A and B were partners sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2018, was as follows:

Balance Sheet of A and B as at 31st March, 2018

Liabilities Amount (Rs.) Assets Amount (Rs.) 
Capital: Cash                        8,000
    A         1,04,000 Sundry Debtors                                             37,600 
    B            52,000                  1,56,000Less: Provision for Doubtful Debts           (1,600)                     36,000
Creditors                  1,54,000Stock                     60,000
Employees Provident Fund                     16,000Prepaid Insurance                        6,000
Workmen Compensation Fund                     10,000Plant and Machinery                     76,000
Contingency Reserve                     10,000Building                  1,40,000
  Furniture                     20,000
Total                  3,46,000Total                  3,46,000

C was admitted as a new partner and brought Rs.  64,000 as capital and Rs.  15,000 for his share of goodwill premium. The new profit sharing ratio was 5 : 3 : 2.

On C’s admission the following was agreed upon:

(i) Stock was to be depreciated by 5%.

(ii) Provision for doubtful debts was to be made at Rs.  2,000.

(iii) Furniture was to be depreciated by 10%.

(iv) Building was valued at Rs.  1,60,000.

(v) Capitals of A and B were to be adjusted on the basis of C’s capital by bringing or paying of cash as the case may be.

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

Marks-8, CBSE:2018-19/Main/04/Q-17*

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