BALANCE SHEET OF ABHIR AND DIVYA as on 31st March, 2017
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Creditors | 2,20,000 | Cash at Bank | 1,40,000 |
| Employees’ Provident Fund | 1,00,000 | Debtors – 6,50,000 | |
| Investment Fluctuation Fund | 1,00,000 | Less: Provision for Bad Debts – (50,000) | 6.00,000 |
| General Reserve | 1,20,000 | Stock | 3,00,000 |
| Capitals: | Investments (Market value Rs. 4,40,000) | 5,00,000 | |
| Abhir – 6,00,000 | |||
| Divya – 4,00,000 | 10,00,000 | ||
| 15,40,000 | 15,40,000 |
They decided to admit Vibhor on 1st April, 2017 for 1/5th share.
(a) Vibhor shall bring Rs. 80,000 as his share of goodwill premium.
(b) Stock was overvalued by Rs. 20,000.
(c) A debtor whose dues of Rs. 5,000 were written off as bad debts, paid Rs. 4,000 in full settlement.
(d) Two months’ salary @ Rs. 6,000 per month was outstanding
SOLUTION
