Explanation of NCERT Solutions for Class 12 Accountancy Chapter - Admission of a Partner-2


Admission of a Partner-2 is a chapter in Class 12 Accountancy that deals with the process of admitting a new partner into an existing partnership firm.


The NCERT Solutions for this chapter provide a comprehensive understanding of the admission of a new partner. The solutions cover the following topics:

• Calculation of the new profit-sharing ratio


• Treatment of goodwill


• Treatment of revaluation of assets and liabilities


• Calculation of the new capital of partners


• Adjustment of accumulated profits and losses


• Preparation of the new balance sheet

Partnership account is a record of all the transactions in a partnership firm. The account includes the following:

• Capital accounts of partners


• Current accounts of partners


• Profit and loss account


• Balance sheet

Admission of a new partner involves the following steps:

• Determination of the new profit-sharing ratio


• Valuation of goodwill


• Revaluation of assets and liabilities


• Calculation of the new capital of partners


• Adjustment of accumulated profits and losses


• Preparation of the new balance sheet

The new profit-sharing ratio is determined based on the agreement between the existing partners and the new partner. The ratio is calculated based on the following formula:

New Profit-Sharing Ratio = (Old Ratio x Total Profit) / New Partner's Share of Profit


Goodwill is the value of the reputation of a partnership firm. It is calculated as the difference between the total value of the firm and its net assets. The treatment of goodwill depends on the agreement between the partners. Goodwill can be:

• Written off


• Shared among the partners


• Retained in the firm

Revaluation of assets and liabilities is done to adjust their values to their current market values. The revaluation results in the following:

• Increased or decreased value of assets


• Increased or decreased value of liabilities


• Increased or decreased capital of partners

The new capital of partners is calculated based on the following formula:

New Capital = Old Capital + Share of Profit - Share of Loss + Additional Capital - Drawings


Accumulated profits and losses are adjusted as per the agreement between the partners. The profits and losses are transferred to the capital accounts of the partners.


The new balance sheet is prepared after making the necessary