Q. The Balance Sheet at X, Y and Z who were sharing profits in the ratio of 5:3:2 as at 31st March, 2002: 
Liablities Amount Assets  Amount
Creditors 50000 Cash at Bank 40000
Employees' Provident Fund 10000 Sundry Debtors 100000
Profit and Loss A/c 85000 Stock 80000
X's Capital  40000 Fixed Assets 60000
Y's Capital 62000    
Z's Capital  33000    
  280000   280000
X retired on 31st March, 2007 and Y and Z decided to share profits in future in the ratio of 2:3 respectively. 
The other terms on retirement were as follows: 
  1. Goodwill of the firm is to be valued at Rs. 80,000
  2. Fixed Assets are to be depreciated to Rs. 57,500.
  3. Make a provision for Doubtful Debts at 5% on Debtors.
  4. 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. 

  • -5
Please find this answer

  • 0
What are you looking for?