Case Based MCQs of Admission of Partner Class 12 with answers
Source and Case Based MCQs of Admission of Partner Class 12 with answers
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Let’s Practice
Dev, Gautam and Kamal were three partners sharing profits and losses in the ratio of 2 : 1 : 2. On 1st April, 2020, their capital account balances stood at ₹ 90,000, ₹ 80,000 and ₹ 20,000 (Dr.) respectively.
On this date they admitted Naveen into the partnership with a capital of ₹ 50,000. Naveen is to have 1/4 share of the profits with a guaranteed minimum share of distributable profit of ₹ 40,000.
The new profit-sharing ratio among the partners being Dev : Gautam : Kamal : Naveen = 6 : 2 : 7 : 5.
The profit of the firm for the year 2020-21 was ₹ 1,60,000 before the following adjustments were made:
- Interest on Capital @ 10% per annum to be allowed to the partners.
- Interest on Drawings : Dev : ₹ 3,000; Kamal : ₹ 6,000.
- Salary to Partners : Gautam ₹ 7,000; Naveen : ₹ 10,000.
(A) The sacrificing ratio of Dev, Gautam and Kamal will be:
(i) 1 : 2 : 2
(ii) 2 : 2 : 1
(iii) 1 : 1 : 2
(iv) 2 : 1 : 2
And – (ii)
(B) The total interest on capital allowed by the firm to the partners will be:
(I) ₹ 22,000
(ii) ₹ 23,000
(iii) ₹ 21,400
(iv) ₹ 23,100
And – (i)
(c) Deficiency in Naveen’s Profits will be:
(I) ₹ 8,000
(ii) ₹ 7,500
(iii) ₹ 12,500
(iv) ₹ 12,000
And – (ii)
Ritesh and Somesh are partners in a firm sharing profits and losses equally.
They admit Satvik on 1st April, 2021 for 1/5th share in the profits of the firm, future profit-sharing ratio between Ritesh and Somesh would be 3 : 2. At the time of reconstitution of a partnership firm, goodwill was valued at two year’s purchase of the average profits of the preceding four years which were as follows:
| Year | Profit/Loss | |
| 2017-18 | Profit ₹ 70,000 | (after debiting loss of stock by fire ₹ 15,000) |
| 2018-19 | Profit ₹ 50,000 | (including insurance claim for ₹ 5,000) |
| 2019-20 | Loss ₹ 40,000 | (after debiting voluntary retirement compensation paid ₹ 20,000) |
| 2020-21 | Profit ₹ 60,000 | (excluding insurance premium of ₹ 10,000 on insurance of assets) |
(A) The average profits of the firm from the year 2017-18 to the year 2020-21 were:
(i) ₹ 30,000
(ii) ₹ 60,000
(iii) ₹ 37,500
(iv) ₹ 40,000
And – (iv)
(B) The value of goodwill of the firm on Satvik’s admission was:
(i) ₹ 60,000
(ii) ₹ 80,000
(iii) ₹ 75,000
(iv) ₹ 1,20,000
And – (ii)
(C) Satvik is unable to bring in cash his share of goodwill. The account to be debited to record his goodwill compensation will be:
(i) Satvik’s capital A/c
(ii) Satvik’s Current A/c
(iii) Premium for Goodwill A/c
(iv) Old Partner’s Capital A/cs
And – (ii)
Dhruv and Ansh are partners in a firm sharing profits and losses: Dhruv 75% and Ansh 25%. Their Balance Sheet as at 31st March, 2021 is given below:
Balance Sheet of Dhruv and Ansh
As at 31st March, 2021
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors | 49,000 | Cash | 62,000 |
| Workmen Comp. Reserve | 5,000 | Sundry Debtors 18,500 Less: Prov. for Doubtful Debts 1,500 | 17,000 |
| Capital A/c: Dhruv Ansh | 30,000 20,000 | Land and Building | 25,000 |
On 1st April, 2021, Kavi is admitted as a new partner on the following terms:
(I) Land and Building is found to be valued at 25% above cost. It is decided to bring it to its cost.
(ii) Bad Debts amounting to ₹ 1,800 are to be written off. The remaining debtors are good.
(iii) Creditors include an amount of ₹ 5,000 received as commission from Amar. The necessary adjustment is required to be made.
