Admission of a new partner is an addition of a new partner as an associate or partner to a current enterprise is known as an admission of a partner. For a new partner to have the profit-sharing right of the partnership business, the new partner has to bring some fund which is referred to as his share of goodwill or a premium.
With accordance to the Partnership Act 1932, a new partner can be admitted into the enterprise only with the agreement of all the existing partners until and unless otherwise consented upon. With the admission of a new associate, the partnership enterprise is restructured and a new agreement is entered into; to carry on the trading concern of the enterprise.
Given below are important MCQs on Admission of New Partner to analyze your understanding of the topic. The answers are also given for your reference.
Admission of New Partner MCQs
1. In the case of admission of a partner, the entry for unrecorded investments will be
A) Debit Partner Capital A/cs and Credit Investment A/c
B) Debit Revaluation A/cs and Credit Investment A/c
C) Debit Investment A/cs and Credit Revaluation A/c
D) None of the above
2. Goodwill of a firm of A and B is valued at ₹30,000. It is appearing in the books at ₹12,000. C is admitted for 1/4share. What amount he is supposed to bring for goodwill?
A) ₹ 30,000
B) ₹ 4,500
C) ₹ 7,500
D) ₹ 10,500
3. Ramesh and Suresh are partners sharing profits in the ration of 2:1 respectively. Ramesh capital ₹ 1,02,000 and Suresh capital are ₹73,000. They admit Mahesh and agree to give him 1/5th share in future profit. Mahesh brings ₹14,000 as his share of goodwill. He agrees to contribute capital in the new profit-sharing ration. How much capital will be brought by Mahesh?
A) ₹ 43,750
B) ₹ 45,000
C) ₹ 47,250
D) ₹ 48,000
4. A and Bare in partnership sharing profits in the ratio of 3:2. They take C as a new partner. Goodwill of the firm is valued at 33,00,000 and C brings ₹30,000 as his share of goodwill in cash which is entirely credited to the capital account of A. New profit sharing ratio will be
5. X and Y are partners sharing profits in the ratio of 4:3. Z is admitted for 1/5th share and he brings in ₹1,40,000 as his share of goodwill in cash of which ₹1,20,000 is credited to X remaining amount to Y. New profit sharing ratio will be
A) 4: 3: 5
B) 2: 2: 1
C) 1: 2: 2
D) 2: 1: 2
6. A, B, C, and D are partners. A and B share 2/3rd of profits equally and Cand D share remaining profits in the ratio of 3: 2. Find the profit sharing ratio of A, B. C, and D
A) 5: 5: 3: 2
B) 7: 7: 6: 4
C) 2.5: 2.5: 8: 6
D) 3: 9: 8: 3
7. Sacrificing ratio is used to distribute ……………..in case of admission of a partner
C) Revaluation Profit
D) Balance in Profit and Loss Account
8. X and Y are partners in a company with a capital of ₹1,80,000 and ₹2,00,000. Z was admitted for 1/3rd share in profits and brings ₹3,40,000 as capital. Calculate the amount of goodwill.
A) ₹ 2,40,000
B) ₹ 1,00,000
C) ₹ 1,50,000
D) ₹ 3,00,000
9. A and B are partners sharing profits and losses in the ration of 5: 3. On admission, C brings ₹70,000 as cash and ₹43,000 against goodwill. The new profit ratio between A, B, and C is 7: 5: 4. The sacrifice ratio of A and B is
A) 3: 1
B) 1: 3
C) 4: 5
D) 5: 9
10. A, B, and C are partner sharing profits in ratio 3: 2: 1. They agree to admit D into the firm. A, B, and C agreed to give 1/3rd, 1/6th, 1/9th share of their profit. The share of profit of D will be
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