The Balance Sheet of X, Y and Z who share profits and losses in the ratio of 3 : 2 : 1, as o 1st April, 2018 is as follows:
On the above date, W is admitted as a partner on the following terms:
a) W will bring Rs. 50,000 as his capital and get 1/6th share in the profits.
(b) He will bring necessary amount for his share of goodwill premium. Goodwill of the firm is valued at Rs. 90,000.
(c) New profit-sharing ratio will be 2 : 2 : 1 : 1.
(d) A liability of Rs. 7,004 will be created against bills receivable discounted earlier but now dishonored.
(e) The value of stock, furniture and investments is reduced by 20%, whereas the value of Land and Building and Plant and Machinery will be appreciated by 20% and 10% respectively.
(f) Capital Accounts of the partners will be adjusted on the basis of W’s Capital through their Current Accounts. Prepare Revaluation Account, Partners Current Accounts and Capitals Accounts.
