Balance Sheet of R and S as at 31st March, 2020
|Liabilities||Amount ₹||Assets||Amount ₹|
|Capitals:||Cash at Bank||10,000|
|R 60,000||Debtors 65,000|
|S 40,000||1,00,000||Less: Provision for
Doubtful Debts 5,000
|Bills payable||20,000||Land and Building||20,000|
M was admitted on the above date as a new partner for 1/5th share in the profits of the firm. The terms of agreement were as follows:
- M will bring ₹80,000 as his capital and ₹60,000 as his share of goodwill premium.
- Machinery was revalued at ₹45,000
- Stock will be reduced by l0% and Land and Building will be appreciated by 40%.
Prepare Revaluation Account and Partners’ Capital Accounts.