Nanny, Marcus, and Bob have been in partnership for many years, sharing profits and losses in proportion to their fixed capital balances. Bob is planning to retire and write a book. He will leave the business on January 1, 2020. However, his absence will not be felt because Marcus and Nanny have invited George to join them in business on that date.

The statement of financial position as at December 31, 2019 is shown below

	$	$	$
Non-current assets
Land and Buildings	148,000	40,000	108,000
Plant and machinery	$85,000	30,000	55,000
Motor vehicles	75,000	60,000	15,000
Furniture and fixtures	14,000	4,500	9,500
			187,500
Current assets
Inventory		85,000
Receivables		70,000
Bank		28,000
			183,000
Total assets			370,500
Financed by
Capital:
Nanny			90,000
Marcus			60,000
Bob			50,000
			200,000
Current accounts
Nanny		50,000
Marcus		(8,000)
Bob		25,000	67,000
Long term Liability
Loan			45,000
Current Liability
Payables			58,500
			370,500

Additional information:

i. Assets were revalued as follows:

Land and buildings $200 000

Plant and machinery $ 80 000

Inventory $78 000

ii. Of the trade receivables, $5 000 was found to bad, and 2.5% of the remainder is judged to be doubtful.

iii. Goodwill is valued at $60 000. The new partnership has elected not to maintain a goodwill account on the books.

iv. Bob will receive inventory at an agreed value of $5 000 in part payment and the balance will be paid from the partnerships bank account. Bob will also assume responsibility for the current loan

v. George will bring into the partnership cash of $100 000 and fixtures valued at $15 000. He will also bring in the payables associated with his previous business, valued at $10 500.

vi. The new partnership of Nanny, Marcus and George will share profits 2:1:2.

Required

Prepare the following:

a. Revaluation account

b. Goodwill Account

c. Capital accounts of the old partnership (bring down the balances)

d. Capital accounts of the new partnership

e. Opening balance sheet of the new partnership at January 1

f. Why is revaluation an essential part of the process of accounting for changes in the partnership?

(round all amounts to the nearest dollar)