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 ₹|
|Profit & Loss Account||22,500||Stock||20,000|
|Provision for Legal Claims||
|Capitals:||Less: Provision for
Doubtful Debts 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.