P and Q are partners sharing profits in 3 : 1, R is admitted and the partners decide to share the future profits in the ratio of 2 : 1 : 1. The Balance Sheet of P and Q as at 31st March 2009 was as under:
| Liabilities | Rs. | Assets | Rs. |
| Creditors | 30,000 | Bank | 15,000 |
| Profit and Loss Account | 60,000 | Debtors | 60,000 |
| Capital A/cs: | Stock | 1,50,000 | |
| P 3,50,000 | Prepaid expenses | 20,000 | |
| Q 2,20,000 | 5,70,000 | Plant & Machinery | 1,40,000 |
| Premises | 2,75,000 | ||
| 6,60,000 | 6,60,000 |
(i) Part of the stock which has been included at a cost of Rs. 8,000 had been badly damaged in storage and could realise only Rs. 2,000
(ii) A bill for Rs. 7,000 for electric charges has been omitted to be recorded.
(iii) Plant & Machinery was found overvalued by Rs. 20,000. Premises be appreciated to Rs. 3,00,000.
(iv) Prepaid expenses be brought down to 40%.
(v) R's share of goodwill is valued at Rs. 20,000 but he is unable to bring it in cash.
(vi) R brings in capital proportionate to his share of profit in the firm
Prepare Revaluation A/c, Capital A/cs and the opening Balance Sheet.
