On 31st March, 2019 the Balance Sheet of Madan and Mohan who share profits and losses in the ratio of 3 : 2 was as follows :

Balance Sheet of Madan and Mohan as at 31st March, 2019

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)
Creditors             28,000Cash at Bank             10,000
General Reserve             10,000Debtors                                                            65,000   
Employees Provident Fund             22,000Less: Provision for Doubtful Debts             (5000)             60,000
Capitals: Stock             33,000
     Madan                              60,000             Patents             57,000
    Mohan                              40 000                 1,00,000  
Total          1,60,000Total          1,60,000

They decided to admit Gopal on 1st April, 2019 for 1/5th share which Gopal acquired wholly from Mohan on the following terms:

(i) Gopal shall bring Rs.  10,000 as his share of premium for Goodwill.

(ii) A debtor whose dues of Rs.  3,000 were written off as bad debt paid Rs.  2,000 in full settlement.

(iii) A claim of Rs.  5,000 on account of workmen’s compensation was to be provided for.

(iv) Patents were undervalued by Rs.  2,000. Stock in the books was valued 10% more than its market value.

(v) Gopal was to bring in capital equal to 20% of the combined capitals of Madan and Mohan after all adjustments.

Prepare Revaluation Account, Capital Accounts of the Partners and the Balance Sheet of the new firm.

Marks-8, CBSE:2018-19/Comp/Q-16*