| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital A/c : | Building | 50,000 | |
| A – 50,000 | Plant and Machinery | 30,000 | |
| B – 40,000 | 90,000 | Stock | 18,000 |
| Reserve | 10,000 | Debtors | 22,000 |
| Creditors | 20,000 | Bank | 5,000 |
| Outstanding Expenses | 5,000 | ||
| 1,25,000 | 1,25,000 |
Following are the required adjustments on admission of C:
(a) C brings in Rs. 25,000 towards his capital.
(b) C also brings in Rs. 5,000 for 1/5th share of goodwill.
(c) Stock is undervalued by 10%.
(d) Creditors include a liability of Rs. 4,000, which has been decided by the court at Rs. 3,200.
(e) In regard to the Debtors, the following Debts proved Bad or Doubtful−
Rs. 2,000 due from X−bad to the full extent;
Rs. 4,000 due from Y−insolvent, estate expected to pay only 50%.
You are required to prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.
SOLUTION
