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X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires

X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires from the business. The Balance sheet of the firm on the date of retirement was as follows Liabilities Creditors Bills Payable General Reserve Capital Accounts X Y Z Amount (RO) 80,000 Cash at Bank 40,000 Stock 60,000 Debtors LESS Provision 160,000 RO 2000 120,000 Vehicle 80,000 540,000 Assets Machinery It was agreed among the partners Goodwill of the firm to be valued at Provision for Doubtful debts to be increased by Outstanding expenses to be brought into account Vehicle is to be depreciated by Stock is to be depreciated by Machinery is to be appreciated by Amount (RO) 20,000 60,000 80,000 100,000 280,000 540,000 96,000 4,000 7,600 17.5% 12.5% 7.5% Record the necessary Journal Entries and Prepare the necessary accounts and New Balance sheet of X and Z.
Transcribed Image Text:X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires from the business. The Balance sheet of the firm on the date of retirement was as follows Liabilities Creditors Bills Payable General Reserve Capital Accounts X Y Z Amount (RO) 80,000 Cash at Bank 40,000 Stock 60,000 Debtors LESS Provision 160,000 RO 2000 120,000 Vehicle 80,000 540,000 Assets Machinery It was agreed among the partners Goodwill of the firm to be valued at Provision for Doubtful debts to be increased by Outstanding expenses to be brought into account Vehicle is to be depreciated by Stock is to be depreciated by Machinery is to be appreciated by Amount (RO) 20,000 60,000 80,000 100,000 280,000 540,000 96,000 4,000 7,600 17.5% 12.5% 7.5% Record the necessary Journal Entries and Prepare the necessary accounts and New Balance sheet of X and Z.
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