The following is the Balance Sheet of A, B and C as on 1.1.2018:

The partners share profits in the ratio of 2 : 2 : 1, but, on the above date, they have decided to change that to 2 : 1 : 1.
The following adjustments are required :

(a) The value of the land is ₹15,000.

(b) The value of machinery and furniture are to be increased by ₹15,000 and ₹5,000 respectively.

(c) The value of stock and debtors are to be decreased by ₹3,000 and ₹2,000 respectively.

(d) The capitals of the partners are to be adjusted according to the new profit-sharing ratio. For that, necessary capital to be brought-in or excess capital to be writhdrawn. No reserve will be shown in the new Balance Sheet. Prepare necessary Ledger Accounts and re-draft the Balance Sheet.

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Liabilities Capital Accounts: A B C Reserve Creditors Bills Payable ₹ 40,000 Land 20,000 Building 20,000 Machinery 20,000 Furniture 15,000 Stock 15,000 Debtors Bank 1,30,000 Assets 10,000 50,000 40,000 10,000 5,000 5,000 10,000 1,30,000