Q76 A and B are partners in a firm The net profit of the firm is divided as follows 1 2 to A 1 3 to ...........

Q76.A and B are partners in a firm. The net profit of the firm is divided as follows: 1/2 to A, 1/3 to B and 1/6 carried to a Reserve. They admit C as a partner on 1st April, 2019 on which date, the Balance Sheet of the firm was:

Liabilities			Assets
Capital A/cs:			Building	50,000
A	50,000		Plant and	30,000
			Machinery
B	40,000	90,000	Stock	18,000
Reserve		10,000	Debtors	22,000
Creditors		20,000	Bank	5,000
Outstanding Expenses		5,000
		1,25,000		1,25,000

Following are the required adjustments on admission of C:

C brings in 25,000 towards his capital.
C also brings in 5,000 for 1/5th share of goodwill. (c) Stock is undervalued by 10%.

Creditors include a liability of 4,000, which has been decided by the court at 3,200.
In regard to the Debtors, the following Debts proved Bad or Doubtful− 2,000 due from X−bad to the full extent;

4,000 due from Y−insolvent, estate expected to pay only 50%.

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

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