Q87.A and B are in partnership sharing profits and losses in the proportion of 2/3rd and 1/3rd respectively. Their Balance Sheet as at 31st March, 2019 was: Cash 1,000; Sundry Debtors 15,000; Stock 22,000; Plant and Machinery 4,000; Sundry Creditors 2,000; Bank Overdraft 15,000; A's Capital 15,000; B's Capital 10,000.

On 1st April, 2019 they admitted C into partnership on the following terms:

1. C to purchase one-quarter of the goodwill for 3,000 and provide 10,000 as capital. C brings in necessary cash for goodwill and capital.
2. Profits and losses are to be shared in the proportion of one-half to A, one-quarter to B and one quarter to C.
3. Plant and Machinery is to be reduced by 10% and 500 are to be provided for estimated Bad Debts. Stock is to be taken at a valuation of 24,940.
4. By bringing in or withdrawing cash the capitals of A and B are to be made proportionate to that of C on their profit-sharing basis.

Prepare necessary Ledger Accounts in the books of the firm relating to the above arrangement and submit the opening Balance Sheet of the new firm.