The Balance Sheet of A, B and C who were sharing the profits in proportion to their capitals stood as on March 31, 2007.
| Liabilities |
Rs.Amt. |
Assets |
Rs.Amt. |
| Bills payable |
6,250 |
Land and building
Debtors 10,500
(-) provision for bad debts 500
|
12,000
|
| sundry creditors |
10,000 |
|
10,000 |
| Reserve fund |
2,750 |
Bill Receivables |
7,000 |
capitals
A 20,000
B 15,000
C 15,000 |
50,000 |
stock
plant and machinery
cash at Bank |
15,500
11,500
13.000
|
|
69,000 |
|
69,000 |
B retired on the date of Balance Sheet and the following adjustments were to be made
(a) Stock was depreciated by 10%.
(b) Factory building was appreciated by 12%. (c) Provision for doubtful debts to be created up to 5%.
(d) Provision for legal charges to be made at Rs. 265.
(e) The goodwill of the firm to be fixed at Rs. 10,000.
(f) The capital of the new firm to be fixed at Rs. 30,000. The continuing partners decide to keep their capitals in the new profit sharing ratio of 3:2.
Work out the final balances in capital accounts of the firm and the amount to bh brought in and/or withdrawn by A and C to make their capitals proportionate to then new profit sharing ratio.
