Following is the Balance Sheet of Abha and Binay as at 31st March, 2014: Chitra was admitted as a partner for 1/4th share in the profits of the firm. It was decided that: (a) Bad Debts amounted to ₹ 1,500 will be written off. (b) Stock worth ₹ 8,000 was taken over by Abha and Binay at Book Value in their profit-sharing ratio. The remaining stock was valued at ₹ 2,500. (c) Plant and Machinery and Goodwill were valued at ₹ 32,000 and ₹ 20,000 respectively. (d) Chitra brought her share of goodwill in cash. (e) Chitra will bring proportionate capital and the capitals of Abha and Binay will be adjusted in their profit-sharing ratio by bringing in or paying off cash as the case may be. Prepare Revaluation Account and Partners Capital Accounts.

Following is the Balance Sheet of Abha and Binay as at 31st March, 201

1.	Following is the Balance Sheet of Abha and Binay as at 31st March, 2014: Chitra was admitted as a partner for 1/4th share in the profits of the firm. It was decided that: (a) Bad Debts amounted to ₹ 1,500 will be written off. (b) Stock worth ₹ 8,000 was taken over by Abha and Binay at Book Value in their profit-sharing ratio. The remaining stock was valued at ₹ 2,500. (c) Plant and Machinery and Goodwill were valued at ₹ 32,000 and ₹ 20,000 respectively. (d) Chitra brought her share of goodwill in cash. (e) Chitra will bring proportionate capital and the capitals of Abha and Binay will be adjusted in their profit-sharing ratio by bringing in or paying off cash as the case may be. Prepare Revaluation Account and Partners Capital Accounts.
Answer» TION:WORKING Notes:Working Notes 1:Calculation of Chitra's CapitalChitra's Capital = Total Adjusted Capital of Abha and BINAY × Reciprocal of Combined Profit Share × Chitra's Profit ShareAbha's Adjusted Capital Binay's Adjusted Capital Chitra's Capital Working Notes 2Calculation of New CapitalNew Capital = Total Adjusted Capital × Respective Partner's Profit ShareAbha's New Capital = Binay's New Capital = Working Notes 3:Calculation of Chira's Share of GoodwillChitra's Share = Firms Goodwill × Chitra's Profit Share will be shared between Abha and Binay in Sacrificing ratio

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