Badal and Bijli were partners in a firm sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019 was as follows:
Balance Sheet of Badal and Bijli as at 31st March, 2019
|Badal’s Current A/c||12,000||Debtors||20,000|
Investment Fluctuation Reserve
|Bills Payable||8,000||Bijli’s Current A/c||2,000|
Raina was admitted on the above date as a new partner for 1/6th share in the profits of the firm. The terms of agreement were as follows:
(i) Raina will bring Rs. 40,000 as her capital and capitals of Badal and Bijli will be adjusted on the basis of Raina’s capital by opening current accounts.
(ii) Raina will bring her share of goodwill premium for Rs. 12,000 in cash.
(iii) The building was overvalued by Rs. 15,000 and stock by Rs. 3,000.
(iv) A provision of 10% was to be created on debtors for bad debts.
Prepare the Revaluation Account and Current and Capital Accounts of Badal, Bijli and Raina.