A and B were partners sharing profits and losses in the ratio

73 :- A and B were partners sharing profits and losses in the ratio of 3:2. Their balance sheet as at 31^st March, 2018, was as follows

C was admitted as a new partner and brought Rs 64,000 as capital and Rs 15,000 for his share of goodwill premium. The new profit sharing ratio was 5:3:2. On C’s admission the following was agreed upon:
(i) Stock was to be depreciated by 5%.
(ii) Provision for doubtful debts was to be made at Rs 2,000.
(iii) Furniture was to be depreciated by 10%.
(iv) Building was valued at Rs 1,60,000.
(v) Capitals of A and B were to be adjusted on the basis of C’s capital by bringing or paying of cash as the case maybe.
Prepare Revaluation account, Partner’s capital accounts and the Balance sheet of reconstituted firm.

Solution :-

WORKING NOTES :-
(i) Calculation of their gaining/sacrificing share
A = 3/5 – 5/10 = 1/10
B = 2/5 – 3/10 = 1/10
Therefore, the amount of premium for goodwill will be distributed in 1:1

(ii) Adjustment of capital
Total capital of the firm = 64,000 x 10/2 = Rs 3,20,000
Calculation of each partner’s capital
A = 3,20,000 x 5/10 = Rs 1,60,000
B = 3,20,000 x 3/10 = Rs 92,000
C = 3,20,000 x 2/10 = Rs 64,000