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:
|Capital Accounts:||Fixed Assets (Tangible)||3,60,000|
|Rajinder 50,000||Debtors 1,00,000|
|Vijay 10,000||60,000||Less: Provision for
Doubtful Debts 4,000
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