1.A and B share the profit of a business in the ratio of 5:3.

They admit C into the

firm for a 1/4th share in the profits to be contributed equally by A and B. On the
date of admission of C, the balance sheet of the firm was as follow:

Liabilities Rs. Assets Rs.

A’s Capital 3,00,000 Machinery 2,60,000
B’s Capital 2,00,000 Furniture 1,60,000
Workmen’s 40,000 Stock 1,20,000
Compensation Reserve
Bank loan 1,20,000 Debtors 80,000
Creditors 20,000 Bank 60,000
6,80,000 6,80,000

Terms of C’s admission where as follows:

1. C will bring Rs.3,30,000 for his share of capital and goodwill
2. Goodwill of the firm has been valued at 4years purchase of the
average super profit of the last three years. Average profit of the
last three years are Rs.2,20,000 while the normal profits that can be earned
with the capital employed are Rs.1,40,000
3. Furniture is to be appreciated by Rs.60,000 and the value of stock is to be
reduced by Rs.20,000
Prepare Revaluation account, Parner’s Capital Accounts and the new bala
 2.Given below is the balance sheet of A and B on 31st March,2023, Who are carrying
on partnership business A and B share profits and losses in the ratio of 2:1.
BALANCE SHEET OF A AND B AS AT 31ST MARCH,2023

Liabilities Rs. Assets Rs.

Bills Payable 10,000 Cash in hand 10,000
Creditors 58,000 Cash at bank 40,000
Outstanding Expenses 2,000 Sundry Debtors 60,000
Capital A/c’s stock 40,000
A 1,80,000 Plant 1,00,000
B 1,50,000 3,30,000 Building 1,50,000
4,00,000 4,00,000

C is admitted as a partner on 1st April, 2023 on the following terms:

a) C will bring rs.1,00,000 as his capital and Rs.60,000 as his share of
goodwill for 1/4th share in the profits.
b) Plant is to be appreciated to Rs.1,20,000 and the value of building is to be
appreciated by 10%
c) Stock is found overvalued by Rs.4,000
d) A provides for doubtful debts is to be created at 5% of sundry debtors
e) Creditors were unrecorded to extent of Rs.1,000
Pass the necessary Journal entries, prepare the revaluation account and partners
capital account, and show the balance sheet after the admission of c

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 3.A and B are partners in a firm sharing profits and losses in the ratio 3:1. They admit
C for a ¼ share (entirely taken from A) on 31st March 2022 when their Balance Sheet
was as follows:
Liabilities Amount Assets
Amount
Employees provident fund 17,000 Goodwill 40,000
Investment fluctuation fund 4,100 Stock 15,000
Workmen compensation fund 6,000 Debtors 50,000
Capitals A 54,000
B 35,000 less:Provision for
bad debts 2000
48,000
cash 6100
1,16,100 Investments 7000
1,16,100

The following adjustments were agreed upon:

(a) C brings in ₹ 16,000 as goodwill and ₹ 30,000 as capital.

(b) Bad debts amounted to ₹ 3,000.
(c) Market value of investment is ₹ 4,500.
(d) Liability on account of workmen Compensation Reserve amounted to ₹2,000.
Prepare Revaluation Account and Partners’ Capital Accounts of A, B and C.
Also pass Journal Entries for : for bringing New partner’s Capital & Goodwill;
Distribution of goodwill, and for distribution of Profit and Loss of Revaluation A/c.

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 4.Nikil and Mikil were partners in a firm sharing profits and losses in theratio of
3 : 2. On 31st March, 2022 their Balance Sheet was as follows:

Liabilities
Amount Assets Amount

Capitals: Plant and Machinery 2,90,000

Nikil 3,10,000 Furniture 2,20,000
Mikil 6,00,000 Debtors 90,000
2,90,000
Less provision for
General Reserve 50,000 doubtful debts 1,000 89,000

Workmen’s Stock 1,40,000

Compensation Fund 20,000
Creditors 1,10,000 Cash 41,000

7,80,000 7,80,000
On 1st April, 2022, Gukil was admitted into the partnership for 1/4 th share inthe
profits on the following terms:

(i) Goodwill of the firm was valued at Rs. 2,00,000.

(ii) Gukil brought Rs.3,00,000 as her capital and her share of goodwill
premium in cash.

(iii) Bad debts amounted to Rs. 2,000. Create a provision for doubtful
debts @5% on debtors.

(iv) Furniture was found undervalued by Rs. 65,400.Stock was taken over by
Nikil for Rs. 1,30,000.

(v) The liability against workmen's compensation fund was determined at

Rs.30,000.

