(Q71-78) Admission of a Partner Ts Grewal Solutions 2025-26

In this article, I have provided Admission of a Partner TS Grewal Solutions 2025-26. You can find the solutions of specifically Q71 to Q78 here. If you have any doubts regarding any of these questions, you can ask in the comments. I will try to resolve your doubts as soon as possible.

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Question 71: (Gautam and Yashica)

Gautam and Yashica are partners in a firm, sharing profits and losses in 3:1 respectively. The Balance Sheet of the firm as on 31st March, 2018 was as follows:

BALANCE SHEET as at 31st March, 2018
Liabilities		Rs.	Assets	Rs.
Sundry Creditors Bills Payable		50,000 30,000 5,00,000	Furniture Stock Debtors Cash in Hand Machinery	60,000 1,40,000 80,000 90,000 2,10,000
Capitals: Gautam Yashica	4,00,000 1,00,000
		5,80,000		5,80,000

Asma is admitted as a partner for 3/8th share in the profits with a capital of 2,10,000 and 50,000 for

her share of goodwill. It was decided that:

(i) New profit-sharing ratio will be 3:2:3.

(ii) Machinery will depreciated by 10% and Furniture by 5,000.

(iii) Stock was revalued at 2,10,000.

(iv) Provision for doubtful debts is to be created at 10% of debtors.

(v) The capitals of all the partners were to be in the new profit-sharing ratio on basis of capital of new partner. Any adjustment to be done through Current Accounts.

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

(CBSE Sample Paper 2019)

Answer:

Revaluation Account
			Cr.
Particulars	Rs.	Particulars	Rs.
To plant and machinery A/c To Furniture A/c To Provision for doubtful debts	21,000	By Stock A/c	70,000
	5,000
	8,000
To profit Gautam’s capital A/c 36,000×3/4=27,000 Yashika’s Capital A/c 36,000×1/4=9,000	36,000

	70,000		70,000

Partners’ Capital A/c
Particulars	Gautam	Yashika	Asma	Particulars	Gautam	Yashika	Asma
To Balance C/d	4,77,000	1,09,000	2,10,000	By Balance b/d By Cash By Premium A/c By Revaluation A/c	4,00,000 50,000 27,000	1,00,000 9,000	2,10,000
	4,77,000	1,09,000	2,10,000		4,77,000	1,09,000	2,10,000
To G’s Current A/c	2,67,000			By Balance b/d	4,77,000	1,09,000	2,10,000
To Balance C/d	2,10,000	1,40,000	2,10,000	By Y’s Current A/c		31,000
	4,77,000	1,40,000	2,10,000		4,77,000	1,40,000	2,10,000

Balance sheet as at 1sh April 2018
Liabilities	Rs.	Assets	Rs.
Sundry creditorsbills payableCapital A/cGautam =2,10,000Yashika =1,40,000Ashma=2,10,000Gautam’s current A/c	50,00030,000 5,60,0002,67,000	FurnitureStockDebtors 80,000Less: Prov. For D.D. 8,000CashMachineryYashika’s Current A/c	55,0002,10,000 72,0003,50,0001,89,00031,000
	9,07,000		9,07,000

Working notes:

WN-1

Calculation of old ratio and sacrificing ratio

Old ratio Gautam : Yashika = 3:1

New ratio Gautam : Yashika : Asma= 3:2:3

Sacrificing ratio= Old ratio – New Ratio

Gautam =3/4-3/8=6-3/8=3/8

Yashika=1/4-2/8=2-2/8=0/8

Therefore sacrificing ratio of Gautam : Yashika = 3:0

WN-2

Calculation of Capital

Total Capital of the new firm on the basis of new partner

Total capital new firm = 2,10,000×8/3=5,60,000

New capital of all partners

Gautam=5,60,000×3/8=2,10,000

Yashika=5,60,000×2/8=1,40,000

Asma=5,60,000×3/8=2,10,000

Question 72: (Ishu and Vishu)

