A and B aer partners sharing profits and losses in the ratio of 3 : 2. On 31st March, 2019, their Balance Sheet was as follows:

They admit C as a partnre with effect from 1st April, 2019, for 1/3rd share on the following terms:
(i) C will bring in RS.5,00,000 as capital and RS.2,00,000 as his share of goodwill but he actually contributed only RS. 1,20,000 towards goodwill.
(ii) Building and Machinery ot be depreciated by 5%.
(iii) Stock to be revalued at RS. 4,00,000.
(iv) There is an unrecorded asset worth RS.1,20,000.
(v) One month salary of RS.30,000 is outstanding.
Prepare Revaluation Account, Bank Account, Capital Accounts of Partners and the Balance Sheet after the admission of C.

Explanation

Working Notes:
1. Calculation of New Profit-sharing Ratio:
C's share = 1/3, Remaining share = 1- 1/3 =2/3, which is shared by A and B in their old ratio, i.e., 3 : 2. Thus, A's New Share `=3//5xx2//3,` B's New Share `=2//5xx2//3=4//15`
Thus, New Profit-Shareing Ratio of A, B and C =2/5: 4/15: 1/3 or 6:4:5.
2. Sacrificing Ration will be the same as old ratio among old partners since nothing else is specifically mentioned except the share of new partner. Thus, sacrificing Ratio of A and B is same as old ratio, i.e., 3 : 2.
3. C has brought RS.80,000 short as goodwill. So his Capital Account is debited and A's and B's Capital Accounts are credited in the Sacrificing Ratio. Thus, A and B get credit for the full amount of C's share of goodwill in the Sacrificing Ratio.
Alternatively, unpaid amount of premium for Goodwill RS.80,000 can be adjusted throught C's Current Account by passing the following entry:
`{:(,,RS.,RS.),("C's Current" "A/c",...."Dr.","80,000",),("To A's Capital""A/c",,,"48,000"),("To B's Capital""A/c",,,"32,000"):}`
In such a case the Current A/c of C will show a debit balance and it is shown on the assets side of the reconstituted Balance Sheet and its total would be RS.25,35,000.