Accounts -2000-Set II

Q9) X, Y and Z were partners in a firm sharing profits in the proportions of 1/2, 1/3 and 1/6 respectively. The Balance Sheet of the firm on 31st March 1998 was as follows:

Liabilities Amount Assets Amount (Rs.)
Sundry Creditors 15,0000 Cash at Bank 5,000
Provident Fund 6,000 Debtors Rs.40,000 38,000
Less Provision Rs. 2,000
Reserve Fund 12,000 Stock 30,000

X 65,000 Investments 15,000
Y 30,500 Patents 10,000
Z 20,000 Plant and Machinery 50,000
1,48,000 1,48,000

Z retired on the above date on the following terms :
(i) Goodwill of the firm was valued at Rs. 30,000, but it was not to remain in the books of the new firm.
(ii) Value of the patents was to be reduced by 20% and that of Plant and Machinery by 10%.
(iii) Provision for doubtful debts was to be raised to 6%.
(iv) Z took over the Investments at a value of Rs. 17,600.
(v) Liability on account of Provident Fund was only Rs. 2,400.
Show the necessary Journal Entries for the treatment of goodwill, prepare revaluation account, Capital accounts of the partners and the Balance Sheet of X and Y after Z’s retirement.

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