Revaluation account will be credited

Revaluation account will be credited

Revaluation account will be debited. Increase in bills payable is a loss for the firm. Being a nominal account, to record this loss, revaluation account will have to be debited.

The individual other than minors who cannot be admitted by them are
(i) Person of unsound mind
(ii) Person of disqualified by law

According to section 31 (1) of the Indian partnership Act 1932, a person can be admitted only with the consent of all the existing partners. A person who is admitted to the firm is known as an incoming or a new partner.

A person may join as a new partner in an existing partnership firm. This is called admission of a partner.

Old ratio of Praveena and Dhanya = 7:3 that is \(\frac{7}{10}:\frac{3}{10}\)
New ratio of Paveena, Dhanya and Malini = 5:2:3 that is, \(\frac{5}{10};\frac{2}{10};\frac{3}{10}\)
Share sacrificed = Old share - New share
Praveena \(=\frac { 7 }{ 10 } -\frac { 5 }{ 10 } =\frac { 7-5 }{ 10 } =\frac { 2 }{ 10 } \)
Dhanya \(=\frac { 3 }{ 10 } -\frac { 2 }{ 10 } =\frac { 3-2 }{ 10 } =\frac { 1 }{ 10 } \)
Sacrificing ratio ofPraveena and Dhanya is \(\frac { 2 }{ 10 } :\frac { 1 }{ 10 } \) that is 2:1

Adjustment for goodwill
As the sacrifice made by the existing partners is not mentioned, it is assumed that they sacrifice in their old profit sharing ratio 3 : 2.

Journal Entry

Date	Particulars	L.F	Debit Rs.	Credit Rs.
	Bank A/c		10,000
	To Aaparna's capital A/c (3/5)			6,000
	To Priya's Capital A/c (2/5)			4,000
	(Cash brought for goodwill credited to Aparna's and Priya in sacrificing ratio)
	Apama's capital A/c       Dr		6,000
	Priya's Capital A/c          Dr		4,000
	To Bank A/c			10,000
	(Amount withdrawn by the partners)

Computation of sacrificing ratio and new profit sharing ratio
Kailash's share = \(\frac {1}{4}\)
Old ratio = 1:1 that is \(\frac { 1 }{ 2 } :\frac { 1 }{ 2 } \)
Proportion of share sacrificed 7 : 3 that is  \(\frac { 7 }{ 10 } :\frac { 3 }{ 10 } \)
Share scarified = New partner's share x Proportion of share sacrificed
Karthik \(=\frac { 1 }{ 4 } :\frac { 7 }{ 10 } =\frac { 7 }{ 10 } \)
Kannan \(=\frac { 1 }{ 4 } \times \frac { 3 }{ 10 } =\frac { 3 }{ 40 } \)
Sacrificing ratio of Karthik and Kannan is \(\frac { 7 }{ 10 } \) and \(\frac { 3 }{ 10 } \) that is 7:3
New share of old partner = Old share - Share sacrificed
Karthik \(=\frac { 1 }{ 2 } -\frac { 7 }{ 40 } =\frac { 20-7 }{ 40 } =\frac { 13 }{ 40 } \)
Kannan \(=\frac { 1 }{ 2 } -\frac { 3 }{ 40 } =\frac { 20-3 }{ 40 } =\frac { 17 }{ 40 } \)
Share of new partner Kailash =\(\frac{1}{4}\)
In order to equate the denominator, multiply and divide Kailash's share by 10 \(=\frac { 1 }{ 4 } \times \frac { 10 }{ 10 } =\frac { 10 }{ 40 } \)
Thus, the New profit sharing ratio \(=\frac { 13 }{ 40 } :\frac { 17 }{ 40 } :\frac { 10 }{ 40 } \) =13:17:10

Computation of sacrificing ratio and new profit sharing ratio
Share sacrificed \(=\frac{1}{14}:\frac{1}{14}\)
Sacrificing ratio of Vimala and Kamala is 1 : 1
Old ratio is 4: 3 that is \(\frac { 4 }{ 7 } :\frac { 3 }{ 7 } \)
New share of old partner = Old share - Share sacrificed
Vimala \(=\frac { 4 }{ 7 } -\frac { 1 }{ 14 } =\frac { 8-1 }{ 14 } =\frac { 7 }{ 14 } \)
Kamala \(=\frac { 3 }{ 7 } -\frac { 1 }{ 14 } =\frac { 6-1 }{ 14 } =\frac { 5 }{ 14 } \)
Share of new partner:
Vinitha = Sum of shares sacrificed by old partners
\(=\frac { 1 }{ 14 } +\frac { 1 }{ 14 } =\frac { 2 }{ 14 } \)
New profit sharing ratio of Vimala, Kamala and Vinitha is \(\frac { 7 }{ 14 } :\frac { 5 }{ 14 } :\frac { 2 }{ 14 } \) or 7:5:2

Computation of sacrificing ratio and new profit sharing ratio
Share sacrificed by old partners 
Ananth = \(\frac{1}{5}\)
Suman = 0
Sacrificing ratio = 1 : 0
Old profit of Ananth and Suman is 3 : 2 that is \(\frac { 3 }{ 5 } :\frac { 2 }{ 5 } \)
New share of old partner = Old share - Share sacrificed
Ananth \(=\frac { 3 }{ 5 } -\frac { 1 }{ 5 } =\frac { 3-1 }{ 5 } =\frac { 2 }{ 5 } \)
Suman = \(\frac { 2 }{ 5 } \)
Share of new partner Saran = \(\frac { 1 }{ 5 } \)
New profit sharing ratio of Ananth, Suman and saran is \(\frac { 2 }{ 5 } :\frac { 2 }{ 5 } :\frac { 1 }{ 5 } \) that is 2:2:1