(iv) The liability on Workmen Compensation Reserve is determined at ₹ 3,000.
(v) Kavi is to pay ₹ 15,000 to the existing partners as premium for Goodwill for 20% of the future profits of the firm. He is also to bring in ₹ 25,000 as capital.
(A) At the time of Kavi’s admission, the Workmen Compensation Reserve of:
(I) ₹ 5,000 will be credited to the capital accounts of all the partners.
(ii) ₹ 3,000 will be credited to the capital accounts of all the partners
(iii) ₹ 2,000 will be credited to the capital accounts of the old partners
(iv) ₹ 2,000 will be debited to the capital accounts of the old partners.
And – (iii)
(B) The value of Land & Building in the Balance Sheet of the reconstituted firm will be:
(I) ₹ 20,000
(ii) ₹ 31,250
(iii) ₹ 5,000
(iv) ₹ 6,250
And – (i)
(C) To adjust the creditors in adjustment (iii):
(I) Commission A/c will be credited with ₹ 5,000.
(ii) Creditors A/c will be credited with ₹ 5,000
(iii) Amar’s A/c will be debited with ₹ 5,000
(iv) Creditors A/c will be debited with ₹ 5,000.
And – (iv)
(D) The provision for Doubtful Debts in the reconstituted firm will be:
(I) ₹ 1,500
(ii) ₹ 1,800
(iii) Nil
(iv) None of the above
And – (iii)
(E) The date of the Balance Sheet of the reconstituted firm will be:
(I) Balance Sheet for the year ending 31st March, 2022.
(ii) Balance Sheet as at 31st March, 2021.
(iii) Balance Sheet for the year ending 1st April, 2021.
(iv) Balance Sheet as at 1st April, 2021
And – (iv)
A, B and C are partners sharing profits in 2 : 2 : 1. D was admitted with 1/5th share of profits and it was agreed that A would retain his original share. D brings his share of goodwill ₹ 1,20,000 in Cash. Following balances appeared in their books at this date:
| ₹ | |
| Plant | 3,00,000 |
| Investments | 2,00,000 |
| Investment Fluctuation Reserve | 20,000 |
| Advertisement Suspense Account | 60,000 |
| Contingency Reserve | 90,000 |
| Capitals: A B C | 4,00,000 3,00,000 2,00,000 |
| Sundry Debtors 1,26,000 Less: Provision for Doubtful Debts 8,000 | 1,10,000 |
It was agreed that:
(I) Plant is overvalued by 25%.
(ii) Market value of Investments is ₹ 1,50,000.
(iii) Bad-debts ₹ 6,000 be written off and provision for doubtful debts be maintained @ 10% on debtors.
You are required to choose the correct option:
(A) Loss on Revaluation will be:
(I) ₹ 1,20,000
(ii) ₹ 1,00,000
(iii) ₹ 1,06,000
(iv) ₹ 1,15,000
And – (ii)
(B) New Profit Sharing Ratio will be:
(I) 2 : 2 : 1 : 1
(ii) 2 : 4 : 2 : 1
(iii) 6 : 4 : 2 : 3
(iv) 6 : 4 : 2 : 1
And – (iii)
(C) In respect of goodwill:
(I) ₹ 1,20,000 will be credited to A, B and C in 2 : 2 : 1.
(ii) ₹ 1,20,000 will be credited to B and C in 2 : 1.
(iii) ₹ 24,000 will be credited to B and C in 2 : 1
(iv) ₹ 1,20,000 will be credited to A, B and C in 6 : 4 : 2.
And – (ii)
(D) A’s Capital A/c balance will be:
(i) ₹ 3,72,000
(ii) ₹ 3,60,000
(iii) ₹ 3,64,000
(iv) ₹ 3,69,600
And – (i)
(E) B’s Capital A/c balance will be:
(i) ₹ 3,40,000
(ii) ₹ 3,49,600
(iii) ₹ 3,44,000
(iv) ₹ 3,52,000
And – (iv)
A, B and C are partners sharing profits in 3 : 2 : 1. They admitted D as a new partner. On this date following balances have been extracted from their books:
| ₹ | |
| A’s Capital | 5,00,000 |
| B’s Capital | 3,00,000 |
| C’s Capital | 2,00,000 |
| Building | 6,00,000 |
| Workmen Compensation Reserve | 70,000 |
| Bills Receivables | 50,000 |
D was given 1/6th share of profits which he acquires from A and B in the ratio of 2 : 1. It was further agreed that:
(I) Goodwill of the firm is valued at ₹ 3,60,000. D brings half of his share of goodwill in cash.