(vi) After the above adjustments, the capitals of Nikil and Mikil were to be
adjusted taking Gukil's capital as the base. Excess or shortage was to be
adjusted by opening current accounts.
67/ Prepare Revaluation, Partners'1 Capital Accounts and BalanceSheet.
2 2
 5.Saran, Varan and Taran were partners in a firm sharing profits in the
ratio of 3:2:1.On 1stApril,2023 their Balance Sheet was as follows:

Amount Amount
Liabilities Assets

Capital Accounts: Land and Building 3,64,000

Saran 3,58,000 Plant and 2,95,000

Machinery
Varan 3,00,000 Furniture 2,33,000

Taran 2,62,000 9,20,000 Bills Receivables 38,000

General Reserve 48,000 Sundry Debtors 90,000

Creditors 1,60,000 Stock 1,11,000

Bills Payable 90,000 Bank 87,000

12,18,000 12,18,000

On the above date Barun was admitted on the following terms:

(i) He will bring Rs.1,00,000 for his capital and will get 1/10 th
share in the profits.
(ii) The goodwill of the firm was valued at Rs. 3,00,000.
(iii) A liability of Rs.18,000 will be created against bills
receivables discounted.
(iv) The value of stock and furniture will be reduced by 20%.
(v) The value of land and building will be increased by10%.
(vi) Capital accounts of the partners will be adjusted on the
basis of Barun’s capital in their profit sharing ratio by
opening current accounts.
67/ 1 and Partners’ Capital Accounts.
Prepare Revaluation Account
2 2
 6.Murugan and Gugan are partners in a firm sharing profits in the
ratio of 4 : 1. On 31.3.2022, their Balance Sheet was as follows :
Balance Sheet of Murugan and Gughan as on 31.3.2022
Amount Amount
Liabilities Assets

Sundry Creditors 40,000 Cash 24,000

Provision for Bad Debts 4,000 Debtors 36,000

Outstanding Salary 6,000 Stock 40,000

General Reserve 10,000 Furniture 80,000

Plant and
Capitals : Machinery 80,000
Murugan 1,20,000
Gughan 80,000 2,00,000

2,60,000 2,60,000
th
Jegan was admitted ¼ s h a r e i n t h e following terms :Jegan will bring
Rs.1,00,000 as his capital and Rs. 20,000 for his share of goodwill premium,
half of which will be withdrawn by Murugan and Gughan.
(i) Debtors Rs. 2,000 will be written off as bad debts and a
provision of 4% will be created on debtors for bad and
doubtful debts.
(ii) Stock will be reduced by R s . 2,000, furniture will be depreciated
by
Rs.4,000 and 10% depreciation will be charged on plant
and machinery.
(iii) Investments of Rs.7,000 not shown in the Balance Sheet
will be taken into account.
(iv) There was an outstanding repairs bill of Rs,2,300 which
will be recorded in the books.
Pass necessary journal entries for the above transactions in the
books of the firm on Jegan’s admission.
67/ 1
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 7.Selvaa and suga nth were partners in a firm sharing profits and
losses equally. On 31st March, 2023 their Balance Sheet was as follows:

Amount Amount
Liabilities Assets

Sundry Creditors 1,04,000 Cash at Bank 30,000

Capitals Bills Receivable 45,000

Selvaa 2,50,000 Debtors 75,000
Suganth 2,16,000
4,66,000 Furniture 1,10,000
Land and Building 3,10,000

5,70,000 5,70,000

They admitted S a m y 1 / 3 as a new partner.

(i) Samy will bring Rs.3,00,000 as her capital and Rs.50,000 as
her share of goodwill premium, half of which will be withdrawn by
Selvaa and Suganth.
(ii) Debtors to the extent of Rs.5,000 were unrecorded.

(iii) Furniture will be reduced by 10% and 5% provision for

bad and doubtful debts will be created on bills receivables and
debtors.

(iv) Value of land and building will be appreciated by 20%.

(v) There being a claim against the firm for damages, a liability
to the extent of Rs. 8,000 will be created for the same.
67/ 1 and Partners’ Capital Accounts.
Prepare Revaluation Account
2 2
 8. On 31st March 2023, the Balance Sheet of Azhar and Dravid, who
were sharing profits in the ratio of 3 : 1 was as follows :

Balance Sheet of Azhar and Dravid as on 31st March 2023

Amount Amount
Liabilities Assets

Creditors 2,20,000 Cash at Bank 1,40,000

Employees’ Provident Fund 1,00,000 Debtors 6,50,000
Investment Fluctuation Fund 1,00,000 Less Provision
for bad debts 50,000 6,00,000
General Reserve 1,20,000
Capitals : Stock 3,00,000
Azhar : 6,00,000 Investments (market value 5,00,000
Dravid : 4,00,000 10,00,000 4,40,000)

15,40,000 15,40,000
They decided to admit Virat on April 1, 2023 for 1/5th share.

(a) Virat shall bring 80,000 as his share of goodwill premium.

(b) Stock was overvalued by Rs. 20,000.

(c) A debtors whose dues of Rs. 5,000 were written off as bad debts,
paid 4,000 in full settlement.

