Worksheet Admission

1. On April 1st, 2020 an existing firm had assets of Rs. 75,000 including cash of Rs. 5,000.
The partners’
capital accounts showed a balance of Rs. 60,000 and reserves constituted the rest. If the normal rate of
return is 20% and the goodwill of the firm is valued at Rs. 24,000 at 4 years purchase of super profits,
find the average profits of the firm.
2. A and B are partners sharing profits in the ratio of 3 : 2. They admit C into partnership. It was
agreed to value goodwill at three year’s purchase on the basis of weighted average profit for the past 5
years. Weights being assigned to each year were:- 1, 2, 3, 4, 5 respectively.
The profits of 5 years were:-
Year Profits
31st March, 2015 1,80,000
31st March, 2016 1,60,000
31st March, 2017 2,50,000
31st March, 2018 3,00,000
31st March, 2019 3,50,000
Book revealed:
An abnormal gain of Rs. 20,000 was earned in the year ended 31st March, 2016.
An abnormal loss of Rs. 10,000 was incurred in the year ended 31st March, 2017.
Expense of 50,000 incurred to overhaul a machine on 1st April, 2017 was debited to profit and loss
account instead of being debited to machinery account. Depreciation is charged on machinery @20%
on written down value method.
Closing stock as on 31st March 2018 was undervalued by Rs. 20,000.
Calculate the value of goodwill.
3. A and B are partners with capitals of Rs. 26,000 and Rs. 22,000 respectively. They admit C as
partner with 1/4th share in the profits of the firm. C’s brings Rs 26, 000 as his share of capital. Give
journal entries at the time of C’s admission.
4. A, B and C are partners sharing profits and losses in the ratio of 5:3:2. On 31st, March 2015 their
Balance sheet was as follows:
Liabilities (Rs.) Assets (Rs.)
Capital
Cash 18,000
A 36,000
Bill Receivable 14,000
B 44,000
Stock 44,000
C 52,000 1,32,000
Debtors 42,000
Creditors 64,000
Machinery 94,000
Bills Payable 32,000
Goodwill 20,000
General Reserve 14,000
2,32,000 2,32,000
They decided to admit D into the partnership on the following terms :
(i) Machinery is to be depreciated by 15%.
(ii) Stock is to be revalued at Rs. 48,000.
(iii) Outstanding rent is Rs. 1,900.
Prepared by- Shubham Jagdish 8112601234

(iv) D is to bring Rs. 6,000 as goodwill and sufficient capital for a 2/5th share in the capitals of firm.
Prepare Revaluation A/c, Partner’s Capital A/c’s and Cash A/c.
5. Following is the Balance Sheet of A, B and C sharing profits and losses in the ratio of 6:5:3
respectively.
Creditors 37,000 Cash 3,700
Bill payable 12,600 Debtors 52,920
General reserve 21,000 Stock 58,800
A’s capital 70,000 Furniture 14,700
B’s capital 59,800 Land and Building 90,300
C’s capital 29,100 Goodwill 10,500
2,31,000 2,31,000
They agreed to be take D into partnership giving 1/8th share in profits on the following terms:
(a) Furniture to be depreciated by Rs. 1,840 and Stock by 10%
(b) A provision of Rs. 2,640 to be made for an outstanding bill for repairs.
(c) That land and building be brought up to Rs. 1,19,700.
(d) That the goodwill is valued at Rs. 28,140.
(e) That D should bring in Rs. 35,400 as his capital and for his share of goodwill.
(f) After making the above adjustments the capital of old partners be adjusted in proportion to D’s
Capital by bringing in cash or excess to be paid off.
Prepare Revaluation Account, Capital Account of Partners.
6. A and B were partners in a firm sharing profit in ratio o 5 : 3. Their Balance sheet as on 31-3-2019
was as follows:
Bank overdraft 60,000 Cash 20,000

Creditors 50,000 Debtors 100,000
General reserve 48,000 Less: Provision 2,000 98,000
Capital Accounts: Bills Receivables 38,000
A 1,50,000 Stock 40,000
B 1,00,000 2,50,000 Building 1,50,000
Land 62,000
4,08,000 4,08,000
On 01.04.2019, they admitted C into partnership for 1/4th share in full profits of the firm. Assets and
liabilities were revealed. Goodwill of the firm valued at Rs. 80,000.
Fill in the missing information/figure in the following ledger accounts and Balance Sheet.
Revaluation Account
Particulars (Rs.) Particulars (Rs.)
To provision for bad debts A/c 3,000
By Land A/c
To Stock A/c 2,000 -
To Profit transferred to

____________
____________
Partner’s Capital Account

Particulars A B C Particulars A B C
By Balance b/d – – –
By General Reserve A/c – – –
By Revaluation A/c – – –
To balance c/d – – 80,000 By Premium for Goodwill A/c – – –
By ………. – – –
Balance Sheet
As at 01.04.2019
Bank Overdraft 60,000 Cash –

Creditors 50,000 Debtors –
Capital A/c Bill Receivable 38,000
A – Stock –
B – Building 1,50,000
C - 80,000 Land 68,200

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1. On April 1st, 2020 an existing firm had assets of Rs. 75,000 including cash of Rs. 5,000.

Prepared by- Shubham Jagdish 8112601234

Bank overdraft 60,000 Cash 20,000

Prepared by- Shubham Jagdish 8112601234

Partner’s Capital Account

Bank Overdraft 60,000 Cash –

Prepared by- Shubham Jagdish 8112601234

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