Vaibhav and Vilas were partners sharing profit and losses in the ratio of 2:3 respectively. Their Balance Sheet as on 31 March, 2012 was as follows.
Balance Sheet as on 31 March, 2012
They agreed to admit Vivek as a partner on 1 April 2012 on the following terms:
1) Vivek will have 1/4 share in future profits for which he shall bring Rs 25,000 as his capital and Rs 20,000 as his share of goodwill.
2) Land & Building are valued at Rs 30,000 and while stock is valued at Rs 55,000.
3) Plant is taken over by Vilas 10% discount.
4) Depreciate furniture by 10%.
5) Provision for bad and doubtful debts is to be maintained at 5% on debtors.
6) The capital account of all the partners to be adjusted in their new profit sharing ratio and excess amount to be transferred to their loan account.
Solution:
