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1. The following is the Balance Sheet of Hari and Lal Business Links sharing P&L in the ration of 5:4 as on 31^st March 2009.

Liabilities	Amount	Assets	Amount
Bills Payable Sundry Creditors Reserve Capitals: Hari 25,000 Lal 20,000	5000 30,000 45,000	Cash at Bank Sundry Debtors 22,000 Less: Prov: for bad debts 2,000 Stock Machinery Furniture	1,500 20,000 30,000 20,000 8,500
	80,000		80,000

As on the date of Balance Sheet Bal is admitted to the business for 2/9^th share. On admitting Bal following were agreed up on:

1. Bal should bring 35,000 for capital and his share of goodwill in cash.

2. The total value of goodwill of the firm being fixed at Rs. 27,000.

3. Provision for bad and doubtful debts should be increased to Rs. 3,500.

4. Furniture appreciated by 10% and Machinery depreciated by 5%

5. Creditors should be reduced by 10%

6. Pre-paid insurance of Rs.2000 should be recorded in the books.

7. New profit sharing ratio between Hari, Lal and Bal should be 4:3:2.

Prepare necessary ledger accounts and also draw the new balance sheet.

2. The following is the Balance Sheet of Kiran and Karun sharing P&L in the ration of 3:2 as on 31^st December 2008.

Liabilities	Amount	Assets	Amount
Accounts Payable Bank Loan Reserve Capitals: Kiran 50,000 Karun 30,000	25000 24,000 80,000	Cash at Hand Cash at Bank Sundry Debtors Stock Machinery Profit &Loss	2,500 15,000 35,000 37,000 32,000 7,500
	1,29,000		1,29,000

They admit Varun in to the business on the following terms:

1. Varun should bring 40,000 as his capital and his proportional share of goodwill in cash.

2. Value of goodwill of the firm at Rs. 20,000.

3. Debtors include a bad debts of Rs.5000 and should be written off from the firm,s book.

4. Stock should be reduced by Rs.3000

5. Depreciate Machinery by 20%

6. New profit sharing ratio between Kiran, Karun and Varun should be 2:2:1.

Prepare Profit & Loss Adjustment a/c, Capital a/c and new balance sheet.

qusetion: Admission of a Partner--- Goodwill Case 2