| Balance Sheet of A and B as on December 31, 2016 |
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Bills Payable | | 10,000 | Cash in Hand | 10,000 |
| Creditors | | 58,000 | Cash at Bank | 40,000 |
| Outstanding | | 2,000 | Sundry Debtors | 60,000 |
| Expenses | | | Stock | 40,000 |
| Capitals: | | | Plant | 1,00,000 |
| | A | 1,80,000 | | Buildings | 1,50,000 |
| | B | 1,50,000 | 3,30,000 | | |
| | | | 4,00,000 | | 4,00,000 |
| | | | | | |
C is admitted as a partner on the date of the balance sheet on the following terms:
(i) C will bring in ₹ 1, 00,000 as his capital and ₹ 60,000 as his share of goodwill for 1/4 share in the profits.
(ii) Plant is to be appreciated to ₹ 1, 20,000 and the value of buildings is to be appreciated by 10%.
(iii) Stock is found over valued by ₹ 4,000.
(iv) A provision for bad and doubtful debts is to be created at 5% of debtors.
(v) Creditors were unrecorded to the extent of ₹ 1,000.
Pass the necessary journal entries, prepare the revaluation account and partners’ capital accounts, and show the Balance Sheet after the admission of C.