Ishu and Vishu are partners sharing profits in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2025 was as follows:

Liabilities	₹	Assets		₹
Creditors	66,000	Cash at Bank		87,000
General Reserve	10,000	Debtors	42,000
Investment Fluctuation Reserve	4,000	Less:Provision for Doubtful Debts	7,000	35,000
Ishu’s Capital	1,19,000	Investments (Market Value 19,000)		21,000
Vishu’s Capital	1,12,000	Building		98,000
		Plant and Machinery		70,000
	3,11,000			3,11,000

Nishu was admitted on that date for 1/6 share in the profits on the following terms:

(a) Nishu will bring 56,000, as his share of capital.

(b) Goodwill of the firm is valued at 84,000 and Nishu will bring his share of Goodwill in Cash.

(d) All debtors are good.

(e) There is a liability of 9,800 included in Sundry Creditors that is not likely to arise.

(f) Capitals of Ishu and Vishu will be adjusted on the basis of Nishu’s Capital and any excess or deficiency will be made by withdrawing or bringing in Cash by the concerned partner.

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

Answer:

Revaluation Account
Particulars	₹	Particulars	₹
To Gain		By Plant and Machinery A/c	14,000
Isha’s capital A/c – 18,480		By Provision for Doubtful Debts A/c	7,000
Vishnu’s capital A/c – 12,320	30,800	By Creditors A/c	9,800

	30,800		30,800

	Dr.	Capital A/c									Cr.
	Particulars	Isha		Vishnu		Nishu	Particulars		Isha	Vishnu	Nishu
	To Cash A/c			22,720			By Balance B/d		1,19,000	1,12,000	–
	To Balance C/d	1,68,000		1,12,000		56,000	By Cash A/c		–	–	56,000
							By Premium of Goodwill A/c		8,400	5,600	–
							By Revaluation A/c (Gain)		18,480	12,320	–
							By Investment Fluctuation Reserve A/c		1,200	800
							By General Reserve		6,000	4,000
							By Cash A/c		14,920
		1,68,000		1,34,720		56,000			1,68,000	1,34,720	56,000
Balance sheet
Liabilities			₹		Assets			₹
Creditors (66,000-9,800)			56,200		Cash at Bank			1,49,200
					Debtors			42,000
Ishu’s Capital			1,68,000
Vishu’s Capital			1,12,000		Investments			19,000
Nishu’s Capital			56,000		Building			98,000
					Plant and Machinery			84,000
			3,92,200					3,92,200

Working notes:

WN 1:

Nishu’s Share of goodwill = 84,000×1/6= 14,000

14,000 Will be share by Isha and Vishnu in 3:2

Isha = 14,000×3/5= 8,400

Vishnu = 14,000×2/5= 5,600

WN 2: Calculation of Capital

Nishus’s share of Capital ₹56,000

Total Capital of Firm on the basis of Nishu’s Capital

Total Capital of Firm= 56,000×6/1=3,36,000

New Capital of Isha = 3,36,000-56,000×3/5=1,68,000

New Capital of Vishnu = 3,36,000-56,000×2/5=1,12,000

WN 3: Cash Balance

Cash Account
Particulars	₹	Particulars	₹
To Balance B/d	87,000	By Vishnu’s Capital A/c	22,720
ToNishus’s Capital A/c	56,000	By Balance C/d	1,49,200
To Premium of Goodwill A/c	14,000
To Isha’s Capital A/c	14,920

	1,79,120		1,79,120

Question 73: (A and B)

A and B were partners sharing profits and losses in the ratio of 3:2. Their Balance Sheet as at 31st March, 2018, was as follows:

BALANCE SHEET OF A AND B as at 31st March, 2018
Liabilities		Rs.	Assets		Rs.
Capitals:			Cash		8,000 36,000 60,000 6,000 76,000 1,40,000 20,000
A B	1,04,000 52,000	1,56,000	Sundry Debtors Less: Provision for Doubtful Debts	37,600 (1,600)
Creditors Employees’ Provident Fund Workmen Compensation Fund Contingency Reserve		1,54,000 16,000 10,000 10,000	Stock Prepaid Insurance Plant and Machinery Building Furniture
		3,46,000			3,46,000

C was admitted as a new partner and brought 64,000 as capital and 15,000 for his share of goodwill premium.

