The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at 31st March, 2018 is as follows:
|
|
|
Liabilities
|
₹
|
Assets
|
₹
|
Creditors |
50,000 |
Cash at Bank |
40,000 |
Employees Provident Fund |
10,000 |
Sundry Debtors |
1,00,000 |
Profit and Loss A/c |
85,000 |
Stock |
80,000 |
Capital A/cs: |
|
Fixed Assets |
60,000 |
X |
40,000 |
|
|
|
Y
|
62,000
|
|
|
|
Z
|
33,000
|
1,35,000
|
|
|
|
2,80,000
|
|
2,80,000
|
|
|
|
|
X retired on 31st March, 2018 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively.
The other terms on retirement were:
(a) Goodwill of the firm is to be valued at ₹ 80,000.
(b) Fixed Assets are to be depreciated to ₹ 57,500.
(c) Make a Provision for Doubtful Debts at 5% on Debtors.
(d) A liability for claim , included in Creditors for ₹ 10,000 , is settled at ₹ 8,000.
The amount to be paid to X by Y and Z in such a way that their Capitals are proportionate to their profit-sharing ratio and leave a balance of ₹ 15,000 in the Bank Account.
Prepare Profit and Loss Adjustment Account and Partners' Capital Accounts.