X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Balance Sheet of the firm as at 31st March, 2022 was as follows:
X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Balance Sheet of the firm as at 31st March, 2022 was as follows:
| Liabilities | ₹ | Assets | ₹ | |
| Creditors
Workmen Compensation Reserve Investments Fluctuation Reserve Capital A/cs: X Y Z |
21,000 12,000 6,000 68,000 32,000 21,000 |
Cash at Bank
Debtors Stock Investment (Market Value ₹ 17,600) Patents Machinery Goodwill Advertisement Suspense |
40,000
|
5,750 38,000 30,000 15,000 10,000 50,000 6,000 5,250 |
| 1,60,000 | 1,60,000 |
Z retired on 1st April, 2022 on the following terms:
a) Goodwill of the firm is to be valued at ₹ 34,800.
b) Value of Patents is to be reduced by 20% and that of machinery to 90%.
c) Provision for Doubtful Debts is to be @6% on debtors.
d) Z took the investment at market value.
e) Liability for Workmen Compensation to the extent of ₹ 750 is to be created.
f) A liability of ₹ 4,000 included in creditors is not to be paid.
g) Amount due to Z to be paid as follows:
₹ 5,067 immediately, 50% of the balance within one year and the balance by a draft for 3 months.
Give necessary Journal entries for the treatment of goodwill, prepare Revaluation Account, Capital Accounts and the Balance Sheet of the new firm.
Anurag Pathak Changed status to publish June 22, 2023
