Accountancy > Accounting for Partnership Firms > Admission Of A Partner
Karan and Arjun were partners in a firm sharing profits and losses in the ratio of 3: 2. On 31st March, 2024, their Balance Sheet was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Capitals: | Machinery | 4,00,000 | |
| Karan 5,00,000 | Furniture | 2,00,000 | |
| Arjun 5,00,000 | 10,00,000 | Debtors 4,00,000 Less: Prov. 50k | 3,50,000 |
| General Reserve | 1,50,000 | Stock | 1,50,000 |
| Workmen's Comp. Fund | 1,50,000 | Cash | 2,00,000 |
| Total | 13,00,000 | Total | 13,00,000 |
On 1st April, 2024, Nakul was admitted into the partnership for share in the profits of the firm on the following terms: (i) Nakul brought ₹4,00,000 as his capital and his share of goodwill premium in cash. Goodwill of the firm was valued at ₹2,00,000. (ii) Furniture was valued at ₹2,50,000. (iii) A provision for doubtful debts @ 10% is to be maintained on debtors. (iv) The liability against Workmen's Compensation Fund was estimated at ₹1,20,000. (v) After the above adjustments, the capitals of Karan and Arjun were to be adjusted taking Nakul's capital as the base. Excess or shortage in the capital accounts of Karan and Arjun was to be adjusted by opening current accounts. Prepare Revaluation Account and Partners' Capital Accounts.
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