X, Y and Z were in partnership sharing profits and losses in the proportions of 3 : 2 : 1. On 1st April, 2019, Y retired from the firm. On that date, their Balance Sheet was:

Trade Creditors30,000Cash in Hand15,000
Bills Payable45,000Cash at Bank75,000
Expenses Owing45,000Debtors1,50,000
General Reserve1,35,000Stock1,20,000
Capital A/c :  Factory Premises    2,25,000
Y1,50,000Loose Tools40,000
 7,05,000 7,05,000

The terms were:
(a) Goodwill of the firm was valued at Rs. 1,35,000 and adjustment in this respect was to be made in the continuing Partners’ Capital Accounts without raising Goodwill Account.
(b) Expenses Owing to be brought down to Rs. 37,500.
(c) Machinery and Loose Tools are to be valued @ 10% less than their book value.
(d) Factory Premises are to be revalued at Rs. 2,43,000.
Show Revaluation Account, Partners’ Capital Accounts and prepare the Balance Sheet of the firm after the retirement of Y.


Leave a Reply