As the sacrifice made by the existing partners is not mentioned, it is assumed that they sacrifice
in their old profit sharing ratio of 5:1. Therefore, sacrificing ratio is 5:1.
Tharun’s share of goodwill = 27,000 \(\times\) \(\frac { 2 }{ 9 } \) = Rs. 6,000

Journal entry

Date	Particulars		L.F.	Debit Rs.	Credit Rs.
	Tharun’s capital A/c	Dr.		6,000
	To Ashok’s capital A/c (5/6)				5,000
	To Mumtaj’s capital A/c (1/6) (Tharun’s share of goodwill credited to the old partners’ capital account in the sacrificing ratio)				1,000

Computation of sacrificing ratio and new profit sharing ratio
Old ratio of Anil, Sunil and Hari = 4 : 3 : 3 or \(\frac { 4 }{ 10 } :\frac { 3 }{ 10 } :\frac { 3 }{ 10 } \)
Raja’s share of profit = 20% or 20/100 or 1/5
Let the total share be 1
Remaining share =  \(1-\frac { 1 }{ 5 } =\frac { 5-1 }{ 5 } \)
= \(\frac { 4 }{ 5 } \)
New share of old partners = Remaining share × Old share
Anil = \(\frac { 4 }{ 5 } \times \frac { 1 }{ 10 } =\frac { 16 }{ 50 } \)
Sunil = \(\frac { 4 }{ 5 } \times \frac { 3 }{ 10 } =\frac { 12 }{ 50 } \)
Hari =  \(\frac { 4 }{ 5 } \times \frac { 3 }{ 10 } =\frac { 12 }{ 50 } \)
Share of new partner Raja =  \(\frac { 1 }{ 5 } \)
In order to equalise the denominator, multiply and divide Raja’s share by 10
Raja’s share = \(\frac { 1 }{ 5 } \times \frac { 10 }{ 10 } =\frac { 10 }{ 50 } \)
New profit sharing ratio of Anil, Sunil, Hari and Raja = \(\frac { 16 }{ 50 } :\frac { 12 }{ 50 } :\frac { 12 }{ 50 } :\frac { 12 }{ 50 } \) that is, 8 : 6 : 6 : 5.

Computation of sacrificing ratio and new profit sharing ratio
Old share = 3:2 that is, Prasanth \(\frac { 3 }{ 5 } \) and Nisha \(\frac { 2 }{ 5 } \)
Share sacrificed = Old share × Proportion of share sacrificed
Prasanth = \(\frac { 3 }{ 5 } \times \frac { 2 }{ 5 } =\frac { 6 }{ 25 } \)
Nisha = \(\frac { 2 }{ 5 } \times \frac { 2 }{ 5 } =\frac { 4 }{ 25 } \)
Sacrificing ratio of Prasanth and Nisha is \(\frac { 6 }{ 25 } \) and \(\frac { 4 }{ 25 } \), that is, 3:2
New share = Old share - Share sacrificed
Prasanth = \(\frac { 3 }{ 5 } -\frac { 6 }{ 25 } =\frac { 15-6 }{ 25 } =\frac { 9 }{ 25 } \)
Nisha = \(\frac { 2 }{ 5 } -\frac { 4 }{ 25 } =\frac { 10-4 }{ 25 } =\frac { 6 }{ 25 } \)
Share of new partner = Sum of shares sacrificed by Prasanth and Nisha
Ramya = \(\frac { 6 }{ 25 } +\frac { 4 }{ 25 } =\frac { 6+4 }{ 25 } =\frac { 10 }{ 25 } \)
New profit sharing ratio of Prasanth, Nisha and Ramya = \(\frac { 9 }{ 25 } :\frac { 6 }{ 25 } :\frac { 10 }{ 25 } \) that is, 9:6:10

Computation of sacrificing ratio and new profit sharing ratio
Old share = 3:2 that is, Suresh \(\frac { 3 }{ 5 } \) and Dinesh \(\frac{2}{5}\) \(Suresh\)
Share sacrificed = Old share x Proportion of share sacrificed
Suresh = \(\frac { 3 }{ 5 } \times \frac { 1 }{ 5 } =\frac { 3 }{ 25 } \)
Dinesh = \(\frac { 2 }{ 5 } \times \frac { 2 }{ 5 } =\frac { 4 }{ 25 } \)
Sacrificing ratio of Suresh and Dinesh is \(\frac { 3 }{ 25 } \) and \(\frac { 4 }{ 25 } \) that is, 3:4
New share = Old share - Share sacrificed
Suresh = \(\frac { 3 }{ 5 } -\frac { 3 }{ 25 } =\frac { 15-3 }{ 25 } =\frac { 12 }{ 25 } \)
Dinesh = \(\frac { 2 }{ 5 } -\frac { 4 }{ 25 } =\frac { 10-4 }{ 25 } =\frac { 6 }{ 25 } \)
Share of new partner = Sum of shares sacrificed by Suresh and Dinesh
Ramesh = \(\frac { 3 }{ 25 } +\frac { 4 }{ 25 } =\frac { 3+4 }{ 25 } =\frac { 7 }{ 25 } \)
New profit sharing ratio of Suresh, Dinesh and Ramesh = \(\frac { 12 }{ 25 } :\frac { 6 }{ 25 } :\frac { 7 }{ 25 } \)that is, 12:6:7.