The Balance Sheet of X, Y and Z who were sharing profits in the ratio of 5 : 3 : 2 as at 31st March, 2019 is as follows:

Creditors50,000Cash at Bank40,000
Employees’ Provident Fund10,000Sundry Debtors1,00,000
Profit and Loss A/c85,000Stock80,000
Capital A/c :Fixed Assets60,000
X – 40,000 
Y 62,000 
Z 33,0001,35,000 
 2,80,000 2,80,000

X retired on 1st April, 2019 and Y and Z decided to share profits in future in the ratio of 3 : 2 respectively.
The other terms on retirement were:
(a) Goodwill of the firm is to be valued at Rs. 80,000.
(b) Fixed Assets are to be depreciated to Rs. 57,500.
(c) Make a Provision for Doubtful Debts at 5% on Debtors.
(d) A liability for claim, included in Creditors for Rs. 10,000, is settled at Rs. 8,000.
The amount to be paid to X by Y and Z in such a way that their Capitals are proportionate to their profit-sharing ratio and leave a balance of Rs. 15,000 in the Bank Account.
Prepare Profit and Loss Adjustment Account and Partners’ Capital Accounts.


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