Question:
Nita, Vidur and Mita were partners in a firm sharing profits and losses in the ratio of 3 : 4 : 1. On 1st April 2024, they decided to admit Samir as a new partner. The new profit sharing ratio between Nita, Vidur, Mita and Samir will now be 1 : 1 : 1 : 1. The balance sheet of Nita, Vidur and Mita before Samir’s admission showed machinery at ₹ 6,00,000. On the date of admission, it was found that the machinery is overvalued by 20%. The value of machinery shown in the new Balance Sheet after Samir’s admission will be :
Nita, Vidur and Mita were partners in a firm sharing profits and losses in the ratio of 3 : 4 : 1. On 1st April 2024, they decided to admit Samir as a new partner. The new profit sharing ratio between Nita, Vidur, Mita and Samir will now be 1 : 1 : 1 : 1. The balance sheet of Nita, Vidur and Mita before Samir’s admission showed machinery at ₹ 6,00,000. On the date of admission, it was found that the machinery is overvalued by 20%. The value of machinery shown in the new Balance Sheet after Samir’s admission will be :
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When admitting a new partner, always adjust asset values to their fair market value before preparing the new balance sheet.
Updated On: Jul 4, 2025
- ₹ 7,50,000
- ₹ 4,80,000
- ₹ 7,20,000
- ₹ 5,00,000
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The Correct Option is B
Solution and Explanation
Step 1: Find the overvaluation amount.
\[ \text{Overvaluation} = 20% \text{ of } ₹ 6,00,000 = ₹ 1,20,000 \] Step 2: Reduce the machinery to its fair value.
\[ \text{Correct Machinery Value} = ₹ 6,00,000 - ₹ 1,20,000 = ₹ 4,80,000 \] Final Answer: ₹ 4,80,000
\[ \text{Overvaluation} = 20% \text{ of } ₹ 6,00,000 = ₹ 1,20,000 \] Step 2: Reduce the machinery to its fair value.
\[ \text{Correct Machinery Value} = ₹ 6,00,000 - ₹ 1,20,000 = ₹ 4,80,000 \] Final Answer: ₹ 4,80,000
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Top Questions on Admission of a Partner
Aryan and Adya were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2024 was as follows :
Balance Sheet (Before Dev's Admission)
Liabilities Amount (₹) Assets Amount (₹) Capital: Aryan 3,20,000 Machinery 3,90,000 Capital: Adya 2,40,000 Furniture 80,000 Workmen’s Compensation Reserve 20,000 Debtors 90,000 Bank Loan 60,000 Less: Provision for Doubtful Debts (1,000) Creditors 48,000 Net Debtors 89,000 Stock 77,000 Cash 32,000 Profit and Loss A/c 20,000 Total ₹6,88,000 Total ₹6,88,000 Note:
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