A, B and Care in partnership sharing profits in the ratio of 3: 2:1. On 28th 2017 C retires from the firm. Their Balance Sheet as at that date was as

February.

follows:
Assets
Sundry Creditors 1,20,000
Outstanding Expenses 10,000
PRofit & Loss Account 1,50,000

Capital Accounts:

A 500000
B 300000
C 200000= 1000000
Total
12,80,000



Liabilities:
Stock: 2,50,000
Investments: 3,00,000
Fixed Assets: 5,40,000
Bank: 25,000
Debtors:1,65,000

Total
12,80,000

The following was agreed upon:

(1) Goodwill of the firm is valued at 1,50,000. C sells his share of goodwill to A and B in the ratio of 4: 1.

(ii) Stock is revalued at 3,00,000 and debtors are revalued at 1,50,000.

(iii) Outstanding expenses be brought down to 3,000.

(iv) Investments are sold at a loss of 10%.

(v) C is paid off in full.
Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.