Ashok, Bhim and Chetan were partners in a firm sharing profits in the ratio of 3:2:1. Their balance sheet as on 31st March 2019 was as follows:
Ashok, Bhim and Chetan decided to share the future profits equally w.e.f. 1st April 2019, for this, it was agreed that:
Goodwill of the firm is valued at Rs. 300,000.
Land is revalued at Rs. 160,000 and building be depreciated by 6%.
Creditors of Rs. 12,000 were not likely to be claimed and hence, be written off.
Prepare revaluation account, partner’s capital account and balance sheet of the reconstituted firm.