WORKSHEET

ADMISSION AND DISSOLUTION - PARTNERSHIP

Class 12 - Accountancy

1. Deferred revenue expenditure given on the Asset side of the Balance sheet will be: [1]

a) Debited to old partners b) Credited to all partners

c) credited to sacrificing partners d) Debited to sacrificing partners

2. Asha and Nisha were partners in a firm sharing profits and losses in the ratio 3 : 1. Charu was admitted as a new [1]

partner for 1 th share in the profits of the firm which she acquired equally from Asha and Nisha. The new profit
4

sharing ratio of Asha, Nisha and Charu will be:

a) 1 : 1 : 2 b) 3 : 1 : 4

c) 1 : 2 : 1 d) 5 : 1 : 2
3. A and B are partners sharing profits and losses in the ratio of 5 : 3. On admission, C brings ₹ 70,000 as cash and [1]
₹ 43,000 against Goodwill. New profit ratio between A, B and C is 7 : 5 : 4. The sacrificing ratio of A and B is:

a) 3 : 1 b) 1 : 3

c) 4 : 5 d) 5 : 9
4. A and B are partners in a firm sharing profits in the ratio of 2 : 1. C is admitted as a partner. A and B surrender [1]
1

2
of their respective share in favour of C. C is to bring his share of premium for goodwill in cash. The goodwill
of the firm is estimated at ₹ 60,000. Credit will be given to:

a) A ₹ 40,000; B ₹ 20,000 b) A ₹ 30,000; B ₹ 30,000

c) A ₹ 15,000; B ₹ 15,000 d) A ₹ 20,000; B ₹ 10,000

5. Atul and Neera were partners in a firm sharing profits in the ratio of 3 : 2. They admitted Mitali as a new partner. [1]
Goodwill of the firm was valued at ₹ 2,00,000. Mitali brings her share of goodwill premium of ₹ 20,000 in cash,
which is entirely credited to Atul's Capital Account.
New profit sharing ratio:

a) 5 : 4 : 1 b) 5 : 4 : 3

c) 5 : 4 : 2 d) 5 : 4 : 4
6. State the order of payment of the following, in case of dissolution of partnership firm: [1]
i. To each partner proportionately what is due to him/her from the firm for advances as distinguished from
capital (i.e., Partner's Loan);
ii. To each partner proportionately what is due to him on account of capital; and
iii. For the debts of the firm to the outside parties.

a) (i), (ii), (iii) b) (ii), (iii), (i)

c) (i), (iii), (ii) d) (iii), (i), (ii)

7. Lata, Mehu and Namita were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decided to [1]

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 dissolve the firm on 31st March, 2023. Creditors took over stock of book value of ₹ 80,000 at 80%, in part
settlement of their amount of ₹ 90,000. The balance amount was paid to the creditors by cheque. The amount
paid by cheque to the creditors will be:

a) ₹ 64,000 b) ₹ 1,44,000

c) ₹ 80,000 d) ₹ 26,000
8. Deferred Revenue expenditure given in the balance sheet will be: [1]

a) Credit to partners’ capital A/c b) Credit to Realisation A/c

c) Debit to Partners’ capital/current A/c d) Debit to Realisation A/c

9. Realisation Account differs from Revaluation Account as [1]

a) Prepared at a number of times during the b) Prepared only twice during the life of a firm
life of a firm

c) Prepared only once during the life of a firm d) Prepared at three times during the life of a
firm
10. An unrecorded asset was valued at ₹ 1,00,000. On firm’s dissolution, it was sold for 52%. Realisation account [1]
will be credited with:

a) ₹ 52,000 b) ₹ 48,000

c) - ₹ 48,000 d) ₹ 1,00,000
11. A and B carrying on business as partners used to share profits and losses thus; A = 4

7
ths and B = 3

7
ths, and [3]
goodwill appeared in the books of the firm at ₹ 2,80,000 when C was admitted as a partner having 1

7
th share in
profits and losses. C was asked to pay a premium of ₹ 75,000 for goodwill, and the profit-sharing ratio as
between A and B remained unchanged. Show entries in the journal of the firm.
12. A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the partnership with 1

