X Y and Z were in partnership sharing profits and losses in the proportions of 3 2 1 On 1st April 20......

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Accountancy ( 12th) Retirementof a Partner Add to Study Deck

X, Y and Z were in partnership sharing profits and losses in the proportions of 3 : 2 : 1. On 1st April, 2019, Y retired from the firm. On that date, their Balance Sheet was:

Liabilities	Amount	Assets	Amount
Trade Creditors	30,000	Cash in Hand	15,000
Bills Payable	45,000	Cash at Bank	75,000
Expenses Owing	45,000	Debtors	1,50,000
General Reserve	1,35,000	Stock	1,20,000
Capital A/cs:		Factory Premises	2,25,000
X 1,50,000		Machinery	80,000
Y 1,50,000		Loose Tools	40,000
Z 1,50,000	4,50,000
	7,05,000		7,05,000

The terms were:

a Goodwill of the firm was valued at 1,35,000 and adjustment in this respect was to be made in the continuing Partners' Capital Accounts without raising Goodwill Account.

b Expenses Owing to be brought down to 37,500.

c Machinery and Loose Tools are to be valued @ 10% less than their book value.

d Factory Premises are to be revalued at 2,43,000.

Show Revaluation Account, Partners' Capital Accounts and prepare the Balance Sheet of the firm after the retirement of Y.

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