M/s A, B and C is a firm sharing profits and losses 2:2:1. Their Balance Sheet as on 31.3.2018 is as under:

They agreed to take in D from 1.4.2018 on the following terms:

1. D shall bring in ₹5,000 towards his capital;

2. Value of stock should be increased by ₹2,500;

3. Bad Debts amounting to ₹550 to be written off;

4. Furniture to be depreciated by 10%;

5. Value of land and building to be enhanced by 20%;

6. Value of Goodwill is ₹15,000;

7. New profit sharing ratio among A, B, C and D is 5:5:3:2;

8. Goodwill Account written-off after his admission. Outstanding liabilities include ₹1,000 due to X which has been paid by A. Entries were not made in the books.

Required:

Revaluation Account, Partners’ Capital Accounts and the new Balance Sheet.

Transcribed Image Text:

Sundry Creditors Outstanding Liabilities General Reserve Capital - A Capital B Capital - C Liabilities ₹ 12,850 Land and Building 1,500 Furniture 6,500 Stock 12,000 Sundry Debtors 12,000 Cash in hand 5,000 Cash at bank 49,850 Assets ₹ 25,000 6,500 11,750 5,500 140 960 49,850