Ashish and Dutta were partners in a firm sharing profits in 3:2 ratio. On Jan. 01, 2015 they admitted Vimal for 1/5 share in the profits. The Balance Sheet of Ashish and Dutta as on Jan. 01, 2016 was as follows:

It was agreed that:
(i) The value of Land and Building be increased by Rs. 15,000.
(ii) The value of plant be increased by 10,000.
(iii) Goodwill of the firm be valued at Rs. 20,000.
(iv) Vimal to bring in capital to the extent of 1/5th of the total capital of the new firm. Record the necessary journal entries and prepare the Balance Sheet of the firm after Vimal’s admission.

Answer

Gain on Revaluation Rs. 25,000. Balance Sheet Total Rs. 2,25,000