Partnership

Admission

Easy

X and Y are partners in a firm sharing profits in the ratio of 4:1. Z is admitted in the firm for $\frac{1}{5}$ share. On the admission of Z there was a balance of Rs. 20,000 in general reserve. What would be the journal entry for distributing the reserve.

General Reserve a/c Dr Rs. 20,000

To X's Capital A/c Rs.16,000

To Y's Capital A/c Rs. 4,000

(Being Reserve distributed)

General Reserve a/c Dr Rs. 20,000

To X's Capital A/c Rs. 20,000

General Reserve a/c Dr Rs. 20,000

To Y's Capital A/c Rs. 20,000

General Reserve a/c Dr Rs. 20,000

To X's Capital A/c Rs. 10,000

To Y's Capital A/c Rs. 10,000

✅ Correct Option: 1

At admission, accumulated reserves are distributed among old partners in the old profit sharing ratio (4:1).

X's share = $20{,}000 \times \frac{4}{5} = 16{,}000$

Y's share = $20{,}000 \times \frac{1}{5} = 4{,}000$

Entry: General Reserve A/c Dr 20,000; To X's Capital 16,000; To Y's Capital 4,000.

2025: 14 May Shift 2

A and B are partners in a firm sharing profits in the ratio 2:1. C is admitted into the firm with 1/4th share in profits and he brings Rs. 30,000 as his capital. If the capitals of A and B are to be adjusted in their profit sharing ratio then the capital of A will be-

2025: 30 May Shift 1

Arrange the steps of method, Capitalization of Average for the calculation of goodwill, in the correct sequence:

(A) Capitalize the average profits on the basis of the normal rate of return to ascertain the capitalized value of average profits as follows:

Average Profits × 100/Normal Rate of Return

(B) Ascertain the average profits based on the past few years' performance.

(C) Ascertain the actual firm's capital (net assets) by deducting outside liabilities from the total assets (excluding goodwill and fictitious assets).

Firms' Capital = Total Assets (excluding goodwill) – Outside Liabilities

Where outside Liabilities include both long term and short term Liabilities

(D) Compute the value of goodwill by deducting net assets from the capitalized value of average profits.

Choose the correct answer from the options given below:

2026: 23 May Shift 2

Match the LIST-I with LIST-II

LIST-I		LIST-II
A.	Sacrificing ratio	I. New ratio - Old ratio
B.	Gaining ratio	II. Credit Side of Revaluation A/c
C.	Undervaluation of Stock	III. Old ratio - New ratio
D.	Overvaluation of Stock	IV. Debit Side of Revaluation A/c

Choose the correct answer from the options given below:

2026: 12 May Shift 1

Arrange the following steps for calculation of goodwill using the Super Profit Method:

(A) Calculate goodwill by multiplying the super profits by the given number of years' purchase.

(B) Calculate the super profits by deducting normal profit from the average profits.

(D) Calculate the average profit.

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Which of the following is not the main factors affecting the value of Goodwill?

2026: 23 May Shift 2

What is the correct sequence for calculating goodwill by Capitalisation of Average Profit Method?

A. Compute the value of goodwill

B. Find Capitalized value of the average profits

C. Ascertain the average profits

D. Ascertain the actual firm's capital

Choose the correct answer from the options given below:

X and Y are partners in a firm sharing profits in the ratio of 4:1. Z is admitted in the firm for 15\frac{1}{5}51​ share. On the admission of Z there was a balance of Rs. 20,000 in general reserve. What would be the journal entry for distributing the reserve.

Solution

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CUET Accountancy Past Year Questions (Topic-Wise)

X and Y are partners in a firm sharing profits in the ratio of 4:1. Z is admitted in the firm for $\frac{1}{5}$ share. On the admission of Z there was a balance of Rs. 20,000 in general reserve. What would be the journal entry for distributing the reserve.