Chander and Damini were partners in a firm sharing profits and losses equally. On 31st March, 2017 their Balance Sheet was as follows:
Balance Sheet of Chander and Damini as on 31.3.2017
|Liabilities||Amount (Rs.)||Assets||Amount (Rs.)|
|Sundry Creditors||1,04,000||Cash at Bank||30,000|
|Land and Building||3,10,000|
On 1.4.2017, they admitted Elina as a new partner for 1/3rd share in the profits on the following conditions:
(i) Elina will bring Rs. 3,00,000 as her capital and Rs. 50,000 as her share of goodwill premium, half of which will be withdrawn by Chander and Damini.
(ii) Debtors to the extent of Rs. 5,000 were unrecorded.
(iii) Furniture will be reduced by 10% and 5% provision for bad and doubtful debts will be created on bills receivables and debtors.
(iv) Value of land and building will be appreciated by 20%.
(v) There being a claim against the firm for damages, a liability to the extent of Rs. 8,000 will be created for the same.
Prepare Revaluation Account and Partners’ Capital Accounts.