Commerce Exam > Commerce Notes > Accountancy Class 12 > Illustrations: Admission of a Partner
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Q1: (New Partner's is given but Sacrifices made by Old Partners are not given). A amd B are partners sharing profits in the ratio of 5:3 C is admitted forshare in the profits. Calculate of New protit-sharing Ratio of the partners.
Ans: Calculation of New Profit-sharing Ratio:
Old Profit-sharing Ratio of A and B =
Let the total share =1, C's share = 1/4, Remaining share of A and B =
Distribute the remaining share of 3/4 in the old profit-sharing ratio of 5:3 between A and B.
A's New share =
Thus, New Profit-sharing Ratio of A and B
Since, only share of the new partner is given C acquires his share from A and B in their old profits. Calculate New ratio.
Explanation: C's share (shown above) is taken out of the total (1). The remaining share is divided between A and B in their old ratio 5:3. A's and B's new shares are obtained by multiplying the remaining share by their respective ratio parts, as shown. The final profit-sharing ratio is therefore as given above in
Q2: A, B and C were partners in a firm shaing profits in 3:2:1 ratio. They admitted D for 10% profits. Calculate New Profit-sharing Ratio.
Ans: D's share =
Distribute the remaining share of
C's New share
Thus, New Profit-sharing Ratio A, B,C and D
Explanation: D takes 10% of the profits (shown above). The remaining 90% is shared by A, B and C in their original ratio 3:2:1. Each partner's new share equals their proportion of the remaining share, calculated as shown. The final combined ratio for A, B, C and D is given in
Q3: A and B are partners, They admit C for
Ans: Let the total share=1
Share of incoming partner C = 1/4 Remaining share
Existing parners' shares are being calculated by dividing remaining share in their future profit-share ratio (i.e., 2:1) as under.
A's New share
Thus, New Profit=sharing Ratio of A, B and C
Explanation: C's admitted share (shown) is taken from the total. The remaining share is distributed between A and B according to their agreed future ratio 2:1. A receives two parts and B one part of the remaining share, giving the new profit-sharing figures shown above in
Q4: A and B are partners sharing profits in the ratio of 5 : 4. They admit C for a
Ans: C's share of profit in the firm is 1/10 which he acquires from A and B in equal proportions.
It means A has surrendered
B has surrendered
New Share = Old Share-Share surrendered
A's New Share
B's New Share
C's Share
Thus, New Porfit-sharing Ratio of A, B and C
Explanation: C's one-tenth share is obtained equally from A and B, so each surrenders half of C's share. Subtract the surrendered portion from each old share to get A's and B's new shares. C's share is the sum of the surrendered amounts. The final ratio is shown in
Q5: Naresh and Namit are partners sharing porfits in the ratio of 2:1. They admit Nimesh into partnership of 25% share of profit. Nimesh acquired the share from old partners in the ratio of 3:2. Calculate New Profit-sharing Ratio.
Ans: Nimesh gets from Naresh
from Namit he gets
Nimesh's Share = Old Share-Share Surrendered
∴ New Share of Neresh
New Share of Namit
Share of Nimesh
Explanation: Nimesh's 25% is split between Naresh and Namit in the ratio 3:2. Each old partner surrenders their respective portion to Nimesh. Subtract the surrendered amount from each old share to obtain their new shares, and combine with Nimesh's share to get the final ratio shown in
Q6: (Old Partners Sacrifice Fraction of their Shares in Favour of New Partner).
A and B are partners in a firm sharing profits and losses in the ration of 3:2 A surrenders
Ans: A's share = 3/5, A surrenders in favour of C =
B's share = 2/5, B surrenders in favour of C =
New Share =Old Share-Share surrendered
So, A's New share =
So, B's New share =
C's share is the sum of shares surrendered by A and B
Thus, New Profit-sharing Ratio A, B and C
Explanation: Each old partner surrenders the stated fraction of their own share to C. Calculate A's and B's new shares by subtracting the surrendered portions from their old shares. C's share equals the total surrendered by A and B. The new profit-sharing ratio is then as shown in
Q7: On 1st April 2010m Sahil and Charu entered into partnership for sharing profit in the ratio of 4:3. They admitted Tanu as a new partner on 1st April, 2012 of 1/5th share which she acquired equally from Sahil and Charum Charu and Tanu earned profits at a higher rate than the normal rate of return for the year ended 31st March, 2013. Therefore, they decided to expand their business. To meet the requirments of additonal capital, they admitted Puneet as a new partner on 1st April, 2013 for 1/7th share in profit which he acquried from Sahil and Charu in 7 : 3 ratio.
Calculate:
(i) New profit-sharing ration of Sahil, Charu and Tanu for the year 2012 13
(ii) New profit-sharing ratio of Sahil, Chaur, Tanu and Puneet on Puneet's admission.
Ans: (i) Calculation of New Profit-sharing Ratio of Sahil, Charu and Tanu for th year 2012-13:
Sahil's Old Share = 4/7
Sahil surrenders in favour of Tanu
Sahil's New Share
Chaur's Old Share
Charu surrenders in favour of Tanu
Charu's New Share
Tanu's share
Thus, New Profit-sharing Ratio among Sahil, Charu and Tanu
(ii) New Profit-sharing Ratio of Sahil, Charu, Tanu and Puneet on Puneet's Admission:
Sahil's Old Share
Sahil surrenders in favour of Puneet
Sahil's New Share
Charu's Old Share
Tanu's share remains the same, i.e.,
Tanu's share remains the same, i.e.,
Thus, New Profit-sharing Ratio among Partners
Sahil : Charu : Tanu : Puneet = 13 : 10 : 7 : 5.
