Ram and Madan were Partners sharing profits and Losses equally.

3. In the books of Partnership Firm

Profit and Loss Adjustment Account

Particulars	Amount	Amount	Particulars	Amount	Amount
To Furniture A/c (Depreciation)		1500	By Stock A/c (Appreciation in Value)		2500
To partners’ Capital Account.(Profit)
Ram	500
Madan	500	1000
		2500			2500

Partners Capital Accounts

Particulars	Ram	Madan	Sohan	Particualrs	Ram	Madan	Sohan
To Goodwill A/c	10000	10000	10000	By Balance b/d	100000	100000
				By General Reserves A/c	20000	20000	-
				By Bank A/c (Capital Contribution)	-	-	100000
				By Goodwill A/c	15000	15000
				By Profit & Loss Adj. A/c (Profit)	500	500
To Balance C/d	125500	125500	90000
	135500	135500	100000		135500	135500	100000

Balance Sheet as on 1st April, 2012

Liabilities	Amount	Amount	Assets	Amount	Amount
Sundry Creditors		55300	Plant  & Machinery		90000
Partners’ Capital A/c			Furniture:	15000
Ram	125500		Less: Depreciation @10%	1500	13500
Madan	125500		Sundry Debtors		91000
Sohan	90000	341000	Stock	68000
			Add: Increase in value	2500	70500
			Cash in Hand		4200
			Cash at Bank		127100
		396300			396300

Goodwill A/c

Particulars	Amount	Amount	Particulars	Amount	Amount
To Ram’s Capital A/c		15000	By Ram’s Capital A/c		10000
To Madan’s Capital A/c		15000	By Madan’s Capital A/c		10000
			By Shohan’s Capital A/c		10000
		30000			30000

Bank A/c

Particulars	Amount	Amount	Particulars	Amount	Amount
To Balance b/d		27100
To Sohan’s Capital A/c		100000	By Balance C/d		127100
		127100			127100