The new profit-sharing ratio was 5 : 3 :2. On C’s admission the following was agreed upon:

(i) Stock was to be depreciated by 5%.

(ii) Provision for doubtful debts was to be made at 2,000.

(iii) Furniture was to be depreciated by 10%.

(iv) Building was valued at Rs.1,60,000.

(v) Capitals of A and B were to be adjusted on the basis of C’s capital by bringing or paying of cash as the case may be.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of reconstituted firm. (CBSE 2019)

Answer:

Revaluation Account
Dr.											Cr.
Particulars						Rs.			Particulars		Rs.
To Stock To Provision for D.D. To Furniture To Profit transferred to						3,000 400 2,000			By Building		20,000
A=14,600×3/5=			8,760
B=14,600×2/5=			5,840			14,600
						20,000					20,000

Partners’ Capital Account
Dr.															Cr.
Particulars		A			B			C		Particulars			A	B	C
Balance c/d		1,32,260			73,340			64,000		Balance b/d			1,04,000	52,000
										Cash A/c					64,000
										Premium for Goodwill			7,500	7,500
										Revaluation A/c (Profit)			8,760	5,840
										Workers’ compensation reserveContingency reserve			60006000	40004000
		1,32,260			73,340			64,000					1,32,260	73,340	64,000
Balance c/d		1,60,000			96,000			64,000		Balance b/dCash A/c			1,32,26027,740	73,34022,660	64,000
		1,60,000			96,000			64,000					1,60,000	96,000	64,000

Balance Sheet as on March 31, 2019
Liabilities				Rs.			Assets					Rs.
Creditors				1,54,000			Cash (8,000+64,000+15,000+50,400)					1,37,400
							Debtors 37,600Less; Prov. For D.D. 2,000					35,600
Employees Provident Fund				16,000			StockPrepaid InsurancePlant and MachineryBuilding					57,0006,00076,0001,60,000
Capital A/cs:							Furniture					18,000
Raghu	1,60,000
Rishu	96,000
Rishabh	64,000			3,20,000

				4,90,000								4,90,000

Working notes;

WN-1 Calculation of old and sacrificing ratio;

Old ratio of A and B =3:2

New ratio of A:B:C =5:3:2

A=3/5-5/10=6-5/10=1/10

B=2/5-3/10=4-3/10=1/10

Sacrificing ratio of A and B is 1:1

WN-2 Calculation of new firm’s capital;

Total capital of new firm on the basis of C’s Capital

C’s capital = 64,000

New firm’s total capital=64,000×10/2=3,20,000

New capital of A,B and C

A= 3,20,000×5/10 = 1,60,000

B= 3,20,000×3/10 = 96,000

C= 3,20,000×2/10 = 64,000

Question 74: (Raman and Rohit)

Raman and Rohit were partners in a firm sharing profits and losses in the ratio of 2: 1. On 31st March, 2018, their Balance Sheet was as follows:

BALANCE SHEET OF RAMAN AND ROHIT as at 31st March, 2018
Liabilities		Rs.	Assets		Rs.
Capitals: Raman Rohit	1,40,000 1,00,000	240,00040,0001,60,000	Plant and Machinery Furniture and Fixtures Stock		1,75,000 65,000 47,000 1,03,000 50,000
Workmen Compensation FundCreditors			DebtorsLess: Provision for Doubtful Debts	1,10,000 (7,000)
			Bank Balance
		4,40,000			4,40,000

On the above date, Saloni was admitted in the partnership firm. Raman surrendered 2/5th of his share and Rohit surrendered 1/5th of his share in favour of Saloni. It was agreed that:

(i) Plant and machinery will be reduced by 35,000 and furniture and fixtures will be reduced to 58,500.

