Adjustment of capital
30. Ram, Mohan, Sohan and Hari were partners in a firm sharing profits in the ratio of 4 : 3 : 2 : 1. On 1st April, 2016, their Balance Sheet was as follows:
| BALANCE SHEET OF RAM, MOHAN, SOHAN AND HARI as on 1st April, 2016 |
||||
| Liabilities | ₹ | Assets | ₹ | |
| Capital A/Cs: | Fixed Assets | 9,00,000 | ||
| Ram | 4,00,000 | Current Assets | 5,20,000 | |
| Mohan | 4,50,000 | |||
| Sohan | 2,50,000 | |||
| Hari | 2,00,000 | 13,00,000 | ||
| Workmen Compensation Reserve | 1,20,000 | |||
| 14,20,000 | 14,20,000 | |||
From the above date, the partners decided to share the future profits in the ratio of 1 : 2 : 3 : 4. For this purpose the goodwill of the firm was valued at ₹1,80,000. The partners also agreed for the following:
(a) The claim for workmen compensation has been estimated at ₹1,50,000.
(b) Adjust the capitals of the partners according to new profit-sharing ratio by opening Partners' Current Accounts.
Prepare Revaluation Account, Partners' Capital Accounts and the Balance Sheet of the reconstituted firm.
