BALANCE SHEET OF RAM AND SHYAM as at 31st March, 2021
|Liabilities||Amount (Rs.)||Assets||Amount (Rs.)|
|Creditors||70,000||Cash at Bank||25,000|
|General Reserve||25,000||Debtors – 1,62,500|
|Employees’ Provident Fund||55,000||Less: Provision for Doubtful debts – (12,500)||1,50,000|
|Ram – 1,50,000||Machinery||142,500|
|Shyam – 1,00,000||2,50,000|
They decided to admit Mahesh on 1st April, 2021 for 1/5th share which Mahesh acquired wholly from Shyam on the following terms:(i) Mahesh shall bring Rs. 25,000 as his share of premium for Goodwill.
(ii) A debtor whose dues of Rs. 7,500 were written off as bad debt paid Rs. 5,000 in settlement.
(iii) A claim of Rs. 12,500 on account of workmen’s compensation was to be provided for.
(iv) Machinery were undervalued by Rs. 5,000. Stock was valued 10% more than its
(v) Mahesh was to bring in capital equal to 20% of the combined capitals of Ram and Shyam after all adjustments.
Prepare Revaluation Account, Partners’ Capital Accounts and Balance Sheet of the new firm.