Partnership

Admission

Medium

common

A and B are partners sharing profits in the ratio of 2:1. C is admitted into the firm for 1/4 share of profits. C brings in Rs. 20,000 in respect of his capital. The capitals of old partners A and B, after all adjustments relating to goodwill, revaluation of assets and liabilities, etc., are Rs. 45,000 and Rs. 15,000 respectively, It is agreed that partners' capitals should be according to the new profit sharing ratio. A's Capital in the new firm will be:

Rs. 80,000

Rs. 20,000

Rs. 40,000

Rs. 45,000

✅ Correct Option: 3

Finding the new profit sharing ratio:

Old ratio of A and B = 2:1

C is admitted for 1/4 share

Remaining share for A and B = 1 - 1/4 = 3/4

This remaining share is divided between A and B in their old ratio 2:1

A's new share = $\frac{3}{4} \times \frac{2}{3} = \frac{1}{2}$

B's new share = $\frac{3}{4} \times \frac{1}{3} = \frac{1}{4}$

C's share = $\frac{1}{4}$

New profit sharing ratio = A:B:C = $\frac{1}{2} : \frac{1}{4} : \frac{1}{4}$ = 2:1:1

Calculating capitals according to new ratio:

After all adjustments:

A's capital = Rs. 45,000
B's capital = Rs. 15,000
C's capital = Rs. 20,000

Total capital of the firm = 45,000 + 15,000 + 20,000 = Rs. 80,000

Since capitals should be in the new profit sharing ratio 2:1:1 (total = 4 parts)

A's new capital = $80,000 \times \frac{2}{4}$ = Rs. 40,000

B's new capital = $80,000 \times \frac{1}{4}$ = Rs. 20,000

C's capital = $80,000 \times \frac{1}{4}$ = Rs. 20,000

A currently has Rs. 45,000 but needs Rs. 40,000, so Rs. 5,000 will be withdrawn by A to bring the capital in line with the profit sharing ratio.

Answer: Rs. 40,000

2025: 4 June Shift 2

Hem and Nem are partners in a firm sharing profits in the ratio of 3:2. Their capitals were Rs. 80,000 and Rs. 50,000 respectively. They admitted Sam on Jan. 1, 2025 as a new partner for 1/5 share in the future profits. Sam brought Rs. 60,000 as his capital. Sam share of goodwill will be:

2025: 30 May Shift 2

The important methods of valuation of goodwill are as follows:

(A) Average Profits Method

(B) Normal Profits Method

(D) Capitalization Method

Choose the correct answer from the options given below:

2025: 2 June Shift 2

For the right to get a share in future profits of a partnership firm, a newly admitted partner will have to bring :-

2026: 20 May Shift 1

If nothing is specified as to how does the new partner acquire his share from the old partners; it may be assumed that he gets it from them:

2025: 27 May Shift 1

Arrange in correct sequence at a time of admission of partner-

(A) Adjustments of capital accounts.

(B) Valuation of goodwill

Choose the correct answer from the options given below:

(A), (B), (C)
(A), (C), (B)
(B), (A), (C)
(C), (B), (A)

2025: 24 May Shift 1

P, Q and R are partners in a firm. If S is admitted as a new partner then:

Solution

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