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X and Y are partners sharing profits and...

X and Y are partners sharing profits and losses in the ratio of 3/4 and 1/4. Their Balance Sheet as at 31 st March, 2019 is:

They admit Z partnership on 1st April, 2019 on the following terms:
(a) Goodwill is to be valued at RS.1,00,000.
(b) Stock and Furniture to be reduced by 10%.
(c) A Provision for Doubtful Debts to be created @ 5% on Sundry Debtors.
(d) The value of Land and Building is to be apprecated by 20%.
(e) Z pays RS.50,000 as his capital for 1/5th share in the future profits.
You are required to show Revalutation Accunt, Partnres' Capital Accounts and Balance Sheet of the new firm.

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The correct Answer is:
Gain (Profit) on Revaluation-RS.10,500; Partners' Capital A/cs: X-RS.1,87,875; Y-RS.92,625; Z-RS.30,000; Balance Sheet Total-RS.4,98 ,000.
Note: Z's Share of Goodwill RS.20,000 `(i.e., RS.1,00, 000xx1//5)` can be adjusted through Z's Current A/c. In that situation Partners' Capital A/cs: X-RS.1,87,875, Y-RS.92,625, Z-RS.50,000, Z's Current A/c (Dr.)-RS.20,000, Balance Sheet Total-RS.5,18,000.
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TS GREWAL-Admission of a Partner-EXERCISE
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