Balance Sheet of Xavier, Yusuf and Zaman who were sharing profits in the ratio of 4 : 3 : 2 stood as follows as at 31st March, 2023
Balance Sheet of Xavier, Yusuf and Zaman who were sharing profits in the ratio of 4 : 3 : 2 stood as follows as at 31st March, 2023:
| Liabilities | ₹ | Assets |  | ₹ |
|
Sundry Creditors Workmen Compensation Reserve Capital A/cs: Xavier Yusuf Zaman |
41,400 9,000
1,20,000 90,000 60,000 |
Cash at Bank Sundry Debtors Less: PDD Stock Plant and Machinery Land and Building Advertisement Expenditure |
30,450 1,050 |
33,000
29,400 48,000 51,000 1,50,000 9,000 |
| Â | 3,20,400 | Â | Â | 3,20,400 |
Yusuf retired from the firm on 1st April, 2023 and following adjustments in the books of the firm were agreed upon:
(i) That Land and Building be appreciated by 10%.
(ii) Provision for Doubtful Debts is no longer necessary.
(iii) Stock be appreciated by 20%.
(iv) Adjustment be made in the accounts to rectify a mistake previously made whereby Yusuf was credited in excess by ₹ 8,100 while Xavier and Zaman were debited in excess by ₹ 4,200 and by ₹ 3,900 respectively.
(v) Goodwill of the firm be valued at ₹ 54,000 and Yusuf’s share is to be adjusted in the Capital Accounts of Xavier and Zaman who are going to share future profits in the ratio of 2 : 1.
(vi) Capital of the firm, as newly constituted, will be readjusted by bringing in or paying cash so that the future capitals of Xavier and Zaman be in the ratio of 2 : 1.
Pass Journal entries and prepare Balance Sheet of the new firm showing Yusuf’s balance as loan.
Anurag Pathak Changed status to publish March 3, 2024
