X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2009, Y retires from the firm. X and Z agree that the capital of the new firm shall be fixed at ₹ 2,10,000 in the profit-sharing ratio. The Capital Accounts of X and Z after all adjustments on the date of retirement showed balance of ₹ 1,45,000 and ₹ 63,000 respectively. State the amount of actual cash to be brought in or to be paid to the partners.

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Solution

Old Ratio (X, Y, and Z) = 3 : 2 : 1

Y retires from the firm.

∴New Ratio (X and Z) = 3 : 1

Total capital of the New Firm = Rs 2,10,000

Ascertainment of Actual Cash to be brought in or to be paid to the partners

Particulars

X

Z

New Capital

1,57,500

52,500

Existing Capital

1,45,000

63,000

Cash Paid/Brought in

(12,500)

(Brought in)

10,500

(Paid)

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Q. X, Y and Z are partners sharing profits in the ratio of 5 : 3 : 2 . Y retires on 1st April , 2018 from the firm , on which date capitals of X, Y and Z after all adjustments are ₹ 1,03,680 , ₹ 87,840 and ₹ 26,880 respectively. The Cash and Bank Balance on that date was ₹ 9,600. Y is to be paid through amount brought in by X and Z in such a way as to make their capitals proportionate to their new profit-sharing ratio which will be X 3/5 and Z 2/5. Calculate the amount to be paid or to be brought in by the continuing partners assuming that a minimum Cash and Bank Balance of ₹ 7,200 was to be maintained and pass the necessary journal entries .

(a) X, Y and Z are partners in a firm sharing profits in the ratio 3 : 2 : 1. On 1st March, 2015, X retires from the firm. Y and Z agreed that the capital of the new firm shall be fixed at Rs 2,10,000 in the profit sharing ratio. The capital accounts of Y and Z after all adjustments on the date of retirement showed balance of Rs 1,45,000 and Rs 63,000 respectively, State the amount of actual cash to be brought in or to be paid to the partners.

(b) A, B and C are partners in a firm whose books are closed on 31st March each year. A died on 30th June, 2009 and according to the agreement, the share of profits of a deceased partner up to the date of the death is to be calculated on the basis of the average profit for the five years. The net profits for the last 5 years have been : 2005 - Rs 14,000; 2006 - Rs 18,000; 2007 - Rs 16,000; 2008 - Rs 10,000 (loss) and 2009 - Rs 16,000.

Calculate A's share of the profits up to the date of death and pass necessary Journal entry.

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Liabilities and Capital		₹	Assets	₹
Sundry Creditors		39,750	Bank (Minimum Balance)	15,000
Employees' Provident Fund		5,250	Debtors	97,500
Workmen Compensation Reserve		22,500	Stock	82,500
Capital A/cs:			Fixed Assets	1,87,500
X	1,65,000
Y	84,000
Z	66,000	3,15,000
		3,82,500		3,82,500

Y retired on 1st April, 2019 and it was agreed that:

(i) Goodwill of the firm is valued at ₹ 1,12,500 and Y' s share of it be adjusted into the accounts of X and Z who are going to share future profits in the ratio of 3 : 2.

(ii) Fixed Assets be appreciated by 20%.

(iii) Stock be reduced to ₹ 75,000.

(iv) Y be paid amount brought in by X and Z so as to make their capitals proportionate to their new profit-sharing ratio.

Prepare Revaluation Account, Capital Accounts of all partners and the Balance Sheet of the New Firm.

Q. X, Y and Z were in partnership sharing profits and losses in the proportions of 3 : 2 : 1 . On 1st April, 2018 Y retires from the firm. On that date, their Balance Sheet was:



Liabilities		₹	Assets	₹
Trade Creditors		3,000	Cash in Hand	1,500
Bills Payable		4,500	Cash at Bank	7,500
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(b) Expenses Owing to be brought down to ₹ 3,750.
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Particulars	X	Z
New Capital	1,57,500	52,500
Existing Capital	1,45,000	63,000
Cash Paid/Brought in	(12,500) (Brought in)	10,500 (Paid)