On 31st March, 2019, the Balance Sheet of A and B, who were sharing profits in the ratio of 3 : 2 was as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Creditors Investment Fluctuation Fund General Reserve Capital A/cs: A B |
30,000 12,000 25,000 1,60,000 1,40,000 |
Cash at Bank Debtors Less: Provision for Bad debts Stock Investments Furniture |
85,000 5,000 |
20,00080,000 1,30,000 60,000 77,000 |
| 3,67,000 | 3,67,000 |
On 1st April, 2019, they decided to admit C as a new partner for 1/5th share in the profits on the following terms:
- C brought ₹ 1,00,000 as his capital and ₹ 50,000 as his share of premium for goodwill.
- Outstanding salaries of ₹ 2,000 be provided for.
- The market value of investments was ₹ 50,000.
- A debtor whose due of ₹ 18,000 were written off as bad debts paid ₹ 12,000 in full settlement
Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the new firm
Solution :
