| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Bills Payable | 10,000 | Cash in Hand | 10,000 |
| Creditors | 58,000 | Cash at Bank | 40,000 |
| Outstanding Expenses | 2,000 | Sundry Debtors | 60,000 |
| Capital A/c : | Stock | 40,000 | |
| A – 1,80,000 | Plant | 1,00,000 | |
| B – 1,50,000 | 3,30,000 | Building | 1,50,000 |
| 4,00,000 | 4,00,000 |
C is admitted as a partner on 1st April, 2019 on the following terms:
(a) C will bring Rs. 1,00,000 as his capital and Rs. 60,000 as his share of goodwill for 1/4th share in the profits.
(b) Plant is to be appreciated to Rs. 1,20,000 and the value of building is to be appreciated by 10%.
(c) Stock is found overvalued by Rs. 4,000.
(d) A provision for doubtful debts is to be created at 5% of sundry debtors.
(e) Creditors were unrecorded to the extent of Rs. 1,000.
Pass the necessary Journal entries, prepare the Revaluation Account and Partners’ Capital Accounts, and show the Balance Sheet after the admission of C.
Solution