(ii) Provision for bad and doubtful debts will be increased by 3,000.

(iii) A claim for 16,000 for workmen’s compensation was admitted.

(iv) A liability of 2,500 included in creditors is not likely to arise.

(v) Saloni will bring 42,000 as her share of goodwill premium and proportionate capital.

Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the reconstituted firm. (CBSE 2019)

Answer:

Revaluation Account

Dr.

Cr.

Particulars

To Plant and Machinery

35,000

By Creditors

2,500

To Furniture and fixtures

6,500

By Loss transferred to;

To Provision of doubtful debts

3,000

Raman’s Capital A/c(42,000×2/3)

28,000

Rohit’s Capital A/c(42,000×1/3)

14,000

42,000

44,500

Partners’ Capital Accounts

Dr.

Cr.

Particulars

Abha

Binay

Chitra

Particulars

Abha

Binay

Chitra

To Revaluation

28,000

14,000

–

By Balance b/d

140,000

1,00,000

–

To Balance c/d

1,61,600

1,02,400

–

By Premium

33,600

8,400

–

By W.C.F.

16,000

8,000

–

1,89,600

1,16,400

–

1,89,600

1,16,400

–

To Balance c/d

1,61,600

1,02,400

1,32,000

Bank A/c

–

1,32,000

1,61,600

1,02,400

1,32,000

1,61,600

1,02,400

1,32,000

Balance Sheet as on April 31, 2018

Liabilities

Rs.

Assets

Rs.

Creditors

1,57,500

Plant and MachineryFurniture and fixture

1,40,00058,500

Stock

47,000

worker compensation liabilities

16,000

Debtors 1,10,000Less; Prov. For D.D. 10,000

1,00,000

Capital A/cs:

Cash at Bank

2,24,000

Raman

1,61,600

(50,000+1,32,000+42,000)

Rohit

1,02,400

Saloni

1,32,000

3,96,000

5,69,500

Working note;

WN-1

Calculation of old and sacrificing ratio

Old ratio Raman: Rohit=2:1

Raman surrenders to Saloni=2/3×2/5=4/15

Rohit surrenders to Saloni=1/3×1/5=1/15

New share of –

Raman=2/3-4/15=10-4/15=6/15

Rohit=1/3-1/15=5-1/15=4/15

Saloni=4/15+1/15+5/15

Therefore new ratio of Raman, Rohit and Saloni =6:4:5

Sacrificing ratio= old – new

Raman=2/3-6/15=10-6/15=4/15

Rahit=1/3-4/15=5-4/15=1/15

WN-1

Calculation of Capital of Raman and Rohit=1,61,600+1,02,400=2,64,000

Share of Raman and Rohit=6/15+4/15=6+4/15=10/15

Therefore, Capital of Raman , Rohit and Saloni=2,64,000×15/10=3,96,000

Saloni’s capital=3,96,000×5/15=1,32,000

Question 75: (L, M, and N)

L, M and N were partners in a firm sharing profits in the ratio of 3 : 2 : 1. Their Balance Sheet on 31st March, 2015 was as follows:

Liabilities		Rs.	Assets	Rs.
Creditors		1,68,000	Bank	34,000
General Reserve		42,000	Debtors	46,000
Capital’s A/cs: L	1,20,000		Stock	2,20,000
M	80,000		Investments	60,000
N	40,000	2,40,000	Furniture	20,000
			Machinery	70,000

		4,50,000		4,50,000

On the above date, O was admitted as a new partner and it was decided that:
(i) The new profit-sharing ratio between L, M, N and O will be 2 : 2 : 1 : 1.
(ii) Goodwill of the firm was valued at 1,80,000 and O brought his share of goodwill premium in cash.
(iii) The market value of investments was 36,000.
(iv) Machinery will be reduced to 58,000.
(v) A creditor of 6,000 was not likely to claim the amount and hence was to be written off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the new firm.

