Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

Based on following, answer the question.

Amrita and Kalyani are partners sharing profits in the ratio of 3:2. They decided to expand the business by admitting Suraj as new partner for 1/4th share. Suraj's share of goodwill is valued at ₹90,000 for which he compensated Amrita and Kalyani in the ratio of 1:4. Following information is also provided:

Particulars Book value (₹) Revalued figure (₹)
Machinery 25,00,000 27,00,000
Land 10,00,000 50,00,000
Computers 2,50,000 50,000

 Workmen Compensation Fund  ₹5,00,000. Claim against workmen compensation is ₹2,00,000 and goodwill appeared in the books at ₹60,000.

Share of revaluation profit of Amrita and Kalyani is:

Options:

₹2400000 and ₹1600000

₹1600000 and ₹2400000

₹800000 and ₹3200000

₹2000000 and ₹2000000

Correct Answer:

₹2400000 and ₹1600000

Explanation:
Particulars Amount (₹) Particulars Amount (₹)
To Computer A/c 200000 By Machinery A/c 200000
To Profit distributed in old partners 4000000 By  Land A/c 4000000
  4200000   4200000

Amrita and Kalyani shares this revaluation profits in the ratio of 3:2.
Amrita share = 4000000 x 3/5
                     = ₹2400000
Kalyani share = 4000000 x 2/5
                     = ₹1600000