A, B and C are partners sharing profit and losses in the proportion of 3 : 2 : 1. Following is the Balance Sheet as at 31.12.2017:C desires to retire from the firm on 1.1.2018. In terms of agreement

Building is to be revalued at ₹50,000. Debtors at ₹41,400 and Sundry Assets at ₹1,50,000. The amount payable to the retired partner is for the present to be treated as loan with 5% interest. 

On the same day, i.e., on 1.1.2018, D is admitted as a partner on payment of ₹32,000. Profit and loss are henceforth to be shared as 4:3:2 among A, B and D. No alteration is to be made in the book value of the assets other than cash brought in by D and Reserve. Draw up the final Balance Sheet as at 1.1.2018 on the above basis after admission of D.

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Liabilities Capital A/cs: (A-65,000; B-38,000; C 28,000) Reserve Creditors ₹ Building 1,31,000 Debtors 38,400 Sundry Assets 50,000 2,19,400 Assets ₹ 10,000 61,400 1,48,000 2,19,400