|Creditors||50,000||Cash at Bank||40,000|
|Employees’ Provident Fund||10,000||Sundry Debtors||1,00,000|
|Profit and Loss A/c||85,000||Stock||80,000|
|Capital A/c :||Fixed Assets||60,000|
|X – 40,000|
|Y – 62,000|
|Z – 33,000||1,35,000|
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.