X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Y retires selling his share to X and Z for ₹ 1,60,000, ₹ 1,00,000 being paid by X and ₹ 60,000 by Z

X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Y retires selling his share to X and Z for ₹ 1,60,000, ₹ 1,00,000 being paid by X and ₹ 60,000 by Z. The profit for the year after Y’s retirement is ₹ 2,40,000.

Pass entries to (a) record the sale of Y’s share to X and Z, and (b) distribute the profit between X and Z.

[Ans. New Profit sharing ratio 17 : 7.]