Answer the question.

Solution :-

Revaluation Account

Particulars	Amount	Particulars	Amount
Stock (2,000 – 400)	1,600	Prepaid Insurance	600
Bank (charges)	200	Loss transferred to: A's Capital A/c: 3,000 B's Capital A/c: 2,000	5,000
Building	3,000
Creditors	800
	5,600		5,600

Partner's Capital A/c

Particulars	A	B	C	Particulars	A	B	C
To Revaluation A/c (loss)	3,000	2,000		By Balance b/d	60,000	40,000
To Balance c/d	63,000	42,000	30,000	By bank A/c			30,000
				By Premium for Goodwill A/c	6,000	4,000
	66,000	44,000	30,000		66,000	44,000	30,000

Balance Sheet as on 1st April,2020

Particulars	Amount	Particulars	Amount
Capital A/c:- A's A/c: 63,000 B's A/c: 42,000 C's A/c: 30,000	1,35,000	Building A/c (50,000 - 3,000)	47,500
Creditors (20,000 + 800)	20,800	Plant and Machinery	30,000
		Stock (20,000 - 1,600)	18,400
		Debtors	10,000
		Bank	49,800
		Prepaid Insurance	600
	1,55,800		1,55,800

Bank Account

Particulars	Amount	Particulars	Amount
To Balance b/d	10,000	By Revaluation A/c (Bank charges)	200
To C's Capital A/c	30,000	By Balance c/d	49,800
To Premium for Goodwill A/c	10,000
	50,000		50,000

Working Notes :-
1) The sacrificing ratio of partners would be their old ratio i.e., 3:2.
2) Distribution of Premium for Goodwill :-
A will get = 10,000 x 3/5 = 6,000
B will get = 10,000 x 2/5 = 4,000