DK Goel Solutions Q 85 Chapter 3 Admission of a Partner Class 12 CBSE [2023-24]

A and B are partners sharing profits in the ratio of 2 : 1. Following items appeared in their Balance Sheet as at 31st March, 2022 :

A’s Capital ₹ 48,000; B’s Capital ₹ 30,000; Creditors ₹ 15,000; Bank balance ₹ 5,000; Debtors ₹ 20,000; Machinery ₹ 36,000; Stock ₹ 44,000.

They admit C into partnership on 1st April, 2022 with 1/6th share in profits, which he acquires equally from A and B. He brings in ₹ 20,000 as his capital and ₹ 18,000 as goodwill in cash.

Following revaluations were made :

1. I. 5% provision be made for doubtful debts on Debtors and a provision of 2% be made on Debtors and Creditors for discount.
2. II. ₹ 1,000 are prepaid for insurance.
3. III. ₹ 5,000 are outstanding for salaries.
4. IV. ₹ 1,480 for accrued income are to be shown in the books.
5. V. Investments for ₹ 6,000 have been omitted to be recorded in the books.

A and B decide to have their capitals in proportion to their share in profits, based on C’s share. Any excess of capital was to be withdrawn and deficit to be paid in Cash.

Prepare the partner’s capital accounts and give the new balance sheet of the firm.