| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Capital A/c : | Y’s Current Account | 7,000 | |
| X – 1,75,000 | Land and Building | 1,75,000 | |
| Y – 1,50,000 | Plant and Machinery | 67,500 | |
| Z – 1,25,000 | 4,50,000 | Furniture | 80,000 |
| Current A/c : | Investments | 36,500 | |
| X – 4,000 | Bills Receivable | 17,000 | |
| Z – 6,000 | 10,000 | Sundry Debtors | 43,500 |
| General Reserve | 15,000 | Stock | 1,37,000 |
| Profit and Loss A/c | 7,000 | Bank | 43,500 |
| Creditors | 80,000 | ||
| Bills Payable | 45,000 | ||
| 6,07,000 | 6,07,000 |
On the above date, W is admitted as a partner on the following terms:
(a) W will bring Rs. 50,000 as his capital and get 1/6th share in the profits.
(b) He will bring necessary amount for his share of goodwill premium. Goodwill of the firm is valued at Rs. 90,000.
(c) New profit-sharing ratio will be 2 : 2 : 1 : 1.
(d) A liability of Rs. 7,004 will be created against bills receivable discounted earlier but now dishonoured.
(e) The value of stock, furniture and investments is reduced by 20%, whereas the value of Land and Building and Plant and Machinery will be appreciated by 20% and 10% respectively.
(f) Capital Accounts of the partners will be adjusted on the basis of W’s Capital through their Current Accounts.
Prepare Revaluation Account, Partners’ Current Accounts and Capital Accounts.
SOLUTION
