The Balance Sheet of X, Y and Z who were sharing profits in the ratio

1.	The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at March 31, 2007 : Capital and LiabilitiesRsAssetsRsCreditors50,000Cash at Bank40,000 Employee's Provident Fund10,000Sundry Debtors1,00,000Profit&Loss A/c85,000Stock80,000Capital A/cs:Fixed Assets60,000X40,000Y62,000Z33,000––––––––1,35,000––––––––––2,80,000––––––––––––––––––––2,80,000–––––––––––––––––––– X retired on March 31, 2007 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively. The other terms on retirement were as follows : (i) Goodwill of the firm is to be valued at Rs 80,000. (ii) Fixed Assets are to be depreciated to Rs 57,500. (iii) Make a provision for doubtful debts at 5% on debtors. (iv) A liability for claim, included in creditors for Rs 10,000, is settled and paid at Rs 8,000. Prepare Revaluation Account and Partner's Capital Accounts.
Answer» The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at March 31, 2007 : $\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 50, 000 & Cash at Bank & 40, 000 Employee's Provident Fund & 10, 000 & Sundry Debtors & 1, 00, 000 Profit & Loss A/c & 85, 000 & Stock & 80, 000 Capital A/cs : & Fixed Assets & 60, 000 X & 40, 000 Y & 62, 000 Z & 33, 000 - ------ - & 1, 35, 000 - -------- - 2, 80, 000 - -------- - - -------- - & 2, 80, 000 - -------- - - -------- - \end{matrix}$ X retired on March 31, 2007 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively. The other terms on retirement were as follows : (i) Goodwill of the firm is to be valued at Rs 80,000. (ii) Fixed Assets are to be depreciated to Rs 57,500. (iii) Make a provision for doubtful debts at 5% on debtors. (iv) A liability for claim, included in creditors for Rs 10,000, is settled and paid at Rs 8,000. Prepare Revaluation Account and Partner's Capital Accounts.

The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at March 31, 2007 : Capital and LiabilitiesRsAssetsRsCreditors50,000Cash at Bank40,000 Employee's Provident Fund10,000Sundry Debtors1,00,000Profit&Loss A/c85,000Stock80,000Capital A/cs:Fixed Assets60,000X40,000Y62,000Z33,000––––––––1,35,000––––––––––2,80,000––––––––––––––––––––2,80,000–––––––––––––––––––– X retired on March 31, 2007 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively. The other terms on retirement were as follows : (i) Goodwill of the firm is to be valued at Rs 80,000. (ii) Fixed Assets are to be depreciated to Rs 57,500. (iii) Make a provision for doubtful debts at 5% on debtors. (iv) A liability for claim, included in creditors for Rs 10,000, is settled and paid at Rs 8,000. Prepare Revaluation Account and Partner's Capital Accounts.

Answer»

The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at March 31, 2007 :

$\begin{matrix} Capital and Liabilities & Rs & Assets & Rs Creditors & 50, 000 & Cash at Bank & 40, 000 Employee's Provident Fund & 10, 000 & Sundry Debtors & 1, 00, 000 Profit & Loss A/c & 85, 000 & Stock & 80, 000 Capital A/cs : & Fixed Assets & 60, 000 X & 40, 000 Y & 62, 000 Z & 33, 000 - ------ - & 1, 35, 000 - -------- - 2, 80, 000 - -------- - - -------- - & 2, 80, 000 - -------- - - -------- - \end{matrix}$

X retired on March 31, 2007 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively.

The other terms on retirement were as follows :

(i) Goodwill of the firm is to be valued at Rs 80,000.

(ii) Fixed Assets are to be depreciated to Rs 57,500.

(iii) Make a provision for doubtful debts at 5% on debtors.

(iv) A liability for claim, included in creditors for Rs 10,000, is settled and paid at Rs 8,000.

Prepare Revaluation Account and Partner's Capital Accounts.

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