| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Creditors | | 9,000 | Land and Buildings | 24,000 |
| Bills Payable | | 3,000 | Furniture | 3,500 |
| Capital Accounts | | | Stock | 14,000 |
| | Arun | 19,000 | | Debtors | 12,600 |
| | Bablu | 16,000 | | Cash | 900 |
| | Chetan | 8,000 | 43,000 | | |
| | | 55,000 | | 55,000 |
| | | | | |
They agreed to take Deepak into partnership and give him a share of 1/8 on the following terms:
(a) That Deepak should bring in ₹ 4,200 as goodwill and ₹ 7,000 as his Capital;
(b) That furniture be depreciated by 12%;
(c) That stock be depreciated by 10%;
(d) That a Reserve of 5% be created for doubtful debts;
(e) That the value of land and buildings having appreciated be brought up to ₹ 31,000;
(f) That after making the adjustments the capital accounts of the old partners (who continue to share in the same proportion as before) be adjusted on the basis of the proportion of Deepak’s Capital to his share in the business, i.e., actual cash to be paid off to, or brought in by the old partners as the case may be.
Prepare Cash Account, Profit and Loss Adjustment Account (Revaluation Account) and the Opening Balance Sheet of the new firm.