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Assertion (A): Parul and Paresh are partners sharing profits equally. They admit Prema for 1/4th share in future profits. On the date of admission, Workmen Compensation Reserve existed in the books at ₹ 1,00,000. A claim of ₹ 1,50,000 was made by a worker and was to be accounted. The existing reserve of ₹ 1,00,000 will be distributed between Parul and Paresh and ₹ 1,50,000 being the claim amount will be transferred to the debit of Revaluation Account.

Ans – d) Explanation:- Workmen’s compensation claim is adjusted through the workmen compensation Reserve. any excess is transferred to the debit side of the Revaluation Account.

Anurag Pathak
June 8, 2023

Assertion (A): Ajay and Akansha are partners sharing profits in the ratio of 3 : 2. General Reserve existed in the books at ₹ 1,00,000. They admitted Amit as a partner for 2/5th share in profits. ₹ 50,000 was transferred to Workmen Compensation Reserve and the balance was transferred to the Capital Accounts of Ajay and Akansha in the ratio of 3 : 2.

Ans – a) Explanation:- General Reserve can be used for any purpose. Thus, the amount can be transferred to Workmen Compensation Reserve and rest is distributed to old partners in old ratio as it is part of past profits.

Anurag Pathak
June 8, 2023

Assertion (A): General Reserve is not distributed among the old partners but is carried forward in the Balance Sheet prepared after the admission of a partner.

Ans – d) Explanation:- The General Reserve is part of the past profits and past profits belong to old partners in their profit sharing ratio. Thus if no further information is given the general reserve is credited to old partners…

Anurag Pathak
June 8, 2023

Assertion (A): Ajeet and Akash are partners sharing profits in the ratio of 3 : 2. They admit Prakash as a new partner for 1/4th share. Goodwill is valued at ₹ 1,00,000 and the new Partner will compensate both Ajeet and Akash by crediting ₹ 25,000 in the ratio of 3 : 2.

Ans – b) Explanation:- In the absence of any further information sacrificing ratio is always equal to old ratio. the prakash would bring 1/4th of ₹ 1,00,000 as premium of goodwill. It would be credited to sacrificing partners, Ajeet and…

Anurag Pathak
June 8, 2023

Assertion (A): At the time of admission of a partner, new partner should bring his share in goodwill in cash to compensate the Sacrificing Partner.

Ans – d) Explanation:- New partner may or may bring his share in goodwill in cash. if he does not bring cash, he can compensate through current account too. thus Assertion is incorrect and Reason (R) is correct.

Anurag Pathak
June 1, 2023

Assertion (A): At the time o admission of a partner, the value of the Goodwill of the firm is determined because the new partner compensates the sacrificing partner or partners.

Ans – b) Explanation:- The value of the goodwill of the firm is calculated as goodwill is calculated as the estimated future profits of the firm that firm would earn through goodwill. Once the new partner is admitted, he would…

Anurag Pathak
June 1, 2023

Assertion (A): Admission of a partner leads to dissolution of old firm and bringing new firm into existence.

Ans – d) Explanation:- Admission of a partner does not lead to the dissolution of an old firm. it just ends the old partnership and a new partnership is formed and the firm continues. Thus Assertion is incorrect. Old and…

Anurag Pathak
June 1, 2023

Assertion (A): Admission of a partner means reconstitution of the partnership whereby old partnership ceases to exist and new partnership comes into existence.

Ans – b) Admission of a partner means the reconstitution of the partnership as due to admission of a new partner profit sharing ratio changes and old partnership deed is canceled and new partnership deed is signed by all the…

Anurag Pathak
June 1, 2023

Ganga and Jamuna are partners sharing profits in the ratio of 2 : 1. They admit Saraswati for 1/5th share in future profits. On the date of admission, Ganga’s capital was ₹ 1,02,000 and Jamuna’s Capital was ₹ 73,000. Saraswati brings ₹ 25,000 as her share of goodwill and she agrees to contribute proportionate capital in the new firm. How much capital will be brought by Saraswati?

Ans – c) Solution;- Total adjusted capital of the old partners = ₹ 1,02,000 + ₹ 73,000 + 25000 = ₹ 2,00,000 Combine profit share of old partners = 1 – 1/5 = 4/5 Total Capital of the firm =…

Anurag Pathak
June 1, 2023

Ans – d) Explanation:- 1 Reserve funds are part of the accumulated profit. 2. Sacrificing Ratio = Old Ratio – New Ratio 3. Increase in the value of the liability is debited to Revaluation Account 4. Increase in the value…

Anurag Pathak
June 1, 2023

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