Amalendu and Sameer share profits and losses in the ratio 3:2 respectively Their Balance Sheet as on 31st march 2017 was as under.

2. Amalendu and Sameer share profits and losses in the ratio 3:2 respectively Their Balance Sheet as on 31st march 2017 was as under. 

 Balance Sheet as on 31st march, 2017

Liabilities	Amount	Assets	Amount
Sundry Creditors	10,000	Cash at bank	12,000
Amalendu capital	60,000	Sundry debtors	24,000
Sameer capital	40,000	Land & Building	50,000
General reserve	20,000	Stock	16,000
		Plant and Machinery	20,000
		Furniture & Fixture	8,000
	1,30,000		1,30,000

On 1st April 2017 they admit Paresh into partnership. The term being that:

1. He Shall pay 416,000 as his share of goodwill 50% amount of goodwill shall be withdrawn by the old partners.

2. He shall have to bring 420,000 as his capital for 1/4 share in future profits.

3. For the purpose of Paresh's admission it was agreed that the assets would be revalued as follows.

A) Land and Building is to be valued at ₹60,000.

B) Plant and Machinery to be valued at ₹16,000

C) Stock Valued at ₹20,000 and Furniture and fixture at ₹4,000.

D) A provision of 5% on debtors would be made for Doubtful Debts.

Pass The Necessary Journal Entries in the Books od a New Firm.

Solution:
In the Books Of New Firm.

Date	Particulars	L/f	Debit ₹	Credit ₹
1.	General Reserve A/c Dr.  To Amalendu A/c   To Sameer A/c  [Being undistributed Profit distributed among’s the Partners]		20,000	12,000  8,000
2.	Cash A/c Dr.  To Paresh Capital A/c  [Being Capital Bought by New Partner in cash]		20,000	20,000
3.	Cash A/c Dr.  To Goodwill A/c  [Being Goodwill bought in Cash]		16,000	16,000
4.	Goodwill A/c Dr.  To Amlendu A/c  To Sameer A/c  [Being 50% Goodwill Amount distributed in Sacrifice ratio to old partners]		16,000	6,400  9,600
5.	Amlendu A/c Dr.  Sameer A/c Dr.  To Goodwill A/c  [Being Half amount of Goodwill withdrawn]		3,200  4,800	8,000
6.	Revaluation A/c Dr.  To Plant & machinery  To Furniture & Fixture  To R.D.D.  [Being Assest are Revalued]		9,200	4,000  4,000  1,200
7.	Land & Building Dr.  Stock Dr.  To Revaluation A/c  [Being Assets are Revalued]		10,000  4,000	14,000