(ii) Building is undervalued by 20%.
(iii) There is an unrecorded asset of ₹ 60,000.
(iv) Liability for Workmen Compensation Claim is estimated at ₹ 1,00,000.
(v) A bill of exchange of ₹ 20,000 which was previously discounted with the bank had dishonoured but no entry has been passed for dishonour.
Based on the above information you are required to answer the following questions:
(A) Gain on Revaluation will be:
(I) ₹ 1,50,000
(ii) ₹ 1,60,000
(iii) ₹ 1,80,000
(iv) ₹ 2,10,000
And – (iii)
(B) New Profit Sharing Ratio will be:
(i) 3 : 2 : 1 : 1
(ii) 7 : 5 : 2 : 2
(iii) 7 : 5 : 1 : 1
(iv) 7 : 5 : 3 : 3
And – (iv)
(C) Choose the Correct Option:
(i)
Premium for Goodwill A/c Dr. 60,000
To A’s Capital A/c 40,000
To B’s Capital A/c 20,000
(ii)
D’s Current A/c Dr. 60,000
To A’s Capital A/c 40,000
To B’s Capital A/c 20,000
(iii)
Premium for Goodwill A/c Dr. 30,000
D’s Current A/c Dr. 30,000 Dr. 30,000
To A’s Capital A/c 40,000
To B’s Capital A/c 20,000
(iv)
Premium for Goodwill A/c Dr. 30,000
D’s Current A/c Dr. 30,000
To A’s Current A/c 40,000
To B’s Current A/c 20,000
And – (iii)
(D) Entry for dishonour of Bill of Exchange will be:
(i) Dr. Revaluation A/c; Cr. B/R A/c
(ii) Dr. Revaluation A/c; Cr. Bank A/c
(iii) Dr. Debtors A/c; Cr. Bank A/c
(iv) Dr. Debtors A/c; Cr. B/R A/c
And – (iii)
(E) A’s Capital A/c balance will be:
(i) ₹ 6,30,000
(ii) ₹ 6,15,000
(iii) ₹ 6,45,000
(iv) ₹ 6,20,000
And – (i)
A, B and C are partners sharing profits in 3 : 2 : 1. They admit D as a new partner for 1/4th share in the profits and he brought in ₹ 3,00,000 as his share of goodwill which was credited to the Capital Accounts of B and C respectively with ₹ 2,50,000 and ₹ 50,000.
Their Balance sheet as at date was as under
| Liabilities | ₹ | Assets | ₹ |
| A’s Capital | 4,00,000 | Goodwill | 1,20,000 |
| B’s Capital | 2,00,000 | Land and Building | 5,00,000 |
| C’s Capital | 2,00,000 | Machinery | 1,00,000 |
| Creditors | 1,50,000 | Furniture | 40,000 |
| General Reserve | 30,000 | Debtors 2,00,000 Less Provision for Doubtful Debts 8,000 | 1,92,000 |
| Cash at Bank | 28,000 | ||
| 9,80,000 | 9,80,000 |
Following adjustments are agreed upon:
(i) Machinery is reduced by ₹ 60,000.
(ii) Furniture is reduced to ₹ 15,000.
(iii) An unrecorded accrued income of ₹ 10,600 is to be accounted.
(iv) A debtor whose dues of ₹ 50,000 were written off as bad debts, paid ₹ 30,000 in full settlement.
(v) Bad Debts amounting to ₹ 10,000 are to be written off and provision for doubtful debts is to be maintained at the existing rate.
