Sunu and Jinu are partners in a firm sharing profits and losses equally. The following is their Balance Sheet as on 31.12.2005.
On the balance sheet date Tinu is admitted into the partnership on the following terms.
1. Tinu should bring in Rs. 60,000 as his capital
2. Furniture should be revalued at Rs. 50,000 and machinery at 25% less.
3. Bank overdraft should be decreased to Rs. 75,000
4. A provision of 10% is to be made for bad debts.
5. An unrecorded liability of Rs. 5,000 on rent is to be recorded.
Give journal entries, prepare revaluation account, capital accounts of partners and the Balance Sheet after Tinu’s admission.