Answer:

Revaluation Account
Dr.					Cr.
Particulars	Rs.	Particulars		Rs.
Investments	24,000	Creditors		6,000
Machinery	12,000	Loss on Revaluation
		L’s Capital A/c	15,000
		M’s Capital A/c	10,000
		N’s Capital A/c	5,000	30,000

	36,000			36,000

Partners’ Capital Account
Dr.									Cr.
Particulars	L	M	N	O	Particulars	L	M	N	O
Reval. A/c	15,000	10,000	5,000		Balance b/d	1,20,000	80,000	40,000
Balance c/d	1,56,000	84,000	42,000	56,400	Gen. Reserve	21,000	14,000	7,000
					Premium for G/w	30,000
					Cash A/c				56,400

	1,71,000	94,000	47,000	56,400		1,71,000	94,000	47,000	56,400

Balance Sheet as on March 31, 2016 after admission of new partner
Liabilities		Rs.	Assets	Rs.
Creditors		1,62,000	Bank (34,000+56,400+30,000)	1,20,400
Capitals:			Debtors	46,000
L	1,56,000		Stock	2,20,000
M	84,000		Investments	36,000
N	42,000		Furniture	20,000
O	56,400	3,38,400	Machinery	58,000
		5,00,400		5,00,400

Working Notes:

WN1: Calculation of Sacrificing Ratio
Sacrificing Ratio =Old ratio- new ratio

L= 3/6-2/6=1/6

M=2/6-2/6=Nil

N=1/6-1/6=- Nil

WN2: Adjustment of Goodwill
O‘s of goodwill=1,80,000×1/6=30,000

30,000 will be credited to L’s capital because he is only sacrifice.

WN3: Calculation of O’s Proportionate Capital

Adjusted old capital of L =

Adjusted old capital of M =

Adjusted old capital of N =

O’s proportion capital=Total adjusted capital×O’s profit share × reciprocal combined new share of old partners

=2,82,000×1/6×6/5=56,400

Question 76: (Leena and Rohit)

Leena and Rohit are partners in a firm sharing profits in the ratio of 3: 2. On 31st March, 2018, their Balance Sheet was as follows:

BALANCE SHEET OF LEENA AND ROHIT as at 31st March, 2018
Liabilities		Rs.	Assets		Rs.
Sundry CreditorsBills PayableGeneral ReserveCapitals:		80,00038,00050,000	Cash		42,000
			DebtorsLess: Provision for Doubtful Debts	1,32,0002,000	1,30,000
			Stock Plant and Machinery		1,46,000 1,50,000
Leena Rohit	1,60,000 1,40,000	3,00,000
		4,68,000			4,68,000

On the above date Manoj was admitted as a new partner for 1/5th share in the profits of the firm on the following terms:

(i) Manoj brought proportionate capital. He also brought his share of goodwill premium of 80,000 in cash.

(ii) 10% of the general reserve was to be transferred to provision for doubtful debts.

(iii) Claim on account of workmen’s compensation amounted to 40,000.

(iv) Stock was overvalued by 16,000.

(v)Leena, Rohit and Manoj will share future profits in the ratio of 5:3:2.

