S, T, U and V were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1st April, 2016, their Balance Sheet was as follows:
Balance Sheet of S, T, U and V as on 1-4-2016
|Liabilities||Amount (Rs.)||Assets||Amount (Rs.)|
|Capitals :||Fixed Assets||4,40,000|
|S 2,00,000||Current Assets||2,00,000|
|Workmen Compensation Reserve||60,000|
From the above date partners decided to share the future profits in 3 : 1 : 2 : 4 ratio.
For this purpose the goodwill of the firm was valued at Rs. 90,000. The partners also agreed for the following:
(i) The claim for workmen compensation has been estimated at Rs. 70,000.
(ii) To adjust the capitals of the partners according to new profit sharing ratio by opening partners current accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm.