Murari and Vohra were partneres in a firm with capital of RS.1,20,000 and RS.1,60,000 respectively. On 1st April, 2010 they admitted Yadav as a partner for one-fourth share in profits on his payment of RS.2,00,000 as his capital and 90,000 for his one-fourth share of googwill.
On that date the creditors of Murari and Vohra were RS.60,000 and Bank overdraft was RS.15,000. Their assets apart from cash included Stock RS.10,000, Debtors RS.40,000, Plant and Machinery RS.80,000, Land and Building RS.2,00,000. It was agreed that Stock should be depreciated by RS.2,000, Plant and Machinery by 20%, RS.5,000 should be written off as Bad Debts and Land and Building should be appreciated by 25%.
Prepare Revaluation Account, Capital Accounts of Murari, Vohra and Yadav and the Balance Sheet of the new firm.