1.

X, Y and Z are in partnership sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as at 1st April, 2012, the day Y decided to retire was as follows : Capital and LiabilitiesRsAssetsRsX's Capital30,000Buildings25,000Y's Capital20,000Plant&Machinery15,000Z's Capital20,000Investments10,000General Reserve10,000Debtors10,000Sundry Creditors7,000Stock5,000Bills Payable3,000Cash at Bank25,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯90,000––––––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯90,000–––––––––––––––– The terms of retirement were : (a) Y sells his share of goodwill to X for Rs 8,000 and to Z for Rs 4,000. (b) Stock to be appreciated by 20% and buildings by Rs 5,000. (c) Investments were sold for Rs 22,000. (d) Y is paid off in cash. Prepare Revaluation Account, Capital Accounts of Partners and the Balance Sheet of the new firm.

Answer»

X, Y and Z are in partnership sharing profits in the ratio of 5 : 3 : 2. Their Balance Sheet as at 1st April, 2012, the day Y decided to retire was as follows :

Capital and LiabilitiesRsAssetsRsX's Capital30,000Buildings25,000Y's Capital20,000Plant&Machinery15,000Z's Capital20,000Investments10,000General Reserve10,000Debtors10,000Sundry Creditors7,000Stock5,000Bills Payable3,000Cash at Bank25,000¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯90,000––––––––––––¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯90,000––––––––––––

The terms of retirement were :

(a) Y sells his share of goodwill to X for Rs 8,000 and to Z for Rs 4,000.

(b) Stock to be appreciated by 20% and buildings by Rs 5,000.

(c) Investments were sold for Rs 22,000.

(d) Y is paid off in cash.

Prepare Revaluation Account, Capital Accounts of Partners and the Balance Sheet of the new firm.



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