OMTEX CLASSES: The Balance Sheet of Ramakant and Shyamkant who shared the profits in the ratio of 2:1 is as under:

Balance Sheet as on 31 st March, 2012

On 1^st April, 2012 Umakant was admitted as 1/4^th partner on the following terms:

1. He brings equipments of Rs. 80,000 as his capital.

2. Firm's Goodwill is valued at Rs. 1,44,000 and Umakant agreed to bring his share in firm's goodwill by cheque.

3. R.D.D. should be maintained at 7.5% on debtors.

4. Increase the value of livestock by Rs. 2,600 and write off loose tools by 20%.

5. Outstanding rent paid Rs. 9040 in full settlement.

Pass necessary journal entries to record the above scheme of admission.

Journal Entries in the books of New Partnership firm.

Date	Particulars	L.F.	Debit	Credit
2012 April 1.	Reserve Fund A/c ....Dr.		7200
	To Ramakant's Current A/c			4800
	To Shyamkant's Current A/c			2400
	[Being balance in Reserve Fund transferred to Partners Current A/c]
April 1.	Equipment A/c ....Dr.		80000
	To Umakant's Capital A/c			80000
	[Being Capital contributed in the form of equipment by new partner]
April 1.	Bank A/c ....Dr.		36000
	To Goodwill A/c			36000
	[Being goodwill brought in by Umakant by Cheque]
April 1.	Goodwill A/c ....Dr.		36000
	To Ramakant's Current A/c			24000
	To Shyamkant's Current A/c			12000
	[Being Goodwill credited to old partner's current A/c ]
April. 1.	Profit & Loss Adjustment A/c ....Dr.		19640
	To R.D.D.A/c			1600
	To Loose Tools A/c			18040
	[Being R.D.D. raised and Loose Tools written off by 20%]
April 1.	Outstanding Rent A/c ....Dr.		10,000
	To Bank A/c			9040
	To Profit & Loss Adjustment A/c			960
	[Being outstanding rent paid under discount]
April 1.	Livestock A/c ....Dr.		2600
	To Profit & Loss Adjustment A/c			2600
	[Being the Value of livestock increased by Rs. 2600]
April. 1	Ramkant's Current A/c ....Dr.		10720
	Shyamkant's Current A/c ....Dr.		5360
	To Profit and Loss Adjustment A/c			16080
	[Being loss on revaluation of assets and liabilities transferred to old partners' current A/c]

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