Karan and Vijay are partners in a firm sharing profits and losses in the ratio of 4 : 3. They admit Shrey for 1/3 share in the profits.

Karan and Vijay are partners in a firm sharing profits and losses in the ratio of 4 : 3. They admit Shrey for 1/3 share in the profits.

On the date of Shrey’s admission:

(a) The capitals of Karan and Vijay are : ₹ 40,000 and ₹ 30,000 respectively.

(b) Profit and Loss Account has a debit balance of ₹ 7,000.

(c) General Reserve shows a balance of ₹ 21,000 which is not to be disturbed.

(d) Goodwill of the firm is valued at ₹ 42,000.

(e) The cash at bank is ₹ 15,000.

(f) Shrey brings in proportionate capital and his share of goodwill in cash.

You are required to prepare:

(i) Partner’s Capital Accounts:

(ii) Cash at Bank Account of the reconstituted firm on the date of Shrey’s admission.

[Ans. Capital Accounts : karan ₹ 48,000; Vijay ₹ 36,000 and Shrey ₹ 42,000; Balance at Bank ₹ 71,000.]