$r$ spectively. Their balance sheet on profit and losses in the proportion of three$-$fourth and one$-$fourth Cash Rs$\mathrm{.}1,000$; Sundry Debtors ${31}^{st}$ March $1995$ was as follows:

Creditors Rs$\mathrm{.}12,000$; Bank Overdraft Rs$\mathrm{.}15,$ Stock Rs$\mathrm{.}22\mathrm{.}000$; Plant and machinery Rs$\mathrm{.}4,000$; Sundry On $1^{st}$ April, $1995,$ they admitted C int Rs$.15,000$; A$\text{'}$s Capital Rs$.15,000$; B$\text{'}$s Capital Rs$.10,000$

$($a$)C$ to purchase one$-$third of the into partnership on the following terms: not to appear in books.

$($b$)$ Future profits and losses are to be shared by A$.$ B and C equally.

$($c$)$ Plant and Machinery is to be reduced by $10\%$ and Rs$.500$ is to be provided for estimated bad debls.

Stock is to be taken at a valuation of Rs$\mathrm{.}24,940.$

$($d$)$ By bringing in or withdrawing cash the capitals of A and $B$ are to be made proportionate to that of $C$ on their profit$-$sharing basis.

Set out entries relating to the above arrangement in the firm's journal, give the partner's Capital Account in tabular form and submit the opening Balance Sheet of the new firm.

$[$Ans$.$: Cash in hand Rs$\mathrm{.}3,960$;Capital $($Cr$.)$ A$,$ B and C Rs$.10,000$ each; Total of Opening Balance Sheet Rs$\mathrm{.}57,000.]$