A, B, C and D were in partnership sharing profits and losses as 4 : 3 : 2 : 1 respectively. The following is their Balance Sheet as on 31.12.2017 :

On the above date, B retired and the amount due to him was paid by the other partners in their profit-sharing ratio. It was agreed as among A, C and D that they should share in future as 3 : 3 : 2. E was then admitted as a partner on his bringing in ₹60,000 as capital and ₹20,000 as goodwill for 1/5th share in the future profits.

Show the Journal Entries for the above transactions and prepare the Balance Sheet of A, C, D and E after E’s admission.

Transcribed Image Text:

Capital Account -- A Capital Account-B Capital Account -- C Capital Account --D Trade Creditors Liabilities ₹ 50,000 Furniture 70,000 Stock 60,000 Debtors 20,000 Bills Receivable 50,000 Profit & Loss A/c 2,50,000 Assets ₹ 40,000 20,000 1,50,000 30,000 10,000 2,50,000