Sushil and Sahil are partners in a firm sharing profits in the ratio of

Sushil and Sahil are partners in a firm sharing profits in the ratio of 2:3.Their

Balance Sheet as at 31st March ,2019 was as follows : 8

Liabilities Rs Assets Rs

Bank Overdraft

Salary Outstanding

Creditors

General Reserve

Capital

Sushil 80,000

Sahil 1,20,000

10,000

5,000

13,000

5,000

2,00,000

2,33,000

Cash

Debtors 48,000

Less : Provision for

DoubtfulDebts (2,000)

Stock

Prepaid Expenses

Investments

Furniture

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32,000

46,000

35,000

21,000

60,000

38,000

1,000

2,33,000

On the above date they admitted Savita as a partner for 1/4th share in the

business which she acquires equally from Sushil and Sahil Following are the

required adjustments :

(a) Savita will contribute Rs 60,000 as her share of capital and Rs 30,000

towards goodwill .

(b)Stock is overvalued by Rs 5,000.

(c) Market value of investment is Rs 54,000.

(d)Provision for doubtful debts to be maintained at 5% on debtors.

Pass necessary journal entries on Savita’s admission .​