Lalit, Pankaj and Rahul are partners sharing profits in the ratio of 4:3:3. After all adjustments, on Lalit's retirement with respect to general reserve, goodwill and revaluation etc., the balances in their capital accounts stood at Rs. 70,000, Rs. 60,000 and Rs. 50,000 respectively. It was decided that the amount payable to Lalit will be brought by Pankaj and Rahul in such a way as to make their capitals proportionate to their profit sharing ratio. After Lalit's retirement, the new profit sharing ratio between Pankaj and Rahul is 1:1. New Capital of the firm will be-

Rs. 1,80,000

The correct answer is Option (1) → Rs. 1,80,000

a. Calculation of total capital of the new firm

Balance in Pankaj’s Capital account (after adjustment) = 60,000 (i)

Balance in Rahul’s Capital account (after adjustment) = 50,000 (ii)

Amount payable to Lalit (Retiring partner)                  = 70,000  (iii)

Total capital of new firm (i) + (ii) + (iii)               =1,80,000

b. Calculation of new capitals of the continuing partners

Pankaj’s New Capital = Rs. 1,80,000 * 1/2 = 90,000

Rahul’s New Capital = Rs. 1,80,000* 1/ 2  = 90,000

c. Calculation of the amounts to be brought in or withdrawn by the continuing partners