Partners G, H and I share profits in the ratio 4:3:3. The firm’s net assets before admission of a new partner J are Rs. 6,00,000. After J is admitted, the assets are revalued: the building increases by Rs. 40,000 and the stock decreases by Rs. 10,000. The goodwill to be transferred to J is Rs. 36,000 in the partners’ old profit‑sharing ratio. Compute the total amount that will be credited to the firm’s books as a result of J’s admission (i.e., the sum of the goodwill transferred and the revaluation reserve).

Step-by-step solution

1. Step 1: Calculate the net change in assets: +Rs. 40,000 (building) – Rs. 10,000 (stock) = +Rs. 30,000.
2. Step 2: The revaluation reserve is the net increase, i.e., Rs. 30,000.
3. Step 3: Add the goodwill transferred to the new partner: Rs. 36,000.
4. Step 4: Sum the revaluation reserve and goodwill: Rs. 30,000 + Rs. 36,000 = Rs. 66,000.
5. Step 5: Conclude that Rs. 66,000 will be credited to the firm’s books.

Concept tested: Admission of new partner and revaluation reserve

Published 4 October 2026 · How this solution was prepared and checked