Avinash and Varun are partners in a firm sharing profits and losses in the ratio of 3 : 1. On 1st April, 2023, their position was as given below:
Avinash and Varun are partners in a firm sharing profits and losses in the ratio of 3 : 1. On 1st April, 2023, their position was as given below:
| Liabilities | ₹ | Assets | ₹ |
| Capital A/cs:
Avinash Varun Sundry Creditors |
50,000 30,000 20,000 |
Goodwill
Plant Stock Debtors Cash at Bank |
20,000 30,000 10,000 30,000 10,000 |
| 1,00,000 | 1,00,000 |
They admit Vivek into partnership. He agrees to pay the partners ₹ 20,000 by way of goodwill and introduce one half of the combined capital and Avinash and Varun in the new firm. At the time of admission of Vivek, Plant is reduced by 20%, Stock is reduced by 10% and a provision of 10% against Debtors is created. New Partner is allowed 1/4th share in future profits.
Give Jounrnal entries to record the above transactions and prepare Balance Sheet of the new firm.
Anurag Pathak Changed status to publish July 17, 2023
