Q85 X and Y are partners sharing profits equally Their Balance Sheet as on 31st March 2019 is given ...........

Q85.X and Y are partners sharing profits equally. Their Balance Sheet as on 31st March, 2019 is given below:

Z is admitted as a new partner for 1/4th share under the following terms:

1. Z is to introduce 1,25,000 as capital.
2. Goodwill of the firm was valued at nil.
3. It is found that the creditors included a sum of 7,500 which was not to be paid. But it was also found that there was a liability for Compensation to Workmen amounting to 10,000.
4. Provision for doubtful debts is to be created @ 10% on debtors.
5. In regard to the Partners' Capital Accounts, present Fixed Capital Account Method is to be converted into Fluctuating Capital Account Method.
6. Bills of 20,000 accepted from creditors were not recorded in the books.
7. X provides 50,000 loan to the business carrying interest @ 10% p.a.

You are required to prepare Revaluation Account, Partners' Capital Accounts, Bank Account and the Balance Sheet of the new firm.