T and N were partners in a firm. On 31st March, 2018 they decided to admit M as a new partner. On 31st March, 2018 the Balance Sheet of T and N stood as follows:
Balance Sheet of T and N as at 31.3.2018
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Creditors | 18,000 | Cash at Bank | 1,000 |
| General Reserve | 2,000 | Debtors | 40,000 |
| Capital | Stock | 6,000 | |
| T 30,000 | Furniture | 3,000 | |
| N 15,000 | 45,000 | Freehold Property | 15,000 |
| Total | 65,000 | Total | 65,000 |
They agreed to admit M as a new partner subject to the following terms and conditions:
(i) M will bring in Rs. 20,000 of which Rs. 4,500 will be treated as his share of goodwill premium to be retained in the business.
(ii) M will be entitled to ¼ th share of the profits in the firm.
(iii) A provision for doubtful debts was to be created at 5% on the debtors.
(iv) Furniture was to be depreciated by 5%.
(v) Stock was to be revalued at Rs. 5,000.
Prepare Revaluation Account, Partners’ Capital Accounts and Opening Balance Sheet of the new firm.
Marks-6, CBSE:2018-19/Main/05/Q-13
Answer :