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Admission of a Partner

Read the following passage and answer question from :The Balance sheet of Himanshu, Pranav and Tushar who were sharing profits in proportion to their

Reading Comprehension

Read the following passage and answer question from :
The Balance sheet of Himanshu, Pranav and Tushar who were sharing profits in proportion to their capital stood as follows :

Addition Information :
(A) On 1st April 2022, they admitted Rachit into partnership for 1/6th share in future profit
(B) Rachit will bring ₹25,000 for capital and ₹15,000 for goodwill.
(C) A provision for doubtful debts of 7% was to be made.
(D) Land and building is to be appreciated to 120%.
(E) Machinery is decreased by ₹1,500.
On the basis of above case give answer to question :

1) Question

Select the treatment of Investment Fluctuation fund on the admission of Rachit.

Transfer to credit side of All Partner's Capital A/c

Transfer to liability side of New Balance Sheet

Transfer to Debt side of Revaluation A/c

Transfer to Credit side of Old Partner's Capital A/c

Solution

Correct option is D

Investment Fluctuation fund belong to partners before reconstitution of partnership. Hence, it shall be credited to old partner’s capital in old ratio.

2) Question

Identify gain/loss on Revaluation of assets:

₹5,500 gain

₹5,080 gain

₹5,500 loss

₹5,080 loss

Solution

Correct option is B

3) Question

Determine the amount compensated by Rachit to Pranav :

₹15,000

₹4,500

₹7,500

₹3,000

Solution

Correct option is B

4) Question

Identify the Journal Entry that is to be recorded for distribution of profit and loss account appearing in Balance Sheet among partners :

A

B

C

D

Solution

Correct option is C

5) Question

Determine the new profit-sharing ratio among partners, after Rachit's admission.

2 : 1 : 2 :1

5 : 3 : 2 : 2

5 : 2 : 3 : 2

3 : 5 : 2 : 2

Solution

Correct option is B

Free Tests

Free

Must Attempt

CUET 2025 English Language Mock 01

English

50 Questions
200 Marks
45 Mins

English

Reading Comprehension

Select the treatment of Investment Fluctuation fund on the admission of Rachit.

Transfer to credit side of All Partner's Capital A/c

Transfer to liability side of New Balance Sheet

Transfer to Debt side of Revaluation A/c

Transfer to Credit side of Old Partner's Capital A/c

Correct option is D

Identify gain/loss on Revaluation of assets:

₹5,500 gain

₹5,080 gain

₹5,500 loss

₹5,080 loss

Correct option is B

Determine the amount compensated by Rachit to Pranav :

₹15,000

₹4,500

₹7,500

₹3,000

Correct option is B

Identify the Journal Entry that is to be recorded for distribution of profit and loss account appearing in Balance Sheet among partners :

A

B

C

D

Correct option is C

Determine the new profit-sharing ratio among partners, after Rachit's admission.

2 : 1 : 2 :1

5 : 3 : 2 : 2

5 : 2 : 3 : 2

3 : 5 : 2 : 2

Correct option is B

Free Tests

CUET 2025 English Language Mock 01

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