Prepare Revaluation Account, Partners’ Capital Accounts and the Balance Sheet of the reconstituted firm. (CBSE 2019)

Answer:

Revaluation Account
Dr.			Cr.
Particulars	Rs.	Particulars	Rs.
To workers’ compensation LiabilitiesTo Stock	40,00016,000	By loss transferred to ;Rohit×3/5=33,600Leena×2/5=22,400	56,000

	56,000		56,000

Partners’ Capital Accounts
Dr.							Cr.
Particulars	Leena	Rohit	Manoj	Particulars	Leena	Rohit	Manoj
To Revaluation A/c	32,600	22,400		By Balance b/d	160,000	140,000
To Balance c/d	1,93,400	1,75,600	92,250	By Premium A/c	40,000	40,000
				By General reserve A/cBy Cash A/c	27,000	18,000	92,250

	2,27,000	1,98,000	92,250		2,27,000	1,98,000	92,250

Balance Sheet as on March 31, 2018 after Leander’s admission
Liabilities	Rs.	Assets		Rs.
Creditors Bills payables Workers’ compensation liabilities	80,000 38,000 40,000	Cash (42,000+80,000+92,250) Debtors Less; prov. For doubtful debts	1,32,000 7,000	2,14,250 1,25,000
Capital A/c;Leena 1,93,400 Rohit 1,75,600 Manoj 92,250	4,61,250	Stock Plant and machinery		1,30,000 1,50,000






	6,19,250			6,19,250

Working Notes

WN 1:
Calculation of old ratio and sacrificing ratio:

	Leena	Rohit	Manoj
OLD RATION	3 :	2
NEW RATIO	5 :	3 :	2

Sacrificing ratio= Old ratio – New Ratio

Leena =3/5-5/10=6-5/10=1/10

Rohit =2/5-3/10=4-3/10=1/10

Sacrificing ratio of Leena : Rohit=1:1

WN 2:

Calculation of Manoj’s capital

Capital of Leena and Rohit = 1,93,400+1,75,600=3,69,000

Share of Leena and Rohit = 8/10

Hence Capital of Leena ,Rohit and Manoj=3,69,000×10/8=4,61,250

Accordingly capital of Manoj=4,61,250-3,69,000=92,250

Question 77: (Ram and Shyam)

On 31st March, 2024 the Balance Sheet of Ram and Shyam who share profits and losses in the ratio of 3:2 was as follows:

BALANCE SHEET OF RAM AND SHYAM as at 31st March, 2024
Liabilities		Rs.	Assets		Rs.
Creditors General Reserve Employees’ Provident Fund		70,000 25,000 55,000	Cash at Bank		25,000 1,50,000 82,500 142,500
			DebtorsLess: Provision for Doubtful debts	1,62,500 12,500
			Stock Machinery
Capitals:RamShyam	1,50,000 1,00,000	2,50,000
		4,00,000			4,00,000

They decided to admit Mahesh on 1st April, 2024 for 1/5th share which Mahesh acquired wholly from Shyam on the following terms:

(i) Mahesh shall bring 25,000 as his share of premium for Goodwill.

(ii) A debtor whose dues of 7,500 were written off as bad debt paid 5,000 in settlement.

(iii) A claim of 12,500 on account of workmen’s compensation was to be provided for.

(iv) Machinery were undervalued by 5,000. Stock was valued 10% more than its market value.

(v) Mahesh was to bring in capital equal to 20% of the combined capitals of Ram and Shyam after all adjustments.

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

Answer:

Revaluation Account
Dr.
Particulars	Rs.	Particulars	Rs.
To Worker compensation liabilities	12,500	By Bad debts Recovered	5,000
To Stock (82,500×10/110)	7,500	By Machinery	5,000
		By Loss transferred to-
		Ram=10,000×3/5=6,000
		Shyam=10,000×2/5=4,000(In old Ratio: 3:2)	10,000
	20,000		20,000

Partners’ Capital Accounts
Dr.								Cr.
Particulars	Ram	Shyam	Mahesh	Particulars	Ram	Shyam	Mahesh
To Revaluation A/c	6,000	4,000		By Balance b/d	1,50,000	1,00,000
				By Premium A/c		25,000
To Balance c/d	1,59,000	1,31,000		By General Reserve	15,000	10,000
	1,65,000	1,35,000			1,65,000	1,35,000
To Balance c/d	1,59,000	1,31,000	58,000	Balance b/d	1,59,000	1,31,000
				Bank A/c			58,000
	1,59,000	1,31,000	58,000		1,59,000	1,31,000	58,000

