Manoj and Rahul are equal partners in a business. Their Balance sheet as on 31 March, 2013 stood as under:
Balance Sheet as on 31 March, 2013
They decided to admit Amit on 1 April, 2013 on the following terms:
1) The Machinery and Building be depreciated by 10%
2) Reserve for doubtful debts to be increased to Rs 5,000.
3) Bills receivable are taken over by Manoj at a discount of 5%.
4) The amount of creditors paid at a discount of 10%.
5) The Capital Accounts of all the partners be adjusted in current account of partners.
6) Amit should bring Rs 80,000 as capital for his 1/4 in future profits and goodwill account be opened in the books of the firm at Rs 40,000.
Prepare Profit and Loss Adjustments A/c, Partner’s Capital A/c and Balance sheet of the firm.
SOLUTION:
