The Balance Sheet of X Y and Z who were sharing profits in ratio of their capitals stood as follows ...........

Accountancy ( 12th) Retirementof a Partner

The Balance Sheet of X, Y and Z who were sharing profits in ratio of their capitals stood as follows at 31st March, 2019:

Liabilities	Amount	Assets		Amount
Sundry Creditors	13,800	Cash at Bank		11,000
Capital A/cs:		Sundry Debtors	10,000
X 45,000		Less: Provision for Doubtful Debts	200	9,800
Y 30,000		Stock		16,000
Z 15,000	90,000	Plant and Machinery		17,000
		Land and Building		50,000
	1,03,800			1,03,800

Y retired on 1st April, 2019 and the following terms:

a Out of the insurance premium debited to Profit and Loss Account, 1,500 to be carried forward as Prepaid Insurance.

b Provision for Doubtful Debts to be brought up to 5% of Sundry Debtors.

c Land and Building to be appreciated by 20%.

d A provision of 4,000 be made in respect of outstanding bills for repairs.

e Goodwill of the firm was determined at 21,600.

Y's share of goodwill be adjusted to that of X and Z who will share profits in future in the ratio of 3 : 1. Pass necessary Journal entries and give the Balance Sheet after Y's retirement.

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