X, Y and Z were partners in a firm sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as at 31st March, 2020 was as follows:
Balance Sheet of X, Y and Z as at 31st March, 2020
| Liabilities | Amount ₹ | Assets | Amount ₹ |
|---|---|---|---|
| Creditors | 66,500 | Land | 3,00,000 |
| Bills Payable | 10,000 | Furniture | 10,000 |
| Profit & Loss Account | 22,500 | Stock | 20,000 |
| Provision for Legal Claims | 57,500 |
Debtors 20,000 | |
| Capitals: | Less: Provision for Doubtful Debts 500 |
19,500 |
|
| X 1,20,000 | Patents | 45,000 | |
| Y 97,000 | Bank | 50,000 | |
| Z 71,000 | 2,88,000 | ||
| 4,44,500 | 4,44,500 |
On the above date, Z retired. The terms of retirement were:
- Goodwill of the firm was valued at ₹80,000
- Land will be appreciated by 10% and furniture will be depreciated by 5%.
- Provision for legal claims will be made at ₹61,000
- ₹90,000 from Z’s capital account will be transferred to his Loan Account and the balance will be paid to him by cheque.
Prepare Revaluation Account and Partners’ Capital Accounts.
Marks-8, CBSE:2020-21/Compartment/Q-21*