Amit and Anil are partners sharing profits and losses in the ratio of 2 :1. Their Balance Sheet as on 31st March, 2023 was as follows:
Ankit is admitted as a partner on the date of the Balance Sheet on the following terms:
| Liabilities | ₹ | Assets | ₹ |
| Sundry Creditors General Reserve Capital A/cs: Amit Anil |
58,000 12,000 1,80,000 1,50,000 |
Cash in Hand Cash at Bank Sundry Debtors Stock Machinery Building |
5,000 45,000 60,000 40,000 1,00,000 1,50,000 |
| 4,00,000 | 4,00,000 |
- Ankit will being in ₹ 1,00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4th share in profits.
- Machinery is to be appreciated to ₹ 1,20,000 and the value of building is to be appreciated by 10%.
- Stock is found overvalued by ₹ 4,000.
- General Reserve will continue to appear in the books of the reconstituted firm at its original value.
- A Provision for Doubtful Debts is to be created at 5% of debtors.
- Creditors were unrecorded to the extent of ₹ 1,000.
Solution :
