Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2019 was as follows:

Capital A/c : Land and Building               2,10,000
Kalpana – 4,80,000Plant2,70,000
Kanika – 2,10,0006,90,000Stock2,10,000
General Reserve60,000Debtors –  1,32,000
Workmen’s Compensation Fund1,00,000Less: Provision – (12,000)1,20,000
 9,40,000 9,40,000

It was agreed that:
(a) the value of Land and Building will be appreciated by 20%
(b) the value of plant be increased by Rs. 60,000.
(c) Karuna will bring Rs. 80,000 for her share of goodwill premium.
(d) the liabilities of Workmen’s Compensation Fund were determined at Rs. 60,000.
(e) Karuna will bring in cash as capital to the extent of 1/5th share of the total capital of the new firm.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.


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