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X and Y are partners sharing profits in the ratio of 2 : 1. Their Balance Sheet as at 31st March, 2023 was:

Liabilities Assets
Sundry Creditors

General Reserve

Capital A/cs:

X

Y

25,000

18,000

75,000

62,000

Cash/Bank

Sundry Debtors

Stock

Investments

Printer

Fixed Assets

5,000

15,000

10,000

8,000

5,000

1,37,000

1,80,000 1,80,000

They admit Z into partnership on 1st April, 2023 on the following terms:

a) Z brings in ₹ 40,000 as his capital and he is given 1/4th share in profits.

b) Z brings in ₹ 15,000 for goodwill, half of which is withdrawn by old partners.

c) Investments are valued at ₹ 10,000. X takes over Investments at this value.

d) Printer is to be reduced (depreciated) by 20% and Fixed Assets by 10%.

e) An unrecorded stock on 31st March, 2023 is ₹ 1,000.

f) By bringing in or withdrawn cash, the Capitals of X and Y are to be made proportionate to that of Z on their profit sharing ratio.

Pass Journal entries, prepare Revaluation Account, Capital Accounts and new Balance Sheet of the firm.

Anurag Pathak Changed status to publish May 28, 2023
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