are not distributed then also they will remain in the business and can
be distributed whenever required at the time of retirement/death of the
partner.
Do you agree? Give reasons.
Q:7 Murari
and Vohra were partners in a firm with capitals of Rs 1,20,000 and Rs 1,60,000
resp. On 1st April,2015 they admitted Yadav as a partner for 1/4th
share of goodwill.
On that date
the creditors of the firm were Rs 60,000 and Bank overdraft was Rs 15,000.
Their assets apart from cash included stock Rs 10,000; debtors Rs 40,000; Plant
Rs 80,000; Land & Building Rs 2,00,000. It was agreed that stock should be
depreciated by Rs 2,000; Plant by 20%, Rs 5,000 should be written as bad debt
and land & building be appreciated by 25%.
Prepare
Revaluation A/c, Capital A/cs and the Balance Sheet of the new firm.
Q: 8 Balance
Sheet had Investment Fluctuation reserve of Rs 20,000. New partner is admitted.
Value of investments is Rs 60,000 against its book value of Rs 80,000. What
amount of Investment Fluctuation Reserve will be distributed among partners.
Q:9 A and B
are partners in a firm. Their Balance Sheet as at 31st March, 2015
was:
|
Liabilities
|
Rs
|
Assets
|
Rs
|
|
Creditors
Outstanding expenses
A’s Capital
B’s Capital
Provision for doubtful debts
Workmen Compensation Reserve
|
30,000
3,000
50,000
60,000
4,000
5,600
|
Cash
Machinery
Debtors
Stock
Profit & Loss A/c
|
10,000
38,600
80,000
20,000
4,000
|
1,52,600
1,52,600
=========
==========
On 1st
April, 2015, they admitted C as a new partner on the following conditions:
i)
C
brings in Rs 40,000 as his share of capital but he is unable to bring any
amount for goodwill.
ii)
The
new ratio between A, B and C will be 3:2:1.
iii)
Claim
on account of workmen compensation is Rs 3,000.
iv)
To
write off bad debts amounting to Rs 6,000.
v)
Creditors
are to be paid Rs 2,000 more.
vi)
Rs
2,000 be provided for an unforeseen liability.
vii)
Outstanding
expenses be brought down to Rs 1,200.
viii)
Goodwill
is valued at 1-1/2years purchase of average profits of last three years, less
Rs 12,000. The profits of last three years were Rs 10,000; 20,000; 30,000 resp.
Prepare Revaluation A/c, Capital A/c
and the new Balance Sheet.
Q:10 X and Y
are partners in a firm sharing profits in the ratio of 3:2. The remaining
capitals of X and Y after adjustments are Rs 80,000 and 60,000 resp. They admit
Z as a partner on his contribution of Rs 35,000 as capital for 1/5th
share to be acquired equally from both X and Y. The Capitals of the old
partners are to be adjusted on the basis of the proportion of Z’s capital to
his share in the business. Calculate the amount of actual cash to be paid off
or brought in bt the old partners for the purpose.
Q:11 A and B are partners in a firm sharing
profits in the ratio of 3:1 . they admitted K as a new partner for 3/8th
share . The new ratio will be 3:2:3. K brought rs 2,00,000 for his capital and
Rs 50,000 for his share of goodwill. Their Balance Sheet as at 31st
March, 2015 was:
|
Liabilities
|
Rs
|
Assets
|
Rs
|
|
Creditors
Outstanding expenses
A’s Capital
B’s Capital
|
60,000
20,000
4,00,000
1,00,000
|
Cash
Machinery
Debtors
Stock
Furniture
|
90,000
2,10,000
80,000
1,50,000
50,000
|
5,80,000
5,80,000
=========
==========
On 1st
April, 2015, they admitted C as a new partner on the following conditions:
i)
Stock
to be valued at Rs 2,00,000.
ii)
Machinery
will be depreciated by 12% and furniture by Rs 2,000.
iii)
A
provision of 5% for bad and doubtful debts will be made on debtors.
iv)
The
Capitals Accounts of all the partners were adjusted in the New ratio after
admission. For surplus or deficiency, the Current Accounts were to be opened.
Prepare Revaluation Account,
partner’s Capital A/c and the Balance Sheets.
Q:12 Why is
there a need to revalue assets and liabilities at the time of admission of a
partner?
Q:13 The
Capitals of A and B were Rs 1,00,000 and Rs 2,00,000. A new partner, C is
admitted for 1/5th share. At that time Reserves existed in the books
at Rs 40,000 and Revaluation profit was Rs 30,000. C brought Rs 10,000 for his
share of goodwill premium. C has to bring in proportionate capital. Calculate C’s Capital.
Q:14 The Capitals of A and B were Rs 1,00,000 and
Rs 2,00,000. A new partner, C is admitted for 1/5th share. At that
time Reserves existed in the books at Rs 40,000 and Revaluation profit was Rs
30,000. C is unable to bring his share of goodwill premium of Rs 10,000.
Calculate
the total amount C will bring to become a partner and pass necessary entries.
Q:15 The
Capitals of A and B were Rs 4,00,000 and Rs 2,00,000. A new partner, C is
admitted for 1/5th share. At that time Reserves existed in the books
at Rs 40,000 and Revaluation loss was Rs 30,000. C brought Rs 1,80,000 for
capital but is unable to bring his share of goodwill premium of Rs 10,000.
Pass
necessary journal entries at the C’s admission if capitals of the partners is
to be adjusted on the basis of C’s proportionate capital contribution.
Q:16
Capitals of A, B and C as on 31-3-2015 were 36,000;44,000 and 52,000 resp.
Goodwill appeared in the Balance Sheet at Rs 20,000 and P&L A/c credit
balance was Rs 14,000. Revaluation loss amounted to Rs 11,100. D brings in Rs
36,000 towards 1/6th share and partners to readjust their capital
accounts on the basis of their profit sharing ratio. D is not in a position to
bring in any amount for his share of goodwill. The adjustment of excess or
deficit capital is to be made through Current accounts.
Pass the
entry/entries regarding adjustment of capitals.
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