Balance Sheet as on 1^st April, 2024
Liabilities		Rs.	Assets		Rs.
Workmen Compensation Reserve		12,500	Bank A/c		1,13,000
Employees Provident Fund		5,500	(25,000+25,000+58,000+5,000)
Creditors		70,000	machinery		1,47,500
Capital			Stock		75,000
Ram	1,59,000
Shyam	1,31,000		Debtors	1,62,500
Mahesh	58,000	3,48,000	Less : Provision for Doubtful Debts	12,500	1,50,000

		4,85,500			4,85,500

Working notes:

WN-1

Calculation of Old and sacrificing ratio:

Old ratio of Ram and shyam= 3:2

New ratio of;

Ram=3/5

Shyam=2/5-1/5=2-1/5=1/5

Mahesh= 1/5

New ratio of Ram, shyam and Mahesh=3:1:1

Sacrificing ratio of –

Ram =3/5-3/5=3-3/5=0/5

Shyam=2/5-1/5=2-1/5=1/5

Sacrificing ratio of Ram and Shyam = 0:1

WN-2

Adjusted Capital of Ram and shyam= 1,59,000+1,31,000=2,90,000

Mahesh’s capital= 2,90,000×20/100=58,000

Question 78: (Aan and Shaan)

Aan and Shaan were partners sharing profits in the ratio of 3: 2. Their Balance Sheet as at 31st March, 2024 was as under:

Liabilities	Rs.	Assets	Rs.
Creditors	2,00,000	Cash	148,000
Employees’ Provident Fund	30,000	Debtors 2,05,000
Bank Overdraft	1,70,000	Less: Provision for Doubtful Debts 3,000	2,02,000
Reserve	1,50,000	Stock	2,00,000
Capital A/cs:		Plant and Machinery	6,00,000
Aan’s 7,00,000		Building	7,00,000
Shaan’s 6,00,000	13,00,000
	18,50,000		18,50,000

They agreed to admit Mohan for 1/4th share on the above date subject to the following terms:

(i) Mohan to bring in capital equal to 1/4th of the total capital of Aan and Shaan after all adjustments including premium for goodwill.

(ii) Building to be appreciated by 20% and stock to be depreciated to 70%.

(iii) Provision for Doubtful Debts on Debtors to be raised to 10,000.

(iv) A provision be made for 18,000 for outstanding legal charges.

(v) Mohan’s share of goodwill premium was calculated as 1,00,000.

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

Answer:

Revaluation Account
Particulars	Rs.	Particulars	Rs.
Stock	60,000	Building	1,40,000
Provision for Doubtful Debts	7,000
Legal Charges	18,000
Gain	55,000

	1,40,000		1,40,000

Capital account
Particulars	Amit	Anil	Ankit	Particulars	Amit	Anil	Ankit
To Balance c/d	8,83,000	7,22,000	4,01,250	By Balance B/d	7,00,000	6,00,000	–
				By Cash A/c			4,01,250
				By Premium A/c	60,000	40,000
				By Revaluation A/c	33,000	22,000
				By Reserve A/c	90,000	60,000
	8,83,000	7,22,000	4,01,250		8,83,000	7,22,000	4,01,250

	BALANCE SHEET as at 31st March, 2024
Liabilities		Rs.	Assets		Rs.
Creditors		2,00,000	Cash		6,49,250
Bank Overdraft		1,70,000
Employees’ Provident Fund		30,000	Debtors	2,05,000
O/s Legal charges		18,000	Less: Provision for Doubtful Debts	10,000	1,95,000
Capital A/cs:			Stock		1,40,000
Aan – 8,83,000			Plant and Machinery		6,00,000
Shaan – 7,22,000			Building		8,40,000
Mohan – 4,01,250		20,06,250

		24,24,250			24,24,250