Q88 A and B were partners in a firm sharing profits in 3 1 ratio They admitted C as a partner for 1 ......

Q88.

A and B were partners in a firm sharing profits in 3 : 1 ratio. They admitted C as a partner for 1/4th share in the future profits. C was to bring 60,000 for his capital. The Balance Sheet of

A and B as at 1st April, 2019, the date on which C was admitted, was:

The other terms agreed upon were:

1. Goodwill of the firm was valued at 24,000.
2. Land and Building were valued at 65,000 and Plant and Machinery at  60,000. (c) Provision for Doubtful Debts was found in excess by 400.

1. A liability of 1,200 included in Sundry Creditors was not likely to arise.
2. The capitals of the partners be adjusted on the basis of C's contribution of capital to the firm.
3. Excess of shortfall, if any, be transferred to Current Accounts.

Prepare Revaluation Account, Partners' Capital Accounts and Balance Sheet of the new firm.

By: Aman