J, H and K were partners in a firm sharing profits in the ratio of 5 : 3 : 2. On 31st March, 2015, their Balance Sheet was as follows:

( Rs.)
( Rs.)
Creditors42,000Land and Building1,24,000
Investment Fluctuation Fund20,000Motor Vans40,000
Profit and Loss Account80,000Investments38,000
Capital A/c :   Machinery24,000
J 1,00,000Stock30,000
H – 80,000Debtors80,000
 K 40,0002,20,000Less: Provision – (6,000)74,000
 3,62,000 3,62,000

On the above date, H retired and J and K agreed to continue the business on the following terms :
(i) Goodwill of the firm was valued at Rs. 1,02,000.
(ii) There was a claim of Rs. 8,000 for workmen’s compensation.
(iii) Provision for bad debts was to be reduced by Rs. 2,000. 
(iv) H will be paid Rs. 14,000 in cash and balance will be transferred in his Loan Account which will be paid in four equal yearly instalments together with interest @ 10% p.a.
(v) The new profit-sharing ratio between J and K will be 3 : 2 and their capitals will be in their new profit-sharing ratio. The capital adjustments will be done by opening Current Accounts.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.


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