E,F and G have been in business for ten years.They have always shared profits equally.No goodwill account has existed in the books. On 31 December 2006 they agree that G will take only one-fifth share of profits as from 1 January 2007,because he will be devoting less of his time to the business in the future. E and F will each take two-fifths of the profits.The summarized balance sheet of the business on 31 December 2006 appears as follows:

Balance sheet as at 31 december 2006

Net assets 70 000

Capital: E 30 000

F 18000

G 22000

70000

The partners agree that the goodwill should be valued at 30 000

Show the balance sheet and capital accounts on 1 January 2007 after goodwill has been taken into account if:

(a) Goodwill account was opened

(b) Goodwill account was not opened