point). 163 Illustration 7 Messers Dalal, Banerji and Mallick is a firm sharing profits and losses in the ratio 2:2:1. Their Balance Sheet as on 31st March, 2006 in as below: Liabilities Rs. Assets Rs. Sundry Creditors 12,850 Land and Buildings 25,000 Outstanding Liabilities 1,500 Furniture 6,500 General Reserve 6,500 Stock of goods 11,750 Capital Account: Sundry Debtors 5,500 Mr. Dalal 12,000 Cash in hand 140 Mr. Banerji 12,000 Cash at Bank 960 Mr. Malick 5,000 29,000 49,850 49.850 The partners have agreed to take Mr. Mistri as a parner with effect from 1st April, 2006 on the following terms: (1) Mr. Mistri shall bring 5,000 towards his capital. (2) The value of stock should be increased by Rs. 2,500 and Furniture should be depreciated by 10%. (3) Reserve for bad and doubtful debts should be provided at 10% of the debtors. (4) The value of land and buildings should be enhanced by 20% and the value of the goodwill be fixed at Rs. 15,000. (5) The value of the goodwill be fixed at Rs. 15,000. (6) General Reserve will be transferred to the partner's Capital Accounts. (7) The new profit sharing ratio shall be : Mr. Dalal 5/15, Mr. Banerji 5/15,Mr. Mallick 3/15and Mr. Mistri 2/15. (8) The goodwill account shall be written back to the partner's account in accordance with the new profit sharing proportion. The outstanding liabilities include Rs. 1,000 due to Mr. Sen which has been paid by Mr. Dalal. Necessary entries were not made in the books Prepare (i) Revaluation Account, and (ii) The Capital Accounts of the partners, and (iii) the Balance Sheet of the firm as newly constituted (Journal entries are not required)