BALANCE SHEET OF RAGHU AND RISHU
as at 31st March, 2009
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Creditors | 86,000 | Cash in Hand | 77,000 |
| Employees’ Provident Fund | 10,000 | Debtors – 42,000 | |
| Investments Fluctuation Reserve | 4,000 | Less: Provision for Doubtful Debts – (7,000) | 35,000 |
| Capital A/c : | Investments | 21,000 | |
| Raghu – 1,19,000 | Buildings | 98,000 | |
| Rishu – 1,12,000 | 2,31,000 | Plant and Machinery | 1,00,000 |
| 3,31,000 | 3,31,000 |
Rishabh was admitted on that date for 1/4th share of profit on the following terms:
(a) Rishabh will bring Rs. 50,000 as his share of capital.
(b) Goodwill of the firm is valued at Rs. 42,000 and Rishabh will bring his share of goodwill in cash.
(c) Buildings were appreciated by 20%.
(d) All Debtors were good.
(e) There was a liability of Rs. 10,800 included in Creditors which was not likely to arise.
(f) New profit-sharing ratio will be 2 : 1 : 1.
(g) Capital of Raghu and Rishu will be adjusted on the basis of Rishabh’s share of capital and any excess or deficiency will be made by withdrawing or bringing in cash by the concerned partners as the case may be.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.
SOLUTION
