45 :- X, Y and Z were in partnership sharing profits in proportion to their capitals. Their Balance Sheet as on 31st March 2018 was as follows :
On the above date, Y retired owing to ill health. The following adjustments were agreed upon for calculation of amount due to Y
(a) Provision for doubtful debts to be increased to 10% of debtors.
(b) Goodwill of the firm be valued at Rs 36,000 and be adjusted into the capital accounts of X and Z, who will share profits in future in the ratio of 3:1.
(c) Included in the value of Sundry Creditors was Rs 2,500 for an outstanding legal claim, which will not arise.
(d) X and Z also decided that the total capital of the new firm will be Rs 1,20,000 in their profit sharing ratio. Actual cash to be brought in or to be paid off as the case may be.
(e) Y to be paid Rs 9,000 immediately and balance to be transferred to his loan account.
Prepare Revaluation account, Partner’s capital accounts and the balance sheet of the new firm after the Y’s retirement.
Solution :-
WORKING NOTES:-
(a) Calculation of gaining share
New share – old share
X = 3/4 — 3/6 = 6/24
Z = 1/4 – 1/6 = 2/24
Gaining ratio of X and Z is 3:1
(b) Calculation of share of goodwill = 36,000 x 2/6 = 12,000
X and Z will brought in 3:1
X’s share of goodwill = 12,000 x 3/4 = Rs 9,000
Y’s share of goodwill = 12,000 x 1/4 = Rs 3,000
(c) Calculation of new capital of X and Z
X = 1,20,000 x 3/4 = Rs 90,000
Y = 1,20,000 x 1/4 = Rs 30,000