Partnership

Admission

Medium

A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. D is admitted into the firm for 1/4th share in profits, which he gets as 1/8th from A and 1/8th from B. The total capital of the firm is agreed upon as Rs. 1,20,000 and D is to bring in cash equivalent to 1/4th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments are Rs. 40,000, Rs. 35,000 and Rs. 30,000 respectively.

The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. A will bring in cash as capital after adjustment amount:

Rs. 40,000

Rs. 5,000

Rs. 15,000

Rs. 10,000

✅ Correct Option: 2

Looking at the given information:

Initial profit sharing ratio: A:B:C = 3:2:1

D is admitted for $\frac{1}{4}$ share, getting $\frac{1}{8}$ from A and $\frac{1}{8}$ from B.

New profit sharing ratio:

A's new share = $\frac{3}{6} - \frac{1}{8} = \frac{12}{24} - \frac{3}{24} = \frac{9}{24}$
B's new share = $\frac{2}{6} - \frac{1}{8} = \frac{8}{24} - \frac{3}{24} = \frac{5}{24}$
C's new share = $\frac{1}{6} = \frac{4}{24}$
D's new share = $\frac{1}{4} = \frac{6}{24}$

New ratio = 9:5:4:6

Capital calculation:

Total capital = Rs. 1,20,000

D's capital = $\frac{1}{4} \times 1,20,000$ = Rs. 30,000

Remaining capital for A, B, and C = 1,20,000 - 30,000 = Rs. 90,000

This should be distributed in the ratio 9:5:4

A's required capital = $\frac{9}{18} \times 90,000$ = Rs. 45,000
B's required capital = $\frac{5}{18} \times 90,000$ = Rs. 25,000
C's required capital = $\frac{4}{18} \times 90,000$ = Rs. 20,000

Adjustment required:

Given that after adjustments, A's capital is Rs. 40,000

A's required capital = Rs. 45,000

A's actual capital = Rs. 40,000

Amount A needs to bring in = 45,000 - 40,000 = Rs. 5,000

2025: 14 May Shift 2

Identify the incorrect journal entry related to Revaluation of Assets and Liabilities of a firm.

2025: 3 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, 2017 as a new partner for 1/5 share in the future profits. Sam brought Rs. 60,000 as his capital. Calculate the value of the goodwill of the firm if Sam brings his share of goodwill in Cash:

2026: 29 May Shift 2

A, B and T are partners in a firm sharing profits in the ratio of 3:2:1. Z is admitted into the firm for 1/4 share in profits, which he gets as, 1/8 from A and 1/8 from B. The total capital of the firm is agreed upon as Rs. 1,20,000 and Z is to bring in cash equivalent to 1/4 of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and T after all adjustments, are Rs. 40,000, Rs. 35,000 and Rs. 30,000 respectively. Calculate the cash brought in or paid to each partner.

2025: 4 June Shift 2

Any firm that earns normal profits or is incurring losses has ____________.

2026: 24 May Shift 1

Any change in the profit sharing ratio among existing partners may not involve adjustments in respect of:

2022: 20 July Shift 1

Match List - I with List - II.

List - I	List - II
(a) Building undervalued	(i) Credited to Partner's Capital Account
(b) Building overvalued	(ii) Credited to Revaluation Account
(c) Capital withdrawn	(iii) Debited to Revaluation Account
(d) Additional capital introduced	(iv) Debited to Partner's Capital Account

Choose the correct answer from the options given below :

The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. A will bring in cash as capital after adjustment amount:

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)