Q80.Deepika and Rajshree are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019 their Balance Sheet was:
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Liabilities
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Assets
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Sundry Creditors Public Deposits Bank Overdraft
Outstanding Liabilities Capital A/cs:
Deepika 48,000
Rajshree 40,000
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16,000
61,000
6,000
2,000
88,000
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Cash in Hand Cash at Bank Stock
Prepaid Insurance Sundry Debtors
Less: Provision for Doubtful Debts Plant and Machinery
Land and Building Furniture
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28,000
800
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1,200
2,800
32,000
1,000
48,000
50,000
10,000
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1,73,000
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1,73,000
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On 1st April, 2019 the partners admit Anshu as a partner on the following terms:
- The new profit-sharing ratio of Deepika, Rajshree and Anshu will be 5 : 3 : 2 respectively.
- Anshu shall bring in 32,000 as his capital.
- Anshu is unable to bring in any cash for his share of goodwill. Partners, therefore, decide to calculate the goodwill on the basis of Anshu's share in the profits and the capital contribution made by her to the firm.
- Plant and Machinery is to be valued at 60,000, Stock at 40,000 and the Provision for Doubtful Debts is to be maintained at 4,000. Value of Land and Building has appreciated by 20%. Furniture has been depreciated by 10%.
- There is an additional liability of 8,000 being outstanding salary payable to employees of the firm. This liability is not included in the outstanding liabilities, stated in the above Balance Sheet. Partners decide to show this liability in the books of account of the reconstituted firm.
Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of Deepika, Rajshree and Anshu.