Vrushali and Leena are equal partners in the business. Their Balance Sheet as on 31 March 2018 stood as under.

6. Vrushali and Leena are equal partners in the business. Their Balance Sheet as on 31 March 2018 stood as under. 

Balance Sheet as on 31 March 2018

Cr.                                                                                                                               Dr.

Liabilities	Amount	Amount	Assets	Amount	Amount
Sundry creditors		90,000	Cash in Bank		62,000
Capitals:			Debtors	31,000
Vrushali	45,000		(-) R.D.D.	1,000	30,000
Leena	30,000	75,000	Building		55,000
General reserves		18,000	Machinery		24,000
			Bill receivable		12,000
		1,83,000			1,83,000

They Decided to admit Aparna on 1st April 2018 on the following terms:

1. The Machine and Building be depreciated by 10%. Reserve for doubtful debts to be increased by ₹5,000

2. Bills receviable are taken over by Vrushali at the discount of 10%

3. Aparna sholu bring 460,000 as capital for her 1/4th share in future profits

4. The Capital accounts of all the partners be adjusted in proportion in the new profit sharing ratio by opening current account of the partners.

Prepare Profit and Loss Adjustments A/c, Partner;s cpital A/c, Balance Sheet of the new firm.

Solution:
In th Books of Vrushali, Leena and Aparna Partnership Firm

Revaluation Account 

Dr.                                                                                                                                 Cr.

Particulars	Amount	Particulars	Amount
To R.D.D.	5,000
To Building	5,500
Top Machinery	24,00
To Bill Receivable	1,200	By Loss	14,100
	14,100		14,100

Partner's Capital Account

Dr.                                                                                                                                   Cr.

Particulars	Vrushali	Leena	Aparna	Particulars	Vrushali	Leena	Aparna
To Bills receivable	10,800			By Balance	45,000	30,000
To loss on revaluation	7050	7,050		By General Reserve	9,000	9,000
To Balance	90,000	90,000	60,000	By Balance			60,000
				By Current A/c	53,850	58,050
	1,07,850	97,050	60,000		1,07,850	97,050	60,000

Balance Sheet as on 01.04.2019

Dr.                                                                                                                             Cr.

Liabilities	Amount	Amount	Assets	Amount	Amount
Capital A/c:			Debtors	31,000
Vrushali	90,000		(-) R.D.D.	1,000
			(+) R.D.D.	5,000	25,000
Leena	90,000		Building	55,000
Aparna	60,000	2,40,000	(-) Depreciation	5,500	49,500
Current A/c:			Machinery	24,000
Vrushali	53,850		(-) Depreciation	2,400	21,600
Leena	58,050	1,11,900	Bills Receivable	12,000
			(-) Take Over at 10% Dis.	12,000	-- ------
Creditors		90,000	Cash at Bank		1,22,000
		3,30,000			3,30,000

Working Note:

Cash/Bank Account

Dr.                                                                                                                      Cr.

Particulars	Amount	Particulars	Amount
To Balance b/d	62,000
To Aparna capital A/c	60,000	By Balance	1,22,000
	1,22,000		1,22,000

✱ Calculation of ratio

Remaining share = 1 - share of new partner 

= 1 - 1/4 

=3/4

New Ratio = old ratio * remaining share

Vrushali = 1/2 * 3/ = 3/8

Leena = 1/2 * 3/4 = 3/8

Total Capital = Capital of new partner * reciprocal of his share

=60,000 * 4/1 

= 2,40,000

Vrushali = 2,40,000 * 3/8 = 90,000

Leena = 2,40,000 * 3/8 = 90,000

Aparna = 2,40,000 * 2/8 = 60,000