L, M and N were partners in a firm sharing profits

75 :- L, M and N were partners in a firm sharing profits in the ratio of 3:2:1. Their balance sheet on 31^st March 2015 was as follows

On the above date, O was admitted as a new partner and it was decided and it was decided that
(i) The new profit-sharing ratio between L, M, N and O will be 2:2:1:1
(ii) Goodwill of the firm was valued at Rs 1,80,000 and O brought his share of goodwill premium in cash
(iii) The market value of investments was Rs 36,000
(iv) Machinery will be reduced to Rs 58,000.
(v) A creditor of Rs 6,000 was not likely to claim the amount and hence was to be written off.
(vi) O will bring proportionate capital so as to give him 1/6th share in the profits of the firm.
Prepare revaluation account, Partners capital accounts and the balance sheet of the new firm.

Solution :-

WORKING NOTES :-
(a) Calculation of sacrificing/gaining share
Old ratio – new ratio
L = 3/6 – 2/6 = 1/6 (sacrifice)
M = 2/6 – 2/6 = 0 (no change)
N = 1/6 – 1/6 = 0 (no change)
Only L sacrifices

 (b) Calculation of O’s capital
Total capital of the firm  on the basis of L, M and N’s capital = reciprocal of their share  x total adjusted capital
                                                                = 6/5 x (1,56,000 + 84,000 + 42,000)                                                                 = 6/5 x 2,82,000
                                                               = Rs 3,38,400