Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2018 was:
They decide to admit Rohan to a 1/3rd share upon the terms that he is to pay into the business Rs. 1,000 as Goodwill and sufficient Capital to give him a 1/3rd share of the total capital of the new firm. It was agreed that the Provision for Doubtful Debts be reduced to Rs. 100 and the Stock be revalued at Rs. 2,000 and that the Plant be reduced to Rs. 500. You are required to record the above in the Ledger of the firm and show Balance Sheet of the new partnership.
