On 31st March 2017, the Balance Sheet of Abhir and Divya, who were sharing profits in the ratio of 3 : 1 was as follows :
Balance Sheet of Abhir and Divya as on 31st March 2017
Cash at Bank
Employees’ Provident Fund
Investment Fluctuation Fund
Less:- Provision for bad debts (50,000)
Investments (market value Rs. 4,40,000)
Abhir : 6,00,000
Divya : 4,00,000
They decided to admit Vibhor on April 1, 2017 for 1/5th share.
(a) Vibhor shall bring Rs. 80,000 as his share of goodwill premium.
(b) Stock was overvalued by Rs. 20,000.
(c) A debtors whose dues of Rs. 5,000 were written off as bad debts, paid Rs. 4,000 in full settlement.
(d) Two months salary @ Rs. 6,000 per month was outstanding.
(e) Vibhor was to bring in Capital to the extent of 1/5th of the total capital of the new firm.
Prepare Revaluation A/c, Partners’ Capital A/c and the Balance Sheet of the reconstituted firm.