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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

Angle and Circle were partners in a firm. Their Balance Sheet showed Furniture at ₹ 2,00,000; Stock at ₹ 1,40,000; Debtors at ₹ 1,62,000 and Creditors at ₹ 60,000. Square was admitted and new profit sharing ratio was agreed at 2 : 3 : 5. Stock was revalued at ₹ 1,00,000, Creditors of ₹ 15,000 are not likely to be claimed, Debtors for ₹ 2,000 have become irrecoverable and Provision for doubtful debts to be provided @ 10%. Angle’s share in loss on revaluation amount to ₹ 30,000. Revalued value of Furniture will be

Ans – d) Solution:- Revaluation loss = 30,000 × 2 = ₹ 60,000 Particulars ₹ Particulars ₹ To Furniture A/c (B/f) Stock A/c To Debtors A/c To Provision for doubtful Debts A/c 17,000 40,000 2,000 16,000 By Creditors A/c…

Anurag Pathak
June 1, 2023

X and Y are partners sharing profits in the ratio of 2 : 1. They admit Z into the partnership for 1/4th share in profits for which he brings ₹ 20,000 as his share of capital. Hence, the adjusted capitals of X and Y will be

Ans – a) Solution:- Calculate of the new profit sharing ratio Old Ratio = 2 : 1 Z admitted for 1/4th share Remaining share = 1 – 1/4 = 3/4 X’s new share = 3/4 × 2/3 = 6/12 Y’s…

Anurag Pathak
June 1, 2023

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