Quick and Slow are partners in a firm sharing profits and losses in the ratio of 3 : 2. The Balance Sheet of the firm as on 31st March, 2018 was as under:Smooth was admitted as a new partner with effect from 1st April, 2018 and it was agreed that he would bring some private furniture worth  ₹10,000 and private stock costing ₹8,000 and in addition contribute ₹50,000 cash towards capital. 

He would also bring proportionate share of goodwill which is to be valued at two years’ purchase of the average profits of the last three years. The profits of the last three years were: 2017-10 ₹52,000; 2016-09 ₹32,000; 2015-08 ₹28,000. However, on a checking of the past records, it was noticed that on 1.4.2016 a new furniture costing ₹8,000 was purchased but wrongly debited to revenue, and in 2017-10 a purchase invoice for ₹4,000 dated 25.3.2018 has been omitted in the books. The firm charges depreciation on Furniture @ 10% p.a. on original cost. Your calculation of goodwill is to be made on the basis of correct profits. On revaluation, value of stock is to be reduced by 5% and motor car is worth ₹85,000. Smooth duly paid the required amount for goodwill and cash towards capital.

It was decided that the future profits of the firm would be shared as Quick : 50%, Slow : 30% and Smooth : 20%. Assuming the above-mentioned arrangements were duly carried out, show the Revaluation Account, Capital Accounts of the partners and the Balance Sheet of the firm after Smooth’s admission.

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Capital Accounts: General Reserve Sundry Creditors Liabilities Quick Slow 1,20,000 77,000 ₹ Furniture and Fixtures Office Equipments 1,97,000 Motor Car 30,000 Stock 96,000 Sundry Debtors Cash at Bank 3,23,000 Assets ₹ 60,000 30,000 75,000 50,000 90,000 18,000 3,23,000