Problem 4: Given below is the Balance sheet of Ahmed and Biswas who are carrying on partnership business sharing profits and losses in the ratio of 2:1.

Liabilities	Amount (OMR)	Assets	Amount (OMR)
Sundry creditors Bills payable Partner's capital Ahmed 180,000 Biswas 150,000 Outstanding expenses Total	58,000 10,000 330,000 2,000 400,000	Cash at Bank Stock Sundry Debtors -60,000 Less provision - (0) Plant & Machinery Building Total	50,000 40,000 60,000 100,000 150,000 400,000

Rehan is admitted as a partner and the following adjustments need to be made:

Rehan is to bring in OMR 100,000 as her capital and OMR 60,000 as her share of goodwill for 1/4th share in profits

Plant is to be appreciated to OMR 120,000 and the value of buildings is to be appreciated by 10%

Stock is found overvalued by OMR 4,000

A Provision for doubtful debts is to be created at 5% of debtors

Creditors were unrecorded to the extent of OMR 1,000

Prepare Revaluation Account, Partners Capital Account and Balance Sheet of the reconstituted firm on Rehan AND calculate the new profit sharing ratio and the sacrificing ratio