| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Creditors | 64,000 | Cash | 18,000 |
| Bills Payable | 22,000 | Bills Receivable | 14,000 |
| General Reserve | 14,000 | Stock | 44,000 |
| Capital A/c : | Debtors | 42,000 | |
| A – 36,000 | Machinery | 94,000 | |
| B – 44,000 | Goodwill | 20,000 | |
| C – 52,000 | 1,32,000 | ||
| 2,32,000 | 2,32,000 |
They admit D into partnership on the following terms:
(a) Machinery is to be depreciated by 15%.
(b) Stock is to be revalued at Rs. 48,000.
(c) It is found that the Creditors included a sum of Rs. 12,000 which was not to be paid.
(d) Outstanding Rent is Rs. 1,900.
(e) D is to bring in Rs. 6,000 as goodwill and sufficient capital for 2/5th share.
(f) The partners decided to use 10% of the profits every year in providing drinking water in schools, where required.
Prepare Revaluation Account, Partners’ Capital Accounts, Cash Account and Balance Sheet of the new firm.
SOLUTION
