Badal and Bijli were partners in a firm sharing profits

70 :- Badal and Bijli were partners in a firm showing profits in the ratio of 3:2. Their balance sheet as at 31^st March, 2019 was as follows

Raina was admitted on the above date as a new partner for 1/6th share of profits of the firm. The terms of agreement were as follows
(a) Raina will bring Rs 40,000 as her capital and capitals of Badal and Bijli will be adjusted on the basis of Raina’s capital by opening current accounts.
(b) Raina will bring her share of goodwill premium for Rs 12,000 in cash.
(c) The building was overvalued by Rs 15,000 and stock by Rs 3,000
(d) A provision of 10% was to be created on debtors for Bad debts.
Prepare Revaluation account and Current and Capital accounts of Badal, Bijli and Raina.

Solution :-

WORKING NOTES :-
(i) Calculation of new profit sharing ratio
Badal’s new share = 3/5 – 3/30 = 15/30
Bijli’s new share = 2/5 – 2/30 = 10/30
Raina -= 1/6 x 5/5 = 5/30
New Profit sharing ratio is 3:2:1

(ii) Adjustment of capital
Total capital of the firm as per Raina’s capital = 40,000 x 6 = Rs 2,40,000
Badal’s new capital = 2,40,000 x 3/6 = Rs 1,20,000
Bijli’s new capital = 2,40,000 x 2/6 = Rs 80,000