Particulars 1.10.2017 1.4.2018 1.7.2018 to to to 31.3.2018 30.6.2018 30.9.2018 Profit of 6,30,000 shared in the ratio - 6:2:2 3,78,000 1,26,000 1,26,000 Less : Bad Debts 30,000 Adjusted Profit for Distribution 3,48,000 1,26,000 1,26,000 Illustration 49 Ram, Rahim and Robert are partners, sharing profits and losses in the ratio of 5: 3:2. It was decided that Robert would retire on 31.3.2018 and in his place Richard would be admitted as a partner with new profit sharing ratio between Ram, Rahim and Richard at 3:2:1 Balance Sheet of Ram Rahim and Robert as at 31.3.2018 Liabilities Assets Capital Accounts: Cash in Hand 20,000 Ram 1,00,000 Cash at Bank 1,00,000 Rahim 1,50,000 Sundry Debtors 5,00,000 Robert 2,00,000 Stock in Trade 2,00,000 General Reserve 2,00,000 plant and Machinery 3,00,000 Sundry Creditors 8,00,000 Land and Building 5,30,000 Loan from Richard 2,00,000 16,50,000 16,50,000 Retirement of Robert and admission of Richard is on the following terms: (a) Plant and Machinery to be depreciated by 30,000. 968 (b) Land and Building to be valued at 26,00,000. (c) Stock to be valued at 95% of book value. (d) Provision for doubtful debts @ 10% to be provided on debtors. (e) General Reserve to be apportioned amongst Ram Rahim and Robert. The firm's goodwill to be valued at 2 years purchase of the average profits of the last 3 years. The relevant figures are : Year ended 31.3.2015 - Profit 50,000; Year ended 31.3.2016 --Profit 60,000 Year ended 31.3.2017 - Profit 55,000. (g) Out of the amount due to Robert 2,00,000 would be retained as loan by the firm and the balance will be settled immediately. (h) Richard's capital should be equal to 50% of the combined capital of Ram and Rahim. Prepare : (1) Capital Accounts of the Partners; and (ii) Balance Sheet of the reconstituted firm