P and Q were partners in a firm sharing profits in 3; 2 ratio. R was admitted as a new partner for 1/4th
share in the profits on April 1, 2015. The Balance Sheet of the firm on March 31, 2015 was as
follows:
Balance Sheet of P and Q
As at March 31, 2015
Liabilities Assets
Creditors
General Reserve
Capitals:
P 96,000
Q 68,000
20,000
16,000
1,64,000
Cash
Debtors
Stock
Furniture
Machinery
Buildings
20,000
18,000
20,000
12,000
40,000
90,000
2,00,000 2,00,000
The terms of agreement on R?s admission were as follows:
a) R brought in cash 60,000 for his capital and 30,000 for his share of goodwill.
b) Building was valued at 1,00,000 and Machinery at 36,000.
c) The capital accounts of P and Q were to be adjusted in the new profit-sharing ratio. Necessary
cash was to be brought in or paid off to them as the case may be.
Prepare Revaluation Account, Partner?s Capital Account and the Balance Sheet of P, Q and R