X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. Their Balance Sheet as at 31st March, 2018 stood as follows: Y having given notice to retire from the firm, the following adjustments in the books of the firm were agreed upon: (a) That the Land and Building be appreciated by 10%. (b) That the Provision for Doubtful Debts is no longer necessary since all the debtors are considered good. (c) That the stock be appreciated by 20%. (d) That the adjustment be made in the accounts to rectify a mistake previously committed whereby Y was credited in excess by ₹ 810, while X and Z were debited in excess of ₹ 420 and ₹ 390 respectively. (e) Goodwill of the firm be fixed at ₹ 5,400 and Y’s share of the same be adjusted to that of X and Z who were going to share in the ratio of 2 : 1. (f) It was decide by X and Y to settle Y’s account immediately on his retirement. You are required to show: (i) Revaluation Account (ii) Partner’s Capital Accounts and (iii) Balance Sheet of the firm after Y’s retirement.

X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. The

1.	X, Y and Z are partners sharing profits in the ratio of 4 : 3 : 2. Their Balance Sheet as at 31st March, 2018 stood as follows: Y having given notice to retire from the firm, the following adjustments in the books of the firm were agreed upon: (a) That the Land and Building be appreciated by 10%. (b) That the Provision for Doubtful Debts is no longer necessary since all the debtors are considered good. (c) That the stock be appreciated by 20%. (d) That the adjustment be made in the accounts to rectify a mistake previously committed whereby Y was credited in excess by ₹ 810, while X and Z were debited in excess of ₹ 420 and ₹ 390 respectively. (e) Goodwill of the firm be fixed at ₹ 5,400 and Y’s share of the same be adjusted to that of X and Z who were going to share in the ratio of 2 : 1. (f) It was decide by X and Y to settle Y’s account immediately on his retirement. You are required to show: (i) Revaluation Account (ii) Partner’s Capital Accounts and (iii) Balance Sheet of the firm after Y’s retirement.
Answer» re of goodwill is to be DISTRIBUTED between X and Z in their =2 : 1(Gaining Ratio) STEP by Step Explanation:Adjustment of goodwillX : Y : Z = 4 : 3 : 2( Old ratio)Y RETIRES from the firm.Gaining Ratio = 4 : 2 =2 : 1Goodwill of the firm =RS. 5,400Ys Goodwill = 5,400× = 1,800 rs.X's = 1,800× = 1,200 rs.Z's = 1,800 × = 600 rs.Y's share of goodwill is to be distributed between X and Z in their =2 : 1(Gaining Ratio)

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