On 31st March, 2019, the balance sheet of A and B

64 :- On 31^st March, 2019, the balance sheet of A and B who were sharing profits in the ratio of 3:2 was as follows

On 1st April, 2019, they decided to admit C as a new partner for 1/5th share in the profits on the following terms
(i) C brought Rs 1,00,000 as his capital and Rs 50,000 as his share of premium for goodwill.
(ii) Outstanding salaries of Rs 2,000 be provided for
(iii) The market value of investments was Rs 50,000.
(iv) A debtor whose dues of Rs 18,000 were written off as bad debts paid Rs 12,000 in full settlement.
Prepare Revaluation account, Partners Capital Accounts and the Balance sheet of the new firm.

Solution :-

WORKING NOTES
Calculation of share of goodwill
C’s share of premium for goodwill = Rs 50,000
A’s share = 50,000 x 3/5 = Rs 30,000
B’s share = 50,000 x 2/5 = Rs 20,000