Ashish and Vishesh were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2022 was as under:
Balance Sheet of Ashish and Vishesh as at 31st March, 2022
|Creditors||30,000||Cash at Bank||50,000|
|Outstanding Electricity Bill||20,000||Debtors 80,000|
|Capitals:||Less: Provision for
Bad Debts 2,000
|Profit and Loss A/c||10,000|
On 1st April, 2022, Manya was admitted into the firm with 1/4th share in the profits on the following terms:
- Manya will bring ₹1,00,000 as her capital and ₹50,000 as her share of goodwill premium in cash.
- Outstanding electricity bill will be paid off.
- Stock was found over valued by 12,000.
Pass the necessary journal entries in the books of the firm on Manya’s admission.