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On 31st March, 2019, the Balance Sheet of A and B, who were sharing profits in the ratio of 3 : 2 was as follows:

Liabilities Assets
Creditors

Investment Fluctuation Fund

Capital A/cs:

A

B

30,000

12,000

25,000

1,60,000

1,40,000

Cash at Bank

Debtors
Less: Provision for Bad Debts

Stock

Investments

Furniture

 

85,000
5,000

 

20,000

80,000

1,30,000

60,000

77,000

3,67,000  3,67,000

On 1st April, 2019, they decided to admit C as a new partner for 1/5th share in the profits on the following terms:

i) C brought ₹ 1,00,000 as his capital and ₹ 50,000 as his share of premium for goodwill.

ii) Outstanding salaries of ₹ 2,000 be provided for.

iii) The market value of investments was ₹ 50,000.

iv) A debtor whose dues of ₹ 18,000 were written off as bad debts paid ₹ 12,000 in full settlement.

Prepare Revaluation Account, Partner’s Capital Accounts and the Balance Sheet of the new firm.

Anurag Pathak Changed status to publish May 25, 2023
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