A and B were partners sharing profit and losses in the proportion of 2/3 and 1/3. Their
Balance Sheet is as follows:
Balance Sheet as on 31st March, 2009
Amount Amount
Liabilities (`) Assets (`)
Capitals: Building 62,000
A 46,000 Stock 30,000
B 34,000 Debtors 21,500
General Reserve 9,000 Less: R.D.D. (1,500) 20,000
Profit and Loss A/c 3,000 Furniture 20,000
Sundry Creditors 43,000 Office Equipments 6,000
A’s loan A/c 11,000 Cash 8,000
1,46,000 1,46,000
On 1st April 2009, D is admitted in the partnership on the following terms:
a. D should bring in cash ` 15,000 and stock worth ` 5,000 as capital for 20 paise share
in future profits.
b. Half of A's loan repaid with interest ` 200.
c. Goodwill of firm valued at ` 9,000 and it is decided to write off the goodwill.
d. Building is revalued at ` 50,000 and the value of stock be reduced by ` 5,000.
e. Reserve for doubtful debts to be maintained at ` 1,000 only.
f. Capital account balances of all the partners to be adjusted in their new profit sharing
ratio by making adjustments through Partner's Current A/c.
Prepare Profit and Loss Adjustment A/c, Capital A/cs and Balance Sheet of new firm.