DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

NAME :N SAI RAM

DESIGNATION :HEAD OF SECTION
SUBJECT : ACCOUNTS
Subject Code : CCP – 402
Major Topic : PARTNERSHIP
Sub Topic : ADMISSION
Duration : 50 Minutes
Teaching Aids : PPT
 Partnership

Objective:
 On completion of this period, you would be able to
prepare the account on admission
 ILLUSTRATION

Ram and Krishna are partners in a firm sharing profits

as 75% and 25% on 1.1.2008, their position was as
follows:
LIABILITIES ASSETS
Creditors 20,000 Plant 40,000
Capitals Stock 10,000
Ram 50,000 Debtors 30,000
Krishna 30,000 80,000 Cash 20,000

1,00,000 1,00,000
Recap

In the previous class we have already

learned
 Preparation of partner capital account
 Preparation of new balance sheet of the form after
admission of a new of partner
They agreed to admit Vikram for the share on the
following terms.
2) Vikram to bring Rs. 20,000/- as goodwill
3) Vikram to invest half of the combined capital of
Ram & Krishna after working all the
adjustments.
4) Plant and stock to be depreciated at 10% and
20% respectively
5) A reserve of 10% on debtors to be raised.
Prepare Ledger accounts and New Balance
Sheet.
LEDGER ACCOUNTS

REVALUATION A/C

To Plant 4,000 By Ram’s Capital 6,750

To Stock 2,000 By Krishna’s
To Debtors 3,000 Capital 2,250
9,000
9,000
 Ram’s capital A/c

To Revaluation a/c 6,750 By Balance b/d 50,000

To Balance c/d 58,250 By goodwill 15,000

65,000 65,000
 Krishna’s capital A/c

To Revaluation a/c 2,250

By Balance b/d 30,000
To Balance c/d 32,750
By goodwill 5,000
35,000

35,000
Working notes

Capital of Vikram = half of the combined capitals

of Ram & Krishna
Capital of Ram 58,250
Capital of Krishna 32,750
Combined capital 91,000

Half of the combined capital = 91,000/2

= 45,500
 Vikram’s capital A/c

To Cash 45,500 By Balance c/d 45,500

45,500
45,500
 Goodwill A/c

To Ram’s Capital 15,000 By Cash 20,000

To Krishna
Capital 5,000

20,000
20,000
85,000 85,000
 Cash A/c

To Balance b/d 20,000

To Vikram’s By Balance c/d 85,000
Capital a/c 45,500
To goodwill 20,000

85,000
85,000
 New Balance Sheet

Liabilities Assets
Creditors 20,000 Cash 85,000
Capitals Plant 40000-4000 36,000
Ram 58,250 Stock 10000-2000 8,000
Krishna 32,750 Debtors 30000
Vikram 45,500 1,36,500 Less: Provision 3000
27,000
1,56,500 1,56,500
 Summary
In this session we have learned about
 Asset raining the new partner capital on the basis
of add partner capital balance
 Preparation of new balance sheet of the firm after
admission of a new partner
Questions

1. What is sacrificing ratio?