A and B sharing benefits in extent of three-fourth and one-fourth demonstrated the accompanying as their Balance Sheet as on 31st March, 2011:
They concede C into organization on 1st April, 2011 on the accompanying terms:
(1) That C pays Rs. 10,000 as his capital for a fifth offer later on benefits.
(2) That goodwill of the new firm is esteemed at Rs. 20,000 and C brings his offer of goodwill in real money.
(3) That a stock and furniture be lessened by 10% and a 5% procurement for far fetched obligations is made on borrowers.
(4) That the estimation of area and structures be increased in value by 20%.
(5) That the capital records of the considerable number of accomplices be re-balanced on the premise of their benefits sharing courses of action and any extra sum be instantly withdrawn by them.
Pass the diary sections; set up the Profit and Loss Adjustment Account (Revaluation Account) Partners' Capital Accounts and the Opening Balance Sheet of the new firm.