Manish and Nitin are partners in a firm sharing Profits and Losses in the ratio of 3:1. Their Balance Sheet as on 31st March, 2012 was as follows:

Manish and Nitin are partners in a firm sharing Profits and Losses in the ratio of 3:1. Their Balance Sheet as on 31st March, 2012 was as follows:

Balance Sheet as on 31.03.2012

Liabilities	Rs.	Assets	Rs.
Manish's Capital	30000	Cash in Hand	2500
Nitin's Capital	16000	Bills Receivable	6000
Creditors	18000	Debtors	16000
Bills Payable	3000	Stock	20000
General Reserve	4000	Furniture	1500
		Land and Building	25000
	71000		71000

Sachin is admitted as a partner in the firm on 1st April, 2012 on the following terms:

1. Sachin is to pay Rs. 20,000 as capital for 1/5 th share in future profit and he should bring Rs. 4000 for goodwill.

2. Stock and Furniture to be reduced by 10%.

3. R.D.D. is to be made at 5% on the debtors.

4. Land and Building is to be appreciated by 20%.

You are required to prepare Profit and Loss Adjustment A/c, partner's Capital Accounts and Balance Sheet of the new firm.

Ans. Profit and Loss Adjustment A/c = Profit Rs. 2050

Balance Sheet total = Rs. 97050

Cash A/c Bal. 25600

Capital A/c : Manish = Rs. 37538

Nitin = Rs. 18512

Sachin =  Rs. 20000