Pankaj, Naresh and Saurabh are partners sharing profits in the ratio of 3:2:1. Naresh retired from the firm due to his illness. On that date the Balance Sheet of the firm was as follows:

Books of Pankaj, Naresh and Saurabh
Balance Sheet as on March 31, 2007
Liabilities	Amount Rs	Assets	Amount Rs
General Reserve	12,000	Bank	7,600
Sundry Creditors	15,000	Debtors	6,000
Bills Payable	12,000	Less: Provision for Doubtful Debt	(400)	5,600
Outstanding Salary	2,200
Provision for Legal Damages	6,000	Stock	9,000
Capitals:		Furniture	41,000
Pankaj	46,000		Premises	80,000
Naresh	30,000
Saurabh	20,000	96,000
	1,43,200		1,43,200

Additional Information

(i) Premises have appreciated by 20%, stock depreciated by 10% and provision for doubtful debts was to be made 5% on debtors. Further, provision for legal damages is to be made for Rs 1,200 and furniture to be brought up to Rs 45,000*.

(The amount of Rs 450 that is being given in the book for furniture is a mistake, as it should be Rs 45,000)

(ii) Goodwill of the firm be valued at Rs 42,000.

(iii) Rs 26,000 from Naresh’s Capital account be transferred to his loan account and balance be paid through bank; if required, necessary loan may be obtained from Bank.

(iv) New profit sharing ratio of Pankaj and Saurabh is decided to be 5:1.

Give the necessary ledger accounts and balance sheet of the firm after Naresh’s retirement.