A and B are carruying on business in par...

A and B are carruying on business in partnership and sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2019 stood as:

They admit C into partnership on 1st April, 2019 and give hin 1/8th share in future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years' profit which amounted to RS.21,000, RS.24,000 and RS.25,560.
(b) C is to bring cash for the amount of his share of goodwill.
(c) C is to bring cash RS.15,000 as his capital.
Pass Journal entries recording these transactions, draw out the Balance Sheet of the new firm and determine new profit-sharing ratio.

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Balance Sheet Total-RS.1,20, 880, New Ratio-21 : 14 : 5.

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