Following was the Balance Sheet of A, B and C who were equal partners as at 31st March, 2019:

They admit D into partnership from 1st April 2019 and for 1/4th share in the profits on the following terms: (i) D should bring in RS.9,000 for goodwill and RS.15,000 as capital.
Stock and Furniture be reduced by 10%.
(iii) A Provision of 5% on Debtors be created for Doubtful Debts.
(iv) A liability for RS.1,080 be created against dishonoured bills discounted from a NBFC.
(v) The value of the Building is undervalued by RS.8,500.
(vi) The values of liabilities and assets other than cash are not to be altered.
Give necessary entries to give effect to the above stated arrangement and prepare Opening Balance Sheet of the firm as newly constitued.

Explanation

Note: By preparing the Partner's Capital Accounts students can get balances of C apital Accounts.