Explanation: (i) Tanu's 1/5th share is taken equally from Sahil and Charu, so each surrenders half of that amount. Subtract these amounts from Sahil's and Charu's old shares to obtain their new shares; Tanu's share is as shown. (ii) Puneet's 1/7th is acquired from Sahil and Charu in the ratio 7:3. Allocate Puneet's share between Sahil and Charu in that ratio, subtract from their existing shares and keep Tanu's share unchanged. The final ratio after Puneet's admission is therefore 13:10:7:5, as stated above.
Q8: L and M are partners in a firm sharing profits in the ratio of 5: 3. They admit N decide that the profit-shareing ratio between M and N shall be same as existing between L and M. Calculate new profit-sharing ratio and the sacrificing ratio.
Ans: As the ratio of L and M is 5 : 3. Ratio of M and N should be 5 : 3.
Since M's share is 60% of L's share
Thus, N's share is 60% of 3=1.8.
New Ratio of L, M and N =5:3:1.8 or 25:15:9.
Calculation of Sacrificing Ratio:
Share sacrificed=Old Share - New Share
L's sacrifice
Thus, sacrificing Ratio of L and M
Explanation: To make M:N the same as L:M, set M:N = 5:3 and determine N's share relative to M. Convert the decimal result to whole numbers by multiplying through to obtain a simple integer ratio 25:15:9. Each partner's sacrifice equals their old share less the new share; the sacrificing ratio is computed as shown in the placeholders above.
Q9: (Old Partners sacrifice Fraction of their Shares in Favour of New Partner).
A and B are partners in a firm sharing profits and losses in the ration of 5 : 3. A surrenders 1/20th of this share, whereas B surrenders 1/24th of his share in favour of C, a new partner. Calculate new profit-sharing ration and the sacrificing ratio.
Ans: A's share
So, A's New share =
B's share = 3/8, B surrrenders in favour of
B's New share
Thus, New Profit-sharing Ratio of A, B and C
Sacrificing Ratio of A and B
Explanation: Each partner surrenders the stated fraction of their own share to C. Calculate A's and B's new shares by subtracting their surrendered fractions from their original shares. C's share equals the sum of these surrendered amounts. The new profit-sharing ratio and the sacrificing ratio appear in the placeholders above.
Q10: (New profit-sharing Ratio of all Partners is given).
A and B are partners sharing profits in the ratio of 3 : 2. C is admitted into partnership. New profit-shareing ratio among A, B and C is 5: 3 : 2. Find the sacrificing ratio.
Ans: Sacrifice of share =Old share - New share
A's old share 3/5, A's new share = 5/10, thus, A's sacrifice is
A's old share = 2/5, B's new share = 3/10, thus, B's sacrifice is
Hence, Sacrificing Ratio of A and B
Explanation: For each old partner, subtract the new share from the old share to obtain the amount sacrificed. The sacrificing ratio is the ratio of these sacrifices and is shown in
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FAQs on Illustrations: Admission of a Partner - Accountancy Class 12 - Commerce
| 1. What is the process for admitting a partner in a commerce business? |  |
Ans. The process for admitting a partner in a commerce business typically involves several steps. Firstly, the existing partners must discuss and agree on the need for a new partner. Then, they should draft and sign a partnership agreement that outlines the terms and conditions of the partnership. Next, the new partner needs to invest capital or bring in other valuable assets as per the agreement. Finally, legal formalities such as registration with the relevant authorities and updating necessary documents should be completed.
| 2. Can a new partner be admitted without the consent of existing partners? | |
Ans. Generally, a new partner cannot be admitted without the consent of the existing partners in a commerce business. Admitting a new partner is a significant decision that affects the ownership, profits, and liabilities of the business. Therefore, the existing partners should be involved in the decision-making process and reach a mutual agreement before admitting a new partner.
| 3. What factors should be considered before admitting a partner in a commerce business? | |
Ans. Before admitting a partner in a commerce business, several factors should be considered. These include the new partner's skills, experience, and compatibility with existing partners. It is essential to evaluate their financial stability and ability to contribute capital or valuable assets to the business. Additionally, the potential partner's reputation, work ethics, and long-term commitment should also be taken into account.
| 4. Are there any legal requirements for admitting a partner in a commerce business? | |
Ans. Yes, there are legal requirements for admitting a partner in a commerce business. These requirements may vary depending on the jurisdiction and local regulations. Generally, the partnership agreement should be drafted and signed by all partners to establish the rights and responsibilities of each member. Additionally, the business may need to be registered with the appropriate government authorities and update necessary documents to reflect the new partner's involvement.
| 5. What are the potential benefits of admitting a partner in a commerce business? | |
Ans. Admitting a partner in a commerce business can bring various benefits. Firstly, it allows for the sharing of responsibilities, workload, and decision-making among partners, reducing the burden on individual partners. Secondly, additional capital or valuable assets brought in by the new partner can help finance business expansion or other growth opportunities. Thirdly, new partners may bring in expertise, skills, or networks that can enhance the business's overall capabilities and competitiveness.
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