4
th share in [3]
future profits. The new profit sharing ratio is 5 : 4 : 3. C brings into the business ₹ 50,000 for his capital but
could not bring any amount for goodwill. The firm’s goodwill on C's admission was valued at ₹ 48,000. Pass
journal entries.
13. Give the necessary Journal entries for the following transactions in case of dissolution of a partnership firm after [3]
various assets (other than cash and bank) and third-party liabilities have been transferred to Realisation Account:
i. Dissolution expenses ₹ 5,000 were paid by the firm.
ii. An unrecorded computer not appearing in the books of accounts realised ₹ 2,200.
iii. A creditor for ₹ 1,40,000 accepted building valued at ₹ 1,80,000 and paid to the firm ₹ 40,000.
iv. Loss on realisation ₹ 10,000 was divided between the partners Subhi and Sudha in the ratio of 4 : 1.
14. Record necessary journal entries in the following cases: [3]
i. Creditors worth ₹ 85,000 accepted ₹ 40,000 as cash and Investment worth ₹ 43,000, in full settlement of their
claim.
ii. Creditors were ₹ 16,000. They accepted Machinery valued at ₹ 18,000 in settlement of their claim.
iii. Creditors were ₹ 90,000. They accepted Buildings valued ₹ 1,20,000 and paid cash to the firm ₹ 30,000.
15. Seeta and Sanjay were partners in a firm with capitals of ₹ 1,00,000 and ₹ 80,000 respectively. They admitted [4]
Neha on 1st April 2022 as a new partner for 1

4
th share in the future profits of the firm. Neha brought ₹ 90,000 as

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 her capital. Neha acquired her share as 1

12
th from Seeta and the remaining from Sanjay.
Calculate the value of goodwill of the firm and pass the necessary journal entries on Neha’s admission.
16. A and B are partners sharing profits in the ratio of 5 : 3. They admit C as a partner for 1

3
rd share. His share of [4]
Goodwill is ₹ 32,000. Give journal entries in the following cases :
a. When the amount of goodwill is paid privately.
b. When the goodwill is received in cash and retained in the business.
c. When the goodwill is received in cash and withdrawn by old partners.
d. When C is unable to bring the goodwill in cash.
17. A, B and C were equal partners On 31st March 2019 their balance sheet stood as: [4]

Liabilities ₹ Assets ₹

Creditors 50,400 Cash 3,700

Reserve 12,000 Stock 20,100

Capital A /c: Debtors 62,600

A 40,000 Loan to A 10,000

B 25,000 Investments 16,000

C 15,000 Furniture 6,500

Building 23,500

Total 1,42,400 Total 1,42,400

The firm was dissolved on the above date on the following terms:
i. For the purpose of dissolution Investments were valued at ₹ 18,000 and A took over the investments at this
value,
ii. Fixed Assets realised ₹ 29,700 whereas Stock and Debtors realised ₹ 80,000.
iii. Expenses of Realisation amounted to ₹ 1,300.
iv. Creditors allowed a discount of ₹ 800.
v. One bill receivable for ₹ 1,500 under discount was dishonoured as the acceptor had become insolvent and
was unable to pay anything and hence the bill had to be met by the firm.
Prepare the Realisation Account, Cash Account and Partners' Capital Accounts showing how the accounts would
finally be settled among the partners
18. Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2013, [4]
their Balance Sheet was as follows-

Liabilities ₹ Assets ₹

Creditors 1,70,000 Bank 1,10,000

Workmen Compensation Reserve 2,10,000 Debtors 2,40,000

General Reserve 2,00,000 Stock 1,30,000

Ramesh's Current Account 80,000 Furniture 2,00,000

Capital A/cs: Machinery 9,30,000

Ramesh 7,00,000 Umesh's Current Account 50,000

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 Umesh 3,00,000 10,00,000

16,60,000 16,60,000

On the above date the firm was dissolved.

a. Ramesh took over 50% of stock at ₹ 10,000 less than book value. The remaining stock was sold at a loss of ₹
15,000. Debtors were realised at a discount of 5%.
b. Furniture was taken over by Umesh for ₹ 50,000 and machinery was sold for ₹ 4,50,000.
c. Creditors were paid in full.
d. There was an unrecorded bill for repairs for ₹ 1,60,000 which was settled at ₹ 1,40,000. Prepare Realisation
Account,
19. Sumit, Amit and Vinit are partners sharing profit in the ratio of 5 : 3 : 2. Their Balance Sheet as on March 31, [4]
2017 was as follows:
Balance Sheet of Sunit, Amit and Vinit
as on March 31, 2017

