Snehal and Meenal are equal partners in a business. Their Balance sheet is as follows:

Snehal and Meenal are equal partners in a business. Their Balance sheet is as follows:

Balance Sheet as on 31 March, 2012


They agreed to admit Kamal on 1st April, 2012 on the following terms.
1) He should bring 50,000 towards his capital for 1/4th share in future profit.
2) Goodwill A/c be raised in the books of the firm Rs 40,000/-
3) R.D.D to be maintained at 5% on debtors.
4) Premises to be valued at Rs 30,000 and Equipments to be written off fully.
5) Interest at the rate of 15% p.a. is due on bank loan.
6) Creditors allowed a discount of Rs 1100/- and they were paid off immediately.
Pass necessary journal entries to record the above scheme of admission.

Solution: