Accountancy > Accounting For Partnership Firms > Admission Of A Partner
(a) Kishore and Ranjan were partners in a firm sharing profits and losses in the ratio of 3: 2. On 1st April, 2024, their Balance Sheet was as follows:
| Liabilities | Amount (₹) | Assets | Amount (₹) |
|---|---|---|---|
| Sundry Creditors | 1,80,000 | Cash in hand | 30,000 |
| General Reserve | 20,000 | Debtors | 1,20,000 |
| Capitals: | Stock | 1,50,000 | |
| Kishore 6,00,000 | Furniture | 1,00,000 | |
| Ranjan 4,00,000 | 10,00,000 | Land and Building | 8,00,000 |
| Total | 12,00,000 | Total | 12,00,000 |
On the above date, Singh was admitted as a new partner on the following terms:
(i) Singh will bring ₹1,50,000 as his capital and ₹50,000 as his share of goodwill premium.
(ii) The value of stock will be reduced by 10% and Land and Building will be appreciated by 10%.
(iii) Furniture will be revalued at ₹90,000.
(iv) A provision for doubtful debts will be created on sundry debtors at 5%.
(v) Investments worth ₹10,000 not mentioned in the Balance Sheet will be taken into account.
(vi) A creditor of ₹1,000 is not likely to claim his money and is to be written off.
Pass necessary journal entries for the above transactions in the books of the firm on Singh's admission.
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