Liabilities Amount ₹ Assets Amount ₹

Capitals: Machinery 80,000

Sumit 40,000 Investments 1,50,000

Amit 50,000 Stock 10,000

Vinit 40,000 1,50,000 Debtors 35,000

Profit and Loss 10,000 Cash at bank 15,000

Mr. Amit’s loan 40,000

Sundry creditors 90,000

2,90,000 2,90,000

The firm was dissolved on that date. Amit took over his wife’s loan. One of the Creditors for ₹ 2,600 did not
claim the amount. Assets realised as follows:
i. Machinery was sold for ₹ 70,000,
ii. Investments with book value of ₹ 1,00,000 were given to Creditors in full settlement of their account. The
remaining Investments were taken over by Vinit at an agreed value of ₹ 45,000,
iii. Stock was sold for ₹ 11,000 and Debtors for ₹ 3,000 proved to be bad,
iv. Realisation expenses were ₹ 1,500.
Prepare ledger accounts to close the books of the firm.
20. Ishu and Vishu are partners sharing profits in the ratio of 3 : 2. Their Balance sheet as at 31st March 2018 was as [6]
follows:

Liabilities ₹ Assets ₹

Creditors 66,000 Cash at Bank 87,000

General Reserve 9,000 Debtors 42,000

Investment Fluctuation Fund 5,000 Less: provision for doubtful debts 7,000 35,000

Capitals:

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 Ishu 1,19,000 Investment (market price 19,000) 21,000

Vishu 1,12,000 2,31,000 Buildings 98,000

Plant and Machinery 70,000

3,11,000 3,11,000

Nishu was admitted on 1st April 2018 for 1/6th share on the following terms:
i. Nishu will bring ₹56,000 as his share of capital.
ii. Goodwill of the firm is valued at ₹84,000 and Nishu will bring his share of goodwill in cash.
iii. Plant and Machinery be appreciated by 20%.
iv. All debtors are good.
v. There is a liability of ₹9,800 included in Creditors that is not likely to rise.
vi. Capital of Ishu and Vishu will be adjusted on the basis of Nishu's capital and any excess or deficiency will be
made by withdrawing or bringing in cash by the concerned partner.
Prepare the Revaluation Account, the Partners' Capital Accounts, and the Balance Sheet of the firm after the
above adjustments.
21. S and T were partners in a firm sharing profits in the ratio of 7 : 3. Their Balance Sheet on 31st march, 2010 was [6]
as follows :

Liabilities (Rs) Assets (Rs)

Creditors 40,000 Bank 36,000

Bank Overdraft 20,000 Debtors 46,000

General Reserve 10,000 Less: Provision 2,000 44,000

Capital Accounts: Stock 50,000

S 50,000 Machinery 30,000

T 40,000 90,000

1,60,000 1,60,000

On 1st April, 2010, they admitted R as a new partner for 1/4th share in profits on the following terms :
1. R will bring Rs 30,000 for his capital and Rs 10,000 for goodwill premium.
2. 20% of General Reserve will be transferred to provision for bad and doubtful debts.
3. Stock and Machinery will be depreciated by 40%.
4. Capital accounts of S and T will be adjusted on the basis of R’s capital, for this purpose, actual cash will be
brought in or paid off to S and T as the case may be.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the firm.

22. C, D, E were partners in a firm sharing profits in the ratio of 3 : 1 : 1. Their Balance Sheet as at 31st March, 2022 [6]
was as follows:
Balance Sheet of C, D and E as at 31st March, 2022

Liabilities Amount (₹) Assets Amount (₹)

Capitals: Machinery 3,20,000

C 4,00,000 Investments 3,00,000

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D 2,00,000 Stock 2,00,000

E 1,00,000 7,00,000 Debtors 1,00,000

C's Loan 1,20,000 Cash at Bank 2,00,000

Sundry Creditors 1,00,000

Bills payable 2,00,000

11,20,000 11,20,000

On the above date the firm was dissolved due to certain disagreement among the partners:
i. Machinery of ₹ 3,00,000 were given to creditors in full settlement of their account and remaining machinery
was sold for ₹ 10,000 .
ii. Investments realised ₹ 2,90,000.
iii. Stock was sold for ₹ 1,80,000.
iv. Debtors for ₹ 20,000 proved bad.
v. Realisation expenses amounted to ₹ 10,000.
Prepare Realisation Account.

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