12th Class Accountancy Admission of a Partner Question Bank MCQs - Reconstitution Of a Partnership Firm : Admission of a Partner

X and Y are partners sharing profits equally. They admit Z for 1/3rd share in profits. Following information is available at the time of admission of Z.

Liabilities Amount Assets Amount

Creditors 50,000 Debtors 45,000

Less: Provision for Doubtful debts 5,000 40,000

Additional information: There were Bad Debts of Rs. 10,000 written off this year. Provision for doubtful debts is to be maintained @5% on Debtors. Creditors of Rs. 30,000 were settled in 21,250.

Revaluation Gain/Loss will be:

A) Gain Rs. 500

B) Loss 500

C) Gain Rs. 2,000

D) 3,250

Correct Answer: C

Solution :

Gain Rs. 2,000