Rajinder and Vijay were partners in a firm sharing profits in the ratio 3:2. On 31st March 2023 their balance sheet was as follows:

Liabilities Amount
Assets Amount
Capital Accounts: Fixed Assets (Tangible) 3,60,000
Rajinder                     3,00,000 Goodwill 50,000
Vijay                           1,50,000 4,50,000 Investments 40,000
Current Accounts: Stock 74,000
Rajinder                      50,000 Debtors                  1,00,000
Vijay                            10,000 60,000 Less: Provision for
Doubtful Debts           4,000

96,000
Creditors 75,000 Bank 25,000
General Reserve 60,000
6,45,000 6,45,000

With an aim to expand business it is decided to admit Ranvijay as a partner on 1st April 2023 on the following terms:

a) Provision for doubtful debts is to be increased to 6% of debtors.
b) An outstanding bill for repairs ₹50,000 to be accounted in the books
c) An unaccounted interest accrued of ₹7,500 be provided for.
d) Investment were sold at book value.
e) Half of stock was taken by Rajinder at ₹42,000 and remaining stock was also to be revalued at the same rate.
f) New profit-sharing ratio of partners will be 5:3:2.
g) Ranvijay will bring ₹1,00,000 as capital and his share of goodwill which was valued at twice the average profit of the last three years ended 31st March 2023, 2022 and 2021 were ₹1,50,000, ₹1,30,000 and ₹1,70,000 respectively.

Pass necessary journal entries

Marks-6, CBSE:2023-24/Sample/Q-24*

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