Partnership

Admission

Medium

common

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-

Rs. 50,000

Rs. 60,000

Rs. 30,000

Rs. 40,000

✅ Correct Option: 2

C is admitted with 1/4th share in profits. This means the remaining share for old partners A and B = 1 - 1/4 = 3/4

Since A and B were sharing profits in ratio 2:1, they will now share this remaining 3/4 in the same ratio.

A's new share = 3/4 × 2/(2+1) = 3/4 × 2/3 = 1/2

B's new share = 3/4 × 1/(2+1) = 3/4 × 1/3 = 1/4

C's share = 1/4

New profit sharing ratio = A:B:C = 1/2 : 1/4 : 1/4 = 2:1:1

C brings Rs. 30,000 as capital for 1/4 share in profits.

When capitals are to be adjusted in profit sharing ratio, C's capital should be proportionate to his profit share.

If C's capital of Rs. 30,000 represents 1/4 share, then:

Total capital of the firm = Rs. 30,000 × 4 = Rs. 1,20,000

Now, capitals should be in the new profit sharing ratio 2:1:1

A's capital = Total capital × A's share ratio = Rs. 1,20,000 × 2/4 = Rs. 60,000

B's capital = Rs. 1,20,000 × 1/4 = Rs. 30,000

C's capital = Rs. 30,000

Therefore, the capital of A will be Rs. 60,000.

2025: 3 June Shift 2

At the time of admission of a new partner, in the case of fixed capital method, if the sacrificing partner withdraw their amounts of goodwill (in full or in part), the following journal entry will be recorded :-

2026: 11 May Shift 1

Usha and Disha are partners sharing profits in the ratio of 2:1. Usha's son Ashish was admitted for 1/4th share of which 1/8th was gifted by Usha to her son and the remaining was contributed by Disha. The goodwill of the firm is valued at Rs. 40,000. How much of the premium for goodwill will be credited to the old partners' capital account in case of admission of Ashish.

2022: 16 July Shift 2

Sunil and Ravi are partners in a firm sharing profits in the ratio of 3:1. Amar is admitted for 1/4 share. The Sacrificing ratio of Sunil and Ravi is

2026: 12 May Shift 1

In adjustment of capital during admission of a partner, certain steps are followed. Arrange them in a sequence:

(A) Calculation of new profit sharing ratio

(B) Calculate required capitals of old partners

(D) Calculate firm's capital

Choose the correct answer from the options given below:

2025: 27 May Shift 2

Identify the steps involved in calculating goodwill under the capitalization of super profits method:

(A) Calculate capital of the firm, which is equal to total assets (excluding goodwill and fictitious assets) minus outside liabilities

(B) Multiply the super profits by the required rate of return multiplier

(D) Calculate super profits by deducting normal profits from average profits

(E) Calculate average profit for past years

Choose the correct answer from the options given below:

2022: 20 Aug Shift 2

Valuation of Goodwill takes place on which of the following occasions:

A. Incorporation of a new business

B. Change in profit sharing ratio

C. Amalgamation of partnership firm

D. Admission of a partner

E. Dissolution of firm or closure of business

Choose the correct answer from the options given below:

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-

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