(d) Two months salary @ 6,000 per month was outstanding.

(e) Virat was to bring in Capital to the extent of 1/5th of the total capital
of the new firm.
67/ 1
2 Prepare Revaluation, Partners’2 Capital A/c and Balance Sheet.
 9. Balu and Rishi are partners sharing profits in the ratio of 3 : 2. Their
Balance Sheet as at 31st March, 2016 is given below :

Amount Amount
Liabilities Assets
Balu’s Capital 11,40,000 Land & Building 5,60,000
Rishi’s Capital 7,00,000 Plant & Machinery 6,00,000
Workmen’s Compensation Reserve 60,000 Stock 1,60,000
Creditors 1,00,000 Debtors 6,00,000
Less Provision 5,80,000
20,000
Bank 1,00,000
20,00,000 20,00,000

Balu and Rishik decides to admit Samy as a new partner from 1 st April, 2016.
Their new profit sharing ratio was 3 : 2 : 5. Samy brought in Rs.6,00,000 as her
capital and her share of goodwill premium in cash.
(a) Samy’s share of goodwill premium was valued at RS.30,000.
(b) Plant and Machinery be valued at 125%.
(c) Creditors were unrecorded to the extent of RS.30,000.
(d) Claim on account of workmen compensation was Rs.40,000.
Prepare Revaluation A/c., Partners’ Capital Accounts and the Balance Sheet of
the reconstituted firm.

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 10.Following was the Balance Sheet of Arumugam and Balan who were
sharing profits in the ratio of 2:1 as at 31st March, 2023:

Liabilit Amou Asset Amou

ies nt s nt
(Rs) (Rs)
Creditors 65900 Cash 1200
Capitals: Sundry Debtors 9700
Arumugam 30000 Stock 20000
Balan 20000 Plant and Machinery 35000
Building 50000
115900 115900

On 1st April, 2023, they agreed to admit Nakulan into partnership on the
following terms:
i. Nakulan has to be given 1/3rd share in profits and was to
bring Rs 15,000 as capital and Rs 6000 as share of
Goodwill.
ii. That the value of stock and plant and machinery were to be reduced
by 10%.
iii. That a provision of 5% was to be created for doubtful debts.
iv. That the building account was to be appreciated by 20%.
v. Investments worth Rs 1400 (not recorded in the Balance Sheet) were
to be taken into account.
vi. That the amount of Goodwill was to be withdrawn by the old
partners.
You are required to prepare Revaluation Account, Partners Capital Account and
Opening Balance Sheet of the new firm.

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 11.A and B share the profit of a business in the ratio of 5:3. They admit C into the
firm for a 1/4th share in the profits to be contributed equally by A and
B. On the date of admission of C, the balance sheet of the firm was as follow:

Liabilities Rs. Assets Rs.

A’s Capital 3,00,000 Machinery 2,60,000
B’s Capital 2,00,000 Furniture 1,60,000
Workmen’s 40,000 Stock 1,20,000
Compensation Reserve
Bank loan 1,20,000 Debtors 80,000
Creditors 20,000 Bank 60,000
6,80,000 6,80,000

Terms of C’s admission where as follows:

1. C will bring Rs.3,30,000 for his share of capital and goodwill
2. Goodwill of the firm has been valued at 4years purchase of the
average super profit of the last three years. Average profit of the
last three years are Rs.2,20,000 while the normal profits that can be earned
with the capital employed are Rs.1,40,000
3. Furniture is to be appreciated by Rs.60,000 and the value of stock is to be
reduced by Rs.20,000

Prepare Revaluation account, Parner’s Capital Accounts and the new balance

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 12.Given below is the balance sheet of A and B on 31st March,2023, Who are
carrying on partnership business A and B share profits and losses in the ratio of
2:1.
BALANCE SHEET OF A AND B AS AT 31ST MARCH,2023

Liabilities Rs. Assets Rs.

Bills Payable 10,000 Cash in hand 10,000
Creditors 58,000 Cash at bank 40,000
Outstanding Expenses 2,000 Sundry Debtors 60,000
Capital A/c’s stock 40,000
A 1,80,000 Plant 1,00,000
B 1,50,000 3,30,000 Building 1,50,000
4,00,000 4,00,000

C is admitted as a partner on 1st April, 2023 on the following terms:

a) C will bring rs.1,00,000 as his capital and Rs.60,000 as his share of
goodwill for 1/4th share in the profits.
b) Plant is to be appreciated to Rs.1,20,000 and the value of building is to be
appreciated by 10%
c) Stock is found overvalued by Rs.4,000
d) A provides for doubtful debts is to be created at 5% of sundry
debtors
e) Creditors were unrecorded to extent of Rs.1,000
Pass the necessary Journal entries, prepare the revaluation account and partners
capital account, and show the balance sheet after the admission of c

67/ 1
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