Raman and Rohit were partners in a firm sharing profits and losses in the ratio of 2 : 1. On 31st March, 2018, their Balance Sheet was as follows :
Balance Sheet of Raman and Rohit as at 31st March, 2018
Plant and Machinery
Furniture and Fixtures
Workmen Compensation Fund
Less: provision for doubtful debts (7,000)
On the above date, Saloni was admitted in the partnership firm. Raman surrendered 2/5th of his share and Rohit surrendered 1/5th of his share in favour of Saloni. It was agreed that:
(i) Plant and machinery will be reduced by Rs. 35,000 and furniture and fixtures will be reduced to Rs. 58,500.
(ii) Provision for bad and doubtful debts will be increased by Rs. 3,000.
(iii) A claim for Rs. 16,000 for workmen’s compensation was admitted.
(iv) A liability of Rs. 2,500 included in creditors is not likely to arise.
(v) Saloni will bring Rs. 42,000 as her share of goodwill premium and proportionate capital.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the reconstituted firm.