Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 1 as at 31st M...........

Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 : 1 as at 31st March, 2019:

They admit C into partnership on the following terms:

1. C was to bring 7,500 as his capital and 3,000 as goodwill for 1/4th share in the firm.
2. Values of the Stock and Plant and Machinery were to be reduced by 5%.
3. A Provision for Doubtful Debts was to be created in respect of Sundry Debtor 375.
4. Building was to be appreciated by 10%.

Pass necessary Journal entries to give effect to the arrangements. Prepare Profit and Loss Adjustment Account (or Revaluation Account), Partners' Capital Accounts and Balance Sheet of the new firm.