Based on above information, you are required to answer the following:
(A) Loss on revaluation will be:
(i) ₹ 56,000
(ii) ₹ 24,000
(iii) ₹ 84,000
(iv) ₹ 54,000
And – (iv)
(B) New Profit Sharing Ratio will be:
(i) 3 : 2 : 1 : 1
(ii) 9 : 6 : 3 : 4
(iii) 4 : 1 : 1 : 2
(iv) 3 : 5 : 1 : 1
And – (iii)
(C) A’s Capital Account Balance will be:
(i) ₹ 3,13,000
(ii) ₹ 3,28,000
(iii) ₹ 3,43,000
(iv) ₹ 3,88,000
And – (ii)
(D) C’s Capital Account Balance will be:
(i) ₹ 2,26,000
(ii) ₹ 2,21,000
(iii) ₹ 2,46,000
(iv) ₹ 2,31,000
And – (i)
On 1.4.2018 A and B started business with capitals of ₹ 8,00,000 and ₹ 16,00,000 respectively.
They decided to share the future profits in the ratio of their capitals. On 1.4.2019 they admitted C as a new partner. A surrendered 1/4th of his share in favour of C and B surrendered 1/9th from his share in favour of C. On 1.4.2020 D was admitted as a new partner for 1/6th share. On 1.4.2021, E was admitted for 1/5th share in the profits and it was decided that all the partners will share the future profits equally.
The profit sharing ratio of A, B and C was:
(A) 9 : 20 : 7
(B) 8 : 21 : 7
(C) 10 : 19 : 7
(D) 7 : 22 : 7
And – (A)
The profit sharing ratio of A, B and C and D was:
(A) 45 : 105 : 30 : 36
(B) 45 : 100 : 35 : 36
(C) 45 : 105 : 40 : 36
(D) 45 : 100 : 40 : 36
And – (B)
Anwesha and Bhumika are partners sharing profits in 5 : 4. Their Balance sheet as at 31.3.2022 was as follows:
Balance sheet as at 31.3.2022
| Liabilities | ₹ | Assets | ₹ |
| Capital A/cs (Fixed) Anwesha Bhumika | 80,000 50,000 | Bank | 28,000 |
| Creditors | 20,000 | Debtors 42,000 (-) Provision for Doubtful Debts 2,000 | 40,000 |
| Machinery | 38,000 | ||
| Stock | 44,000 | ||
| 1,50,000 | 1,50,000 |
They admitted Krish as a partner. Anwesha surrendered 1/5th of her share in favour of Krish. Bhumika surrendered 1/9th from her share in favour of Krish.
- He brought ₹ 50,000 as his capital but could not bring anything for his share of the premium for goodwill. Goodwill of the firm was valued at ₹ 1,80,000.
- Machinery was undervalued by 5%.
- Stock was overvalued by 10%.
- A customer who owed us ₹ 2,000 was declared bankrupt and nothing could be recovered from his official receiver. Maintain a provision for doubtful debts of @ 10% on debtors.
- There was a contingent liability for a claim for damages ₹ 3,000 that has now become a normal liability and is to be taken into account.
- The partners decide to adjust their capitals based on Krish.
Based on the above, answer the following questions:
What is the sacrificing ratio of Anwesha and Bhumika?
(A) 9 : 4
(B) 5 : 4
(C) 4 : 5
(D) 1 : 1
And – (D)
Which of the following is correct related to the treatment of Goodwill?
(A) Krish’s Capital A/c is debited by ₹ 1,80,000
(B) Krish’s Current A/c is debited by ₹ 1,80,000
(C) Krish’s Capital A/c is debited by ₹ 40,000
(D) krish’s Current A/c is debited by ₹ 40,000
And – (D)
The change in the value of Machine is ₹ ____ and will be ______ in ‘Revaluation A/c’.
(A) ₹ 2,000 Debited
(B) ₹ 2,000 Credited
(C) ₹ 1,900 Debited
(D) ₹ 1,900 Credited
And – (B)
The change in the value of Stock is ₹ _ and will be _ in ‘Revaluation A/c’.
(A) ₹ 4,400 Debited
(B) ₹ 4,400 Credited
(C) ₹ 4,000 Debited
(D) ₹ 4,000 Credited
And – (C)
The ‘Revaluation A/c’ shows a loss of ₹ _ and will be borne by Anwesha and Bhumika in __.
(A) ₹ 9,000, 5 : 4
(B) ₹ 9,000, 1 : 1
(C) ₹ 11,300, 5 : 4
(D) ₹ 11,300, 1 : 1
And – (A)
A and B are partners sharing profits and losses in the ratio of 3 : 2. They admitted C with effect from 1st April, 2021.
New Profit sharing ratio is agreed at 4 : 3 : 3 An extract of their Balance Sheet as at 31st March, 2021 is as follows:
| Liabilities | ₹ | Assets | ₹ |
| Workmen Compensation Reserve | 90,000 |
Based on the above information you are required to answer the following questions:
If there is no other information in respect of Workmen Compensation Reserve:
(A) Cr. A’s Capital A/c with ₹ 60,000 and B’s Capital A/c with ₹ 30,000
(B) Cr. A’s Capital A/c with ₹ 54,000 and B’s Capital A/c with ₹ 36,000
(C) Dr. A’s Capital A/c with ₹ 54,000 and B’s Capital A/c with ₹ 36,000
(D) Cr. A’s Capital A/c with ₹ 36,000 and B’s Capital A/c with ₹ 27,000 and C’s Capital A/c ₹ 27,000.
And – (B)
If a claim for Workmen Compensation Reserve is estimated at ₹ 60,000.
(A) Cr. A’s Capital A/c with ₹ 20,000 and B’s Capital A/c with ₹ 10,000
(B) Dr. A’s Capital A/c with ₹ 18,000 and B’s Capital A/c with ₹ 12,000
(C) Cr. A’s Capital A/c with ₹ 18,000 and B’s Capital A/c with ₹ 12,000
(D) Cr. A’s Capital A/c with ₹ 12,000 and B’s Capital A/c with ₹ 9,000 and C’s Capital A/c with ₹ 9,000
And – (C)
If a claim for Workmen Compensation is estimated at ₹ 1,50,000.
(A) Dr. C’s Capital A/c with ₹ 60,000
(B) Dr. C’s Capital A/c with ₹ 18,000
(C) Dr. Workmen Compensation Reserve A/c with ₹ 90,000 and Revaluation A/c with ₹ 60,000
(D) Dr. Revaluation A/c with ₹ 60,000
And – (C)
P and Q were partners in a firm sharing profits in the ratio of 4 : 3. On 1st April, 2021 they admitted R as a new partner for 1/4th share in the profits of the firm. On the date of R’s admission, the Balance Sheet of P and Q showed a General Reserve of ₹ 2,80,000 and Advertisement Suspense Account of ₹ 1,40,000.
The following was agreed upon, on R’s admission:
(i) R’s share of goodwill is agreed at ₹ 70,000 of which he is to bring half in cash.
(ii) New Profit sharing ratio is agreed at 2 : 1 : 1.
On the basis of the above information you are required to answer the following questions:
In respect of goodwill:
(A) Cr. P’s Capital A/c by ₹ 40,000 and Q’s Capital A/c by ₹ 30,000
(B) Cr. P’s Capital A/c by ₹ 20,000 and Q’s Capital A/c by ₹ 15,000
(C) Cr. P’s Capital A/c by ₹ 10,000 and Q’s Capital A/c by ₹ 25,000
(D) Cr. P’s Capital A/c by ₹ 20,000 and Q’s Capital A/c by ₹ 50,000
And – (D)
In respect of general reserve:
(A) Cr. P’s Capital A/c by ₹ 1,40,000; Q’s Capital A/c by ₹ 70,000 and R’s Capital A/c by ₹ 70,000
(B) Cr. P’s Capital A/c by ₹ 80,000 and Q’s Capital A/c by ₹ 2,00,000
(C) Cr. P’s Capital A/c by ₹ 1,60,000 and Q’s Capital A/c by ₹ 1,20,000
(D) Cr. P’s Capital A/c by ₹ 40,000; Q’s Capital A/c by ₹ 30,000 and Dr. R’s Capital A/c by ₹ 70,000
And – (C)
In respect of Advertisement Suspense Account:
(A) Dr. P’s Capital A/c by ₹ 80,000 and Q’s Capital A/c by ₹ 60,000
(B) Dr. P’s Capital A/c by ₹ 40,000 and Q’s Capital A/c by ₹ 1,00,000
(C) Dr. P’s Capital A/c by ₹ 70,000; Q’s Capital A/c by ₹ 35,000 and R’s Capital A/c by ₹ 35,000
(D) Dr. R’s Capital A/c by ₹ 35,000
And – (A)
X and Y are partners in a firm, sharing profits and losses in the ratio of 5 : 3. On 31st March, 2021,, their Balance Sheet was as under:
| Liabilities | ₹ | Assets | ₹ |
| Creditors | 40,000 | Bank | 6,000 |
| Provident Fund | 10,000 | Debtors | 1,80,000 |
| Workmen’s Compensation Reserve | 50,000 | Stock | 1,40,000 |
| Capital A/cs: X Y | 3,00,000 2,00,000 | Premises | 2,50,000 |
| Advertisement Expenses | 24,000 | ||
| 6,00,000 | 6,00,000 |
On 1st April, 2021, Z is admitted as a partner. X surrenders 1/4th of his share and Y 1/3rd of his share in favour of Z. Goodwill is valued at ₹ 1,60,000. Z brings in only 3/5 of his share of goodwill in cash and ₹ 1,20,000 as his capital. Following terms are agreed upon:
(I) Premises is to be increased to ₹ 2,75,000. Stock includes obsolete stock of ₹ 40,000 which is expected to realise only 10% of its value.
(ii) Creditors proved at ₹ 45,000, one bill for goods purchased having been omitted from the books.
(iii) Outstanding rent amounted to ₹ 5,000 and prepaid salaries ₹ 3,000.
(iv) Liability on account of provident fund was only ₹ 8,000.
(v) Liability for Workmen’s Compensation Claim was ₹ 34,000.
On the basis of the above information, you are required to answer the following questions:
Loss/Gain on Revaluation will be:
(A) Nil
(B) Gain ₹ 16,000
(C) Loss ₹ 12,000
(D) Loss ₹ 16,000
And – (D)
Goodwill will be
(A) Credited to X ₹ 88,889 and Y ₹ 71,111
(B) Credited to X ₹ 25,000 and Y ₹ 20,000
(C) Credited to X ₹ 15,000 and Y ₹ 12,000
(D) Credited to X ₹ 28,125 and Y ₹ 16,875
And – (B)
Balance of X’s Capital Account will be:
(A) ₹ 2,95,000
(B) ₹ 3,10,000
(C) ₹ 3,20,000
(D) ₹ 3,00,000
And – (B)
Balance of Y’s Capital Account will be:
(A) ₹ 1,99,000
(B) ₹ 2,03,000
(C) ₹ 2,17,000
(D) ₹ 2,11,000
And – (D)
A and B are in partnership, sharing profits in the ratio of 5 : 3 respectively. Their balance Sheet is as follows:
| Liabilities | ₹ | Assets | ₹ |
| Creditors | 3,20,000 | Cash at Bank | 53,000 |
| Workmen’s Compensation Reserve | 80,000 | Debtors 1,00,000 Less: Provision 3,000 | 97,000 |
| Outstanding Expenses | 10,000 | Stock | 4,40,000 |
| Capital A/cs: A B | 5,00,000 4,00,000 | Plant | 7,20,000 |
| 13,10,000 | 13,10,000 |
C is admitted into partnership on the following terms:
- The new profit sharing ratio will be 4 : 3 : 2 between A, B and C respectively.
- C is to bring in ₹ 2,00,000 in Capital.
- Goodwill of the firm is valued at ₹ 3,60,000 but C is unable to bring his share of goodwill in cash.
- Outstanding expenses be brought down to ₹ 4,000.
- To Write off bad debts amounting to ₹ 5,000.
- A Creditor for ₹ 20,000 is not traceable for a number of years and the amount is to be written off.
Based on the above information, you are required to answer the following questions:
Loss/Gain on Revaluation will be:
(A) Loss ₹ 24,000
(B) Gain ₹ 24,000
(C) Gain ₹ 21,000
(D) Gain ₹ 22,000
And – (B)
Goodwill will be:
(A) Credited to A ₹ 50,000 and B ₹ 30,000.
(B) Credited to A ₹ 2,92,500 and B ₹ 67,500
(C) Credited to A ₹ 65,000 and B ₹ 15,000
(D) Credited to A ₹ 2,25,000 and B ₹ 1,35,000
And – (C)
Balance of A’s Capital Account will be:
(A) ₹ 6,28,125
(B) ₹ 6,15,000
(C) ₹ 6,30,000
(D) ₹ 6